December 2, 2025 • 31 mins
The conversation starts with sweet potatoes and grandma-level stuffing, then pivots to the question stirring up homebuyers everywhere: would a 50-year mortgage help or hurt? We share the real math behind lower monthly payments, how amortization changes over ultra-long terms, and why equity can lag for years unless you get proactive. From belt-loop victories to kitchen-table budgets, we pull the debate out of theory and into real life.
We unpack who actually benefits from a longer term, how lenders will likely price risk, and why the lifetime cost may dwarf the short-term relief. You’ll hear clear strategies to make a long loan work in your favor: automate extra principal, aim for one extra payment a year, set refinance trigger points, and treat appreciation as a bonus, not a guarantee. We also tackle the costs no one can ignore—property taxes and insurance—and how they can erase your perceived savings even if your rate looks decent on paper.
There’s fresh context on 2025 credit changes, including how medical debt is treated and why nuanced underwriting could help qualified buyers who’ve had a rough patch. We balance the builder’s perspective with the buyer’s anxiety, explore market ripple effects if 50-year loans take hold, and draw a bright line between starter-home strategy and forever-home commitments. If a 50-year term is the only way to get the keys, we outline the plan you need to avoid paying for a lifetime: disciplined overpayments, honest timelines, and a clear exit or refinance strategy.
Ready to pressure-test your plan? Listen now, subscribe for more straight-talk housing insights, and drop your take: is the 50-year mortgage a smart bridge or an expensive habit we’ll regret?
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
SPEAKER_01 (00:01):
Welcome to the Carolina Contractor Show with
your host, General ContractorDonnie Blanchard.
Donnie Blanchard, we need to aska very important question this
time of year.
Do you have a favorite side dishat Thanksgiving?
SPEAKER_00 (00:17):
I don't have a favorite, but I'd have a
favorite for this year, and it'sgoing to be the favorite.
I've been doing a not a low carbnecessarily, but just trying to
eat a lot cleaner.
And of course, sweet potatoesseem to be the go-to superfood
that actually still taste good.
So I've been taking a potatopeeler and trimming my sweet
potatoes up, cutting them intolittle yam shapes, so circles,
and uh toss them in olive oil.
(00:38):
You season them with the rightstuff, put them in the oven,
flip them every, I say, 20minutes, two cycles of 20
minutes, and when when I saydelicious, they are amazing.
A lot of other things involved,fresh garlic, some things like
that.
But um I saw a twist on thatwhere they sprinkle feta cheese,
cranberries, or maybe it's driedraisins.
(00:58):
I think it's cranberries, but uhthat with a um a walnut or an
almond on top.
Oh my word.
I mean, that that's that's gonnabe the go-to, and uh, I'm
definitely gonna deliver that onThanksgiving.
SPEAKER_01 (01:09):
You had me up to feta.
I'm not a big feta cheese fan.
I guess um there's some saladslike a um pasta salad, feta
works, but I'd have to try it.
I I like sweet potatoes.
You told me about that lastweek, I think, that that was
your new jam that you were umbaking sweet potato slices and
stuff.
SPEAKER_00 (01:26):
Yeah.
It's even good cold, dude.
I uh I'll make an extra fewchicken breasts, throw those in
the cooler for the day.
You don't have to stop forlunch, don't have to waste any
money that day, and and you'reeating very, very clean.
I think I'm down one belt loop.
Oh, nice.
SPEAKER_01 (01:39):
That's how men measure that.
We don't do pounds, we do beltloops.
Nah.
Um love some deviled eggs, anduh you can have those any time
of year, but something abouthaving deviled eggs next to
turkey and mashed potatoes makesthem taste even better.
So if you don't have them atyour table on Thanksgiving, I'm
questioning your patriotism towhen we uh celebrated conquering
(02:00):
this great uh continent.
SPEAKER_00 (02:01):
You know what I wish I had the most on Thanksgiving?
What?
My grandmother.
I mean, they they just don't doit like they used to, man.
And I I have you can read, youcan go to the old cookbooks and
give it your best callus try,but for some reason we just
can't do it like they did.
SPEAKER_01 (02:17):
So my mom, I remember when I was a kid, like
10, she started the nightbefore, and I don't mean like at
10 p.m., like at five, sixo'clock at night.
Hey, mom, can I help with uhgetting stuff ready for
tomorrow?
She would give me some wonderbread, a whole loaf, and I had
to take out every piece andbreak it into little teeny
pieces and drop it back in thebag, and I was making the
(02:38):
stuffing.
I and everything she did wasfrom scratch, just about.
She damn near raised the turkeyherself, defeathered it the
night before.
I mean, everything else she washandmade.
She would go to bed at one ortwo in the morning and be back
up at six, putting that turkeyin the oven and working all the
other sides.
(02:59):
And so I agree a hundredpercent.
Back then, Thanksgiving was a areally big deal and it was a
real big family thing.
Technology has probably affectedus that way.
But even today, I'm assuming thesame in your house, that kitchen
becomes the HQ for the day.
SPEAKER_00 (03:17):
Oh, no doubt.
And um, I love that.
They don't make them like thatanymore.
And I think the Bible has somegood verses that call that a
virtuous woman.
So uh hats off to all thegrandmothers who who still have
uh family members that rememberthem and are talking about them
and and and learn something fromthem.
SPEAKER_01 (03:34):
And this is a Carolina contractor show, and
one thing we talk about on thisshow is houses, and we've done
lots of episodes where we'vetalked about the focal point of
a house ends up being thekitchen because it's where the
food's made, where you usuallyhave your meals, and it's just
that gathering point.
And if you're like looking atupdating a room in your house,
it's why the kitchen is always apopular thing to update because
(03:56):
we just gravitate towards there,and then if you got your mom or
your grandma in there cooking,you can't help but come in the
front door, hang up your coat,and unless there's football on,
maybe, go to the kitchen andhang out there with a uh with a
drink or help make food, andit's you stay there all day
long.
It's a I love that memory.
(04:16):
Absolutely.
So today we're not gonna talkabout your kitchen, we're gonna
talk about houses, and that'sone of the things we we always
talk about, but we're gonna talkabout buying houses and and and
mortgages.
Uh, but I do want to direct youto the website, the
Carolinacontractor.com.
We've got all our past shows upthere, uh, hundreds of them,
(04:37):
literally.
I've mentioned before that thereare the average podcast in the
United States has threeepisodes.
We have like 300, and they'reall listed by title, date, so
you can go down the list, find atopic you're interested, and
listen to it at your own paceand own time.
Uh links to all of our socialmedia sites, the Facebook, the
Instagram, uh, the YouTube page.
We put these shows up on YouTubenow, so you can follow us there.
(05:00):
Also, if you have a questionabout your house or a
suggestion, or maybe a recipefor Thanksgiving, I guess that
would qualify.
You would click on the Ask theContractor button that goes to
Mr.
Donnie Blanchard here on theshow.
He's a general contractor.
Um, but the thing we want totackle today was an announcement
made.
Was it even two weeks ago thisannouncement was made?
SPEAKER_00 (05:21):
I don't know that it's been an official
announcement, but it's it'sbeing thrown around right now.
But yeah, something to the tuneof two weeks.
All right.
SPEAKER_01 (05:29):
The 50-year mortgage.
That's what we're going to talkabout today on the Carolina
contractor show.
Um I gotta say, right off thebat, I went kind of in Dave
Ramsey mode.
You know that look he gives whenpeople call up and say, Yeah,
I'm$478 million in debt, andhe's like, Why are you calling
me uh a 50-year mortgage?
(05:52):
Um, and we just me and Donnietalked before the show.
We're not gonna do good cop, badcop, which uh I have to mention,
Donnie doesn't think he's seentraining day with Denzel
Washington, right?
SPEAKER_00 (06:05):
Yeah, shame on me.
I'm I'm I guess I'm not a bigmovie guy.
I got my favorites, but um, Idon't take the time, man.
SPEAKER_01 (06:13):
So I made a reference to Denzel Washington
when we're talking about theshow, like he'd be good cop, I'd
be bad cop, talking about50-year mortgage.
And he kind of got the joke thatI sent Denzel for those men out
there who have seen the show, Imean the the movie near the end,
where he's talking about KingKong and Pelican Bay.
Um it kind of went over Donnie'shead.
(06:33):
Not to digress.
We do want to talk pros and consof the 50-year mortgage.
It's kind of fluid.
Uh there's not a whole lot ofbanks offering it yet, but this
was announced as a way to allevethe housing crisis.
And as you, Donnie, being in thetrenches, so to speak, not only
as someone who builds, butsomeone who's looking to help
relatives find housing.
This is a big issue right now,getting a finding a house and
(06:56):
being able to afford themortgage.
SPEAKER_00 (06:57):
Oh, yeah.
It's on the forefront, frontburner, however you want to word
that, uh, of my personal life.
And I've got two kids that I'mbuilding houses for at the same
time.
And um, we didn't just arrive atthat conclusion we were going to
build them a house.
We explored all thealternatives, and uh, it's
really tough for a young personthese days to to qualify for a
mortgage, especially without asecond person on that mortgage
(07:20):
and especially without having aconnection to some sort of land.
I mean, what kid can afford togo out there and buy a$30,000,
$40,000 lot, and you wantanything in a decent area, you
know, you're looking at aminimum of 20.
And so uh I just think that uhwhere we are as a society, we're
in a position where the olderpeople are gonna have to help
(07:41):
the younger people, and I justdon't see any way around it
unless this young person comesout of college swinging and
lands a six-figure job.
Okay.
SPEAKER_01 (07:49):
Here's my one thing about the this generational um
younger generation bitching andmoaning about boomers, and
that's what it is.
I've got now boomer fatigue, notfrom boomers, but from the the
millennials.
I have millennial fatiguebecause they're going, the
boomers took advantage like theyhad some grand plan.
The younger generations will getthe advantages of the boomers
(08:13):
when the boomers complete thecircle of life and pass away.
Those houses aren't gonna gopoof and disappear.
A lot of them will inherit somuch wealth and so much property
from um parents andgrandparents, the millennials
and exes will actually becomethe wealthiest generation ever.
(08:33):
But short term, because that'sgonna take 10, 15 years for that
to have a big effect, shortterm, it's really hard to find a
house, and you said it best.
Not many kids are gonna come outof school, land a six-figure job
to be able to get a house rightoff the bat.
And a six-figure job ain'treally gonna cut it right now
because if you want to live in aparticular area and you're not
(08:54):
willing to commute, you're justnot gonna be able to afford it.
I commuted to Raleigh for 15plus years, so I have a 2200
square foot house and it costhalf of what it does just a
couple miles outside of Raleigh.
I was willing to do that trade.
Not everybody can do that, andit's a lot harder now than it
was you know, 20 years ago.
(09:15):
Soapbox aside, 50-year mortgage.
When you heard about this,Donnie, and you have relatives
looking to buy, did that makeyou perk up a little bit and go,
Well, hey, this could work.
SPEAKER_00 (09:27):
I mean, it did.
I I I really just thought aboutit uh from a positive light
before I knew the details,because you know, and at first
before you read into it, 50-yearmortgage, obviously lower
payments, you're makinghomeownership uh a reality.
I mean, there's a lot of peoplewho can afford uh half the
payment or not half, whatever,60% of the payment if you're
(09:50):
just doing the quick math on 50year versus 30 year, but it
doesn't work exactly that way.
No.
SPEAKER_01 (09:56):
It's it it's it's not that simple, but uh I think
maybe the best way to discussthis topic, Donnie, is let's go
back to the training day thing.
You're gonna be uh Ethan Hawke'scharacter, Jake.
You're gonna be the uh trying tohave the heart of gold.
I'm gonna be Denzel.
Okay.
Um so we could maybe hit somepros and cons.
Um name me quickly, based onsome of your research, a couple
(10:19):
pros to a 50-year mortgage.
SPEAKER_00 (10:21):
Well, I think that um the very first thing is that
that so many more people willactually qualify.
And there's no secret uh thatthat owning a home is better
than renting all day long.
30, 50, 100-year mortgage, itdoesn't matter.
You're you have uh homeownershipin your corner, and so you're
gonna build credit from thatstandpoint.
You have an investment that'sgonna constantly go up in value.
(10:44):
I know my house has gained inwhat 12, 13 years, it's probably
gone up anywhere from two tothree hundred thousand dollars
in value, and I don't have anyother investments that have gone
up that aggressively.
And um, you know, you have theoption to uh you have the option
to to uh improve your yourinvestment.
So you can remodel your home,you can change out things to
make your home worth more alongthe way, but I think that just
(11:07):
home ownership versus thealternative of renting is what
the biggest deal is in the wholeequation.
SPEAKER_01 (11:13):
I agree a hundred percent.
The the one thing I will tellpeople when you get your first
home is you don't have a phoneto pick up and call the super
when something's leaking or yougot to fix a problem.
You'll learn a lot ofmaintenance stuff too, which I'm
a big proponent of.
But yes, owning is much betterthan renting.
Anybody that tells you rentingis better with all things being
equal uh is a liar.
(11:34):
My biggest number one problem,then I'll come at you with a
con, is uh it's fifty years.
Um that is a long time, and thatmeans you're gonna be paying,
even if the interest rates werethe same, you're gonna be paying
200% more than what the loan is.
If the interest rate is higher,which it probably will be
(11:55):
because of the length of theloan, you're talking about
buying a house and over the bythe time you'd pay it off if you
kept it 300% higher than whatthe purchase price was or or the
the loan was.
That to me is just horriblefinance.
SPEAKER_00 (12:11):
So I don't know how this applies to our area, but
the median cost of the averagehome in the United States is
four hundred and fifty thousanddollars, and which is insane to
me.
Um, but if we're using that fourhundred and fifty thousand
dollar mark just as a gauge forthis, some of the scenarios said
that you know it may drop yourpayment as much as three hundred
dollars.
So if you've got that mortgageand it's twenty seven hundred
(12:32):
dollars a month, it's gonna dropit to twenty three hundred
dollars a month, which I don'treally see as a significant
savings.
And the the real end game is howmuch you pay if you were to
outline, if you were to last thewhole 30 or the whole 50-year
mortgage, I want to say at 30years you end up paying
somewhere around$900,000, but atthe$50, you end up going uh well
over the$1 million mark.
(12:53):
I want to say the figure wasabout$1.3 million.
So you pay exponentially more tostretch that mortgage out
another 20 years.
That part doesn't make sense tome.
Uh that being said, the averagehomeowner stays in their house
for 12 years, and those areconcrete stats.
So if you just need a foot inthe door for home ownership, you
know, and the 50-year mortgageis the only way you can do it,
(13:15):
then I I really I'm not opposedto that.
And and that way you get inthere and you sell it at the
12-year mark, make whatevermoney you're gonna make from the
appreciation of your house, andyou move on to the next one.
SPEAKER_01 (13:26):
Okay.
Um, I'm gonna go all Denzel alittle bit.
Uh two things.
For the first 20 years of a50-year mortgage, you're paying
interest only, so you're gonnaneed that house to increase in
value to get any equity out ofit.
You some of the models show theequity wouldn't start building
until year 30.
Uh that's crazy to think about,but if it isn't a good location,
(13:49):
you keep it up, it will give youequity just because the value of
it after a few years, and inyour case, you're talking 12
years, you should be able topull out more than you put in,
but you're right back to whereyou started.
Hey, we bought this house, weowe$450 on it, and now it's
worth$550.
So we've we're making it simple.
(14:09):
We've netted$100K.
Well, where are you gonna movenow?
Is that problem been alleviated?
Do we have more housing, or areyou gonna just find yourself,
well, now I got to buy this$800,000 home.
I can put a hundred down.
I'm gonna have what do I do?
Get another 50-year mortgage?
I'm 50 years old now.
SPEAKER_00 (14:26):
Yeah.
I was throwing this around withmy sweetheart, and she came up
with a pretty good idea.
She she adds an extra so manyhundreds a month to her mortgage
payment, and and that goesdirectly to the principal, and
she mentioned to me, uh, youknow, she said, why wouldn't
that be a good idea?
So I don't have any kind ofcalculator that I filled those
numbers in online, but if youare in a position where the
50-year dropped your mortgagepayment, say, you know, we don't
(14:48):
know what the terms are going tobe if this comes about, but I
can't see that they're gonna notgonna make them favorable.
But if if you put an extra$300that you saved down towards the
principal every month, and it itbasically makes a lot of that um
high interest go away.
And that reverse amortizationschedule that you mentioned, uh,
you know, when you when you takea home loan out, you're paying
(15:10):
80% interest, 20% principal inthe beginning, and as you get
towards the end, that flips to80-20 principal versus interest
the other way.
So uh just that amortizationschedule that they come out
with, if they do implement the50-year mortgage, is going to be
a huge part of this thing ifmaking making it make sense or
not, whether it's realistic.
SPEAKER_01 (15:30):
I want to back up a little bit, Donnie.
You said something about, youknow, where you it could lower
their monthly payment of 300bucks.
That's 75 bucks a week.
It's actually probably a littleless, probably like 70 bucks a
week with 52 weeks in a year.
If you can't cut 70 bucks a weekout of your budget somewhere to
make up the difference betweenhaving to get a 50-year loan and
(15:51):
get a 30, that's a bigger issuebecause uh there's no reason.
You can do it, you can findways.
You were talking about um takingyour own lunch to work and
things like that.
Well the prices of going througha drive-thru, there's 10 bucks
and Starbucks, and you know, youdon't need eight streaming
services.
You uh and I'm not trying to smake it too simplified, like
(16:12):
that's the problem.
You can all do it if you cutyour spending, but that 75 bucks
a week is what you're saying isthe difference between having a
30 and a 50-year mortgage.
I don't buy that.
Um and and that's what gets youin trouble.
The other thing is people um paya little bit extra a month, and
sometimes the goal is to pay theequivalent of one month's extra
(16:34):
mortgage on principal only everyyear.
So great idea.
I'm afraid a lot of people willget a 50-year mortgage and say,
look, hun, this is all we do.
We throw an extra 250 or 300bucks a month at principal only,
we'll be paying it off in lessthan 30 years.
But guess what?
In real life, 99.9% of peoplewon't end up doing that.
(16:55):
They'll still end up spendingthat extra cash because they
don't want to put it on thehouse.
So they're gonna end up with a50-year mortgage.
Um, you had a stat, the averageuh new home buyer age, what was
that?
SPEAKER_00 (17:09):
Um it's 40 years old for the average new home buyer.
And just to tell you that we'vebeen barking up the right tree
when we complain about the waythings are going.
Just five years ago, the averageage was 33 years old.
So in in five years' time, it'sgone up seven years, meaning
we're right.
We're right.
It it is ridiculously hard tobuy a house now compared to what
(17:29):
it was just half a decade ago.
SPEAKER_01 (17:31):
So buy your house at 40 with a 50-year mortgage.
Tell me what happens if you'regonna stay there the whole time.
How old will you be when thebank says, here you go, you own
the house?
SPEAKER_00 (17:41):
Still eating ramen noodles at 88, man.
That ain't cool.
SPEAKER_01 (17:44):
Yeah, so if you're buying a house, a 50-year
mortgage and you're 40, I hopeyour plan is you're trying to
build up that equity as quick asyou can to maybe move out or
maybe downsize by using that,say you you netted 100,000 and
and and something like that.
But that's gonna affect how longyou have to work.
It's gonna affect how much youcan put in your retirement, it's
(18:05):
gonna affect your retirement.
Um, there's so many things.
There I think you found outthere is a good suggestion with
this 50-year mortgage where theyto get credit, they'll no longer
hold um medical debt as a ratingagainst your credit.
SPEAKER_00 (18:18):
That's that's probably the bigger news of all
the things because we don't knowwhat the terms are gonna look
like on this 50-year mortgage ifthey implement it.
So technically we're doing ahypothetical show right now, but
the one thing that is in placeis that uh they no longer go by
your your credit score toqualify you for a home.
So that is brand new in 2025.
And the way that it was wordedto me is that they they take
(18:42):
into consideration the person.
So if you've been out of workfrom an injury, you had a
surgery, you're going through adivorce, and your credit took a
hit, they don't just go by astraight credit score from the
three the three big ones.
But the other thing that wasmost important, pri well, second
most important was that theydon't consider your medical
debt.
So they encouraged everybody.
(19:02):
The the stuff I read upencouraged everybody to pull a
tri-merged credit report.
So make sure it hits all threecredit bureaus that the banks
check.
And if you have any kind ofmedical debt still showing on
there, you can dispute that andit should disappear pretty
quick.
SPEAKER_01 (19:15):
Yeah, and I and I'm perfectly fine with that because
medical debts is a weird thing,how it hangs around, because
sometimes you can make itdisappear quickly with a couple
phone calls, and it that's awhole nother show, which we
wouldn't even cover because it'snot our our forte.
But uh, yeah, get rid of that.
That shouldn't be it based onyour job.
(19:36):
I was thinking, um, you've got ason who's how old's Caleb?
22.
22.
Mine's getting ready to turn 20,and I was sitting there
thinking, what if they right nowgot a house and got a mortgage
and they got a 50-year mortgage,and you'd be saying, You'll be
72 when it's paid off.
And I'd be saying to my son,you'd be 70 years old if you
stayed here.
(19:57):
But we're also making anassumption that the first house
is going to be the forever home,which is kind of a um, I don't
know, it's like hallmarky.
It's not really true.
The chances of you buying yourfirst home and it being your
forever home is not likely it.
So I guess the advantage of the50 years, if you get it and you
save that money that you're notpaying on that monthly payment
(20:18):
when it's time to sell, and ifyou've built some equity in it,
we keep going back to$100,000plus the$300 a month you're not
spending, you could thenactually get that forever home
where you want it because you'rejust using a longer, it's kind
of like the using revolvingcredit card, you're moving one
debt over to the next for zerointerest.
Right.
So you can try to finagle thesystem and and get some cash
(20:41):
flow going.
So I guess if you kept it, yousaid they move average within 12
years.
Yeah.
Okay, I could see doing that.
And if the if my my son or youror your son, though I don't know
why he'd be asking me, um, saidthis is my plan, maybe that's
it.
You should go into it with aplan written out.
This is our plan why we'regetting a 50-year mortgage.
We don't plan on paying for thiswhen we're 70 or 80 or flirting
(21:04):
with 90 years old.
SPEAKER_00 (21:06):
Yeah, I mean, I just think back to what we said
initially that it it's just afoot in the door to home
ownership.
And I I do believe that it won'tbe the end game.
And as long as you can alwaysrefinance, that's kind of what
everybody said, including us,when interest rates shot through
the roof, we said, hey, it'snever a bad time to buy because
you can always refinance whentimes are better.
But I guess the hope is thatthings, the interest rates will
(21:27):
eventually drop.
And uh I liked what you said asecond ago, and I think that's
my big delineation, whether ornot I agree with this.
And on one side of the fence, ifyou're building a uh starter
house or a transition house andyour job relocated you, but you
don't want to stay thereforever, who cares?
You know, just get your foot inthe door.
Uh, I think the 50-year allowsyou to uh buy more house.
(21:49):
So if you have the intentions ofgrowing a family and you need
more house than you can afford,maybe it opens the door for
that, and then you're gonna sellit in five years, seven years
whenever you move.
It's not the end of the worldthere, but if you're settling
down and it's your foreverhouse, hopefully you're in a
pretty decent financialsituation if you're thinking
forever.
But uh that being said, I wouldI wouldn't consider the 50 year
(22:09):
for a forever house in any casescenario.
SPEAKER_01 (22:12):
But you know, you like you also said, Donnie,
point out you can alwaysrefinance.
Uh my wife and I, our house wasa 30 year, and a year uh with 21
years left on the mortgage, werefied uh down to a 15.
So we cut six years out of uhthe the mortgage and the
payments only went up like ahundred and some bucks.
(22:33):
So again, that was a better timeto re-fi, and you know, we're
under the the four percent.
Oh now people are gonna hate me,call me boomer.
Um so but if you got a 50-yearmortgage, hey, maybe five years
later, maybe six years later,you go to the bank and say,
Yeah, we want to refi this downto a 30 or down to even a 25.
You can actually re-fi to almostany amount of years you want to.
(22:57):
Um use it as that, like yousaid, this gets you in the
literal and proverbial door,front door of the house.
You have it going, things getbetter, you move up in life and
income streams increase.
Hey, we love this house.
We actually are gonna plan tostay here longer.
Let's knock down the years ofthe mortgage because for every
(23:18):
year you knock down, it's gonnabe uh tens of thousands of
dollars just in interest save.
So imagine if you had 50 and atyear 40 you knocked it down to a
30, or incredibly, say a 20 or a15, you would be looked at as a
genius by the time you pay offthat house, and you paid off by
the time you're 50.
SPEAKER_00 (23:35):
Yeah, exactly.
Um, it's funny you say that inall my research the last couple
days, and I've had this on everytime I had a free moment just to
learn as much as I could aboutit.
And uh, we still don't know,like I keep saying over and
over, we don't know what theterms are gonna be, but more
than likely when you stretch outa mortgage for an extra 20
years, you're a much higherrisk, and so there's no way for
any financial institution totake on a higher risk without a
(23:57):
higher interest rate.
And they went on to say that a50 is gonna be more interest
than 30, but they also say whenyou cut it into a f down to a
15, then the interest rate goesdown with the years as well.
So it got my wheel spinning.
I'm at year 14 out of a 30-yearmortgage right now, and I called
my lady at the bank and said,Hey, should I should I consider
(24:18):
refinancing and changing thisthing to a 15?
I'm already almost at at thehalfway point, and she shut it
down real quick, man.
She said, You're at 4%.
So since you said what you did,I guess I'll be hated too for
that.
But I locked in at 4% and umactually combined two house
mortgages for one.
So I've got a really sweet dealgoing on right now.
And she said that the lowest shecould get with a 15-year
(24:40):
mortgage is not is just belowfive right now.
So I'm still sitting pretty.
SPEAKER_01 (24:44):
Yeah, there's no point.
You can always pay extrapayments on principal, and
that's the same difference as uhchanging the length of your
mortgage or shortening it.
But then again, most peoplearen't going to be that
dedicated to go, honey, we can'tbuy this.
You Eric, you can't have a LesPaul.
This money needs to go to paydown principal on the house.
Um a friend of ours in ourchurch, she took care of the
(25:07):
mortgage payments.
And without telling her husband,she was paying um half a
mortgage payment extra everymonth and didn't tell him until
she came home one day and said,Hey, guess what?
We own our house outright now.
And he was like, How is thateven possible?
Well, for like seven years, shewas doing a 50% uh payment every
(25:29):
month just on principle.
Bang, bang, bang, bang, knockedit out.
That's that takes a lot of umdiscipline uh discipline exactly
to do that.
Um the other thing is even ifthis comes out soon, not a lot
of banks are gonna offer it, letalone what the interest rate is
gonna be.
It's not like you're gonna go toevery bank because a lot of them
are gonna say, Man, we rememberthe last time we offered crazy
(25:51):
rates and we're giving anybodymoney.
They're probably gonna be a lotstricter on who they give money
to, as you said, who they'regonna lend to, and they're gonna
do it at a at a higher rate.
SPEAKER_00 (26:01):
Yeah, absolutely.
You know what we're gonna bitchabout when we get our house paid
off?
What?
The taxes and insurance.
SPEAKER_01 (26:06):
I agree.
Yeah.
Mine went up because Wilson isbuilding a baseball stadium.
Somebody's got to pay for allthe stuff they're doing.
Uh, I got that letter fromRocket Mortgage back in April.
It says, hey, by the way, wantto let you know your insurance
is going up and your propertytax is going up, your
evaluations.
So we just want to let you knowyou're gonna pay$390 extra a
(26:29):
month, and we didn't give youanything in return.
At least you love baseball.
$390 a month for not withnothing in return.
They just said, hey, we're gonnado this now.
So we did get a little discount,we redid our insurance, but the
property tax, you know, youknow, you're you're screwed out
of that.
Hey, last question, Donnie.
(26:50):
You build houses.
Uh do you think if the 50-yearmortgages come out and it makes
it easier for people to gethouses, will that cause house
prices to drop, or would theysay, hey, more possible people
to buy?
Would it affect building?
You know, would you get see ademand of building houses go up?
SPEAKER_00 (27:10):
Yeah, I I'm gonna say it's gonna be the almost the
same, if not just similar,artificial inflation that we saw
after COVID when everybody madea life change that figured out
they could work from home, allof a sudden, you know, a
different style house was inhigh demand, and you don't have
to be in the middle of the city,you don't have to have the
convenience of um of being closeto an interstate.
So I definitely think that ifthis takes a foothold, it it
(27:34):
will create uh a major demandfor for housing, especially in
an area like where we are, themiddle third of the state,
everybody's moving here, so manybusinesses coming this way, and
it's definitely gonna fliparound what we just got under
control.
So it's a great thing that thehouse prices will go up, but in
the big picture, uh I think theeasy math just tells you what
(27:56):
you need to know there.
You're gonna get a little bit ofa break on the mortgage payment,
but you're gonna pay an extrahundred thousand dollars more
than what the house is reallyworth.
And that I don't know, but youwould you would hope that the uh
experts would think all thatthrough and they have a plan in
place, but it ain't always likethat.
SPEAKER_01 (28:13):
All right, I can give you 30 seconds for this
answer, and you can't answer itin 30, but see if you can.
You have a magic wand, Donnie.
You can do one or two things tohelp the housing shortage go.
SPEAKER_00 (28:27):
Hmm.
I would eliminate closing cost.
Builders like me can't uh offerprograms like that similar to
the big builders.
So that that's a chunk right upfront.
That would help people uh on thefront end, and I would offer
50-year mortgages with a lowinterest rate and figure out how
to pay for it with tariffs.
SPEAKER_01 (28:47):
Hmm, that's pretty wow, that's deep and that's
good.
I like the idea someone floatedof the transferable interest
rate.
Say you got a 5% rate on yourhouse and you sell that house
and it's a 50-year mortgage, thenew buyer has the opportunity to
buy it, they can put thedifferent the equity amount into
the loan.
Obviously, the seller is gonnamake some money, but then the
(29:09):
interest rate from that bank,they'll say, we'll keep the
interest rate the same.
I know it's hard because of thecredit issues or reports from
seller versus buyer, but therewas an idea of, hey, just keep
the interest rate locked, let ittransfer onto that house, and
then people won't have to worryabout, well, I'm not gonna buy
now because it's too high, orI'm not gonna sell because I
(29:29):
won't be able to buy anotherhouse in its place.
So uh again, it'd have to be amagic wand.
SPEAKER_00 (29:35):
Yeah, for sure.
But that's a great point,though.
SPEAKER_01 (29:37):
People just have to agree with us, and you know,
this country would be a lotbetter if they just listen to me
and you, but the board ofbuilding affordably.
That's going to be the uh theafter the show show.
We'll we'll have a second showwe'll be talking about.
Listen to us, and things will gofine.
All right.
Well, I appreciate everybodychecking out the show today.
Again, hit the website, theCarolinacontractor.com.
(29:58):
On the surface, I don't like.
the 50 year mortgage at all.
But uh you can give your opinionby hitting the website there and
clicking on that assetcontractor button.
And um maybe you got an idea howto make housing more affordable.
I know getting the governmentout of it, maybe reducing the
red tape would help too.
But yeah, let's instead ofgiving people a couple thousand
bucks in a check that they'rejust going to get a iPhone with,
(30:21):
let's apply it to housing or tothe dead or well, we're gonna
get into another showautomatically.
I'm sorry.
I'm better step away from that.
I'm just gonna say this.
Thank you for tuning in.
I think the 50 year mortgage onthe surface is a bad idea.
Donnie I'm I'm still up in theair.
Yeah.
Still up in the air.
All right well maybe we'll havean answer next week and
(30:42):
everybody can check that out anduh we'll we'll we'll talk or
revisit this subject again onthe Carolina Contractor Show.
Want to thank everybody fortuning in and uh hope to see
you, hear you and look at younext week.
SPEAKER_00 (30:54):
Thanks everybody.
Love you guys
Welcome to the Carolina Contractor Show with
your host, General ContractorDonnie Blanchard.
Donnie Blanchard, we need to aska very important question this
time of year.
Do you have a favorite side dishat Thanksgiving?
SPEAKER_00 (00:17):
I don't have a favorite, but I'd have a
favorite for this year, and it'sgoing to be the favorite.
I've been doing a not a low carbnecessarily, but just trying to
eat a lot cleaner.
And of course, sweet potatoesseem to be the go-to superfood
that actually still taste good.
So I've been taking a potatopeeler and trimming my sweet
potatoes up, cutting them intolittle yam shapes, so circles,
and uh toss them in olive oil.
(00:38):
You season them with the rightstuff, put them in the oven,
flip them every, I say, 20minutes, two cycles of 20
minutes, and when when I saydelicious, they are amazing.
A lot of other things involved,fresh garlic, some things like
that.
But um I saw a twist on thatwhere they sprinkle feta cheese,
cranberries, or maybe it's driedraisins.
(00:58):
I think it's cranberries, but uhthat with a um a walnut or an
almond on top.
Oh my word.
I mean, that that's that's gonnabe the go-to, and uh, I'm
definitely gonna deliver that onThanksgiving.
SPEAKER_01 (01:09):
You had me up to feta.
I'm not a big feta cheese fan.
I guess um there's some saladslike a um pasta salad, feta
works, but I'd have to try it.
I I like sweet potatoes.
You told me about that lastweek, I think, that that was
your new jam that you were umbaking sweet potato slices and
stuff.
SPEAKER_00 (01:26):
Yeah.
It's even good cold, dude.
I uh I'll make an extra fewchicken breasts, throw those in
the cooler for the day.
You don't have to stop forlunch, don't have to waste any
money that day, and and you'reeating very, very clean.
I think I'm down one belt loop.
Oh, nice.
SPEAKER_01 (01:39):
That's how men measure that.
We don't do pounds, we do beltloops.
Nah.
Um love some deviled eggs, anduh you can have those any time
of year, but something abouthaving deviled eggs next to
turkey and mashed potatoes makesthem taste even better.
So if you don't have them atyour table on Thanksgiving, I'm
questioning your patriotism towhen we uh celebrated conquering
(02:00):
this great uh continent.
SPEAKER_00 (02:01):
You know what I wish I had the most on Thanksgiving?
What?
My grandmother.
I mean, they they just don't doit like they used to, man.
And I I have you can read, youcan go to the old cookbooks and
give it your best callus try,but for some reason we just
can't do it like they did.
SPEAKER_01 (02:17):
So my mom, I remember when I was a kid, like
10, she started the nightbefore, and I don't mean like at
10 p.m., like at five, sixo'clock at night.
Hey, mom, can I help with uhgetting stuff ready for
tomorrow?
She would give me some wonderbread, a whole loaf, and I had
to take out every piece andbreak it into little teeny
pieces and drop it back in thebag, and I was making the
(02:38):
stuffing.
I and everything she did wasfrom scratch, just about.
She damn near raised the turkeyherself, defeathered it the
night before.
I mean, everything else she washandmade.
She would go to bed at one ortwo in the morning and be back
up at six, putting that turkeyin the oven and working all the
other sides.
(02:59):
And so I agree a hundredpercent.
Back then, Thanksgiving was a areally big deal and it was a
real big family thing.
Technology has probably affectedus that way.
But even today, I'm assuming thesame in your house, that kitchen
becomes the HQ for the day.
SPEAKER_00 (03:17):
Oh, no doubt.
And um, I love that.
They don't make them like thatanymore.
And I think the Bible has somegood verses that call that a
virtuous woman.
So uh hats off to all thegrandmothers who who still have
uh family members that rememberthem and are talking about them
and and and learn something fromthem.
SPEAKER_01 (03:34):
And this is a Carolina contractor show, and
one thing we talk about on thisshow is houses, and we've done
lots of episodes where we'vetalked about the focal point of
a house ends up being thekitchen because it's where the
food's made, where you usuallyhave your meals, and it's just
that gathering point.
And if you're like looking atupdating a room in your house,
it's why the kitchen is always apopular thing to update because
(03:56):
we just gravitate towards there,and then if you got your mom or
your grandma in there cooking,you can't help but come in the
front door, hang up your coat,and unless there's football on,
maybe, go to the kitchen andhang out there with a uh with a
drink or help make food, andit's you stay there all day
long.
It's a I love that memory.
(04:16):
Absolutely.
So today we're not gonna talkabout your kitchen, we're gonna
talk about houses, and that'sone of the things we we always
talk about, but we're gonna talkabout buying houses and and and
mortgages.
Uh, but I do want to direct youto the website, the
Carolinacontractor.com.
We've got all our past shows upthere, uh, hundreds of them,
(04:37):
literally.
I've mentioned before that thereare the average podcast in the
United States has threeepisodes.
We have like 300, and they'reall listed by title, date, so
you can go down the list, find atopic you're interested, and
listen to it at your own paceand own time.
Uh links to all of our socialmedia sites, the Facebook, the
Instagram, uh, the YouTube page.
We put these shows up on YouTubenow, so you can follow us there.
(05:00):
Also, if you have a questionabout your house or a
suggestion, or maybe a recipefor Thanksgiving, I guess that
would qualify.
You would click on the Ask theContractor button that goes to
Mr.
Donnie Blanchard here on theshow.
He's a general contractor.
Um, but the thing we want totackle today was an announcement
made.
Was it even two weeks ago thisannouncement was made?
SPEAKER_00 (05:21):
I don't know that it's been an official
announcement, but it's it'sbeing thrown around right now.
But yeah, something to the tuneof two weeks.
All right.
SPEAKER_01 (05:29):
The 50-year mortgage.
That's what we're going to talkabout today on the Carolina
contractor show.
Um I gotta say, right off thebat, I went kind of in Dave
Ramsey mode.
You know that look he gives whenpeople call up and say, Yeah,
I'm$478 million in debt, andhe's like, Why are you calling
me uh a 50-year mortgage?
(05:52):
Um, and we just me and Donnietalked before the show.
We're not gonna do good cop, badcop, which uh I have to mention,
Donnie doesn't think he's seentraining day with Denzel
Washington, right?
SPEAKER_00 (06:05):
Yeah, shame on me.
I'm I'm I guess I'm not a bigmovie guy.
I got my favorites, but um, Idon't take the time, man.
SPEAKER_01 (06:13):
So I made a reference to Denzel Washington
when we're talking about theshow, like he'd be good cop, I'd
be bad cop, talking about50-year mortgage.
And he kind of got the joke thatI sent Denzel for those men out
there who have seen the show, Imean the the movie near the end,
where he's talking about KingKong and Pelican Bay.
Um it kind of went over Donnie'shead.
(06:33):
Not to digress.
We do want to talk pros and consof the 50-year mortgage.
It's kind of fluid.
Uh there's not a whole lot ofbanks offering it yet, but this
was announced as a way to allevethe housing crisis.
And as you, Donnie, being in thetrenches, so to speak, not only
as someone who builds, butsomeone who's looking to help
relatives find housing.
This is a big issue right now,getting a finding a house and
(06:56):
being able to afford themortgage.
SPEAKER_00 (06:57):
Oh, yeah.
It's on the forefront, frontburner, however you want to word
that, uh, of my personal life.
And I've got two kids that I'mbuilding houses for at the same
time.
And um, we didn't just arrive atthat conclusion we were going to
build them a house.
We explored all thealternatives, and uh, it's
really tough for a young personthese days to to qualify for a
mortgage, especially without asecond person on that mortgage
(07:20):
and especially without having aconnection to some sort of land.
I mean, what kid can afford togo out there and buy a$30,000,
$40,000 lot, and you wantanything in a decent area, you
know, you're looking at aminimum of 20.
And so uh I just think that uhwhere we are as a society, we're
in a position where the olderpeople are gonna have to help
(07:41):
the younger people, and I justdon't see any way around it
unless this young person comesout of college swinging and
lands a six-figure job.
Okay.
SPEAKER_01 (07:49):
Here's my one thing about the this generational um
younger generation bitching andmoaning about boomers, and
that's what it is.
I've got now boomer fatigue, notfrom boomers, but from the the
millennials.
I have millennial fatiguebecause they're going, the
boomers took advantage like theyhad some grand plan.
The younger generations will getthe advantages of the boomers
(08:13):
when the boomers complete thecircle of life and pass away.
Those houses aren't gonna gopoof and disappear.
A lot of them will inherit somuch wealth and so much property
from um parents andgrandparents, the millennials
and exes will actually becomethe wealthiest generation ever.
(08:33):
But short term, because that'sgonna take 10, 15 years for that
to have a big effect, shortterm, it's really hard to find a
house, and you said it best.
Not many kids are gonna come outof school, land a six-figure job
to be able to get a house rightoff the bat.
And a six-figure job ain'treally gonna cut it right now
because if you want to live in aparticular area and you're not
(08:54):
willing to commute, you're justnot gonna be able to afford it.
I commuted to Raleigh for 15plus years, so I have a 2200
square foot house and it costhalf of what it does just a
couple miles outside of Raleigh.
I was willing to do that trade.
Not everybody can do that, andit's a lot harder now than it
was you know, 20 years ago.
(09:15):
Soapbox aside, 50-year mortgage.
When you heard about this,Donnie, and you have relatives
looking to buy, did that makeyou perk up a little bit and go,
Well, hey, this could work.
SPEAKER_00 (09:27):
I mean, it did.
I I I really just thought aboutit uh from a positive light
before I knew the details,because you know, and at first
before you read into it, 50-yearmortgage, obviously lower
payments, you're makinghomeownership uh a reality.
I mean, there's a lot of peoplewho can afford uh half the
payment or not half, whatever,60% of the payment if you're
(09:50):
just doing the quick math on 50year versus 30 year, but it
doesn't work exactly that way.
No.
SPEAKER_01 (09:56):
It's it it's it's not that simple, but uh I think
maybe the best way to discussthis topic, Donnie, is let's go
back to the training day thing.
You're gonna be uh Ethan Hawke'scharacter, Jake.
You're gonna be the uh trying tohave the heart of gold.
I'm gonna be Denzel.
Okay.
Um so we could maybe hit somepros and cons.
Um name me quickly, based onsome of your research, a couple
(10:19):
pros to a 50-year mortgage.
SPEAKER_00 (10:21):
Well, I think that um the very first thing is that
that so many more people willactually qualify.
And there's no secret uh thatthat owning a home is better
than renting all day long.
30, 50, 100-year mortgage, itdoesn't matter.
You're you have uh homeownershipin your corner, and so you're
gonna build credit from thatstandpoint.
You have an investment that'sgonna constantly go up in value.
(10:44):
I know my house has gained inwhat 12, 13 years, it's probably
gone up anywhere from two tothree hundred thousand dollars
in value, and I don't have anyother investments that have gone
up that aggressively.
And um, you know, you have theoption to uh you have the option
to to uh improve your yourinvestment.
So you can remodel your home,you can change out things to
make your home worth more alongthe way, but I think that just
(11:07):
home ownership versus thealternative of renting is what
the biggest deal is in the wholeequation.
SPEAKER_01 (11:13):
I agree a hundred percent.
The the one thing I will tellpeople when you get your first
home is you don't have a phoneto pick up and call the super
when something's leaking or yougot to fix a problem.
You'll learn a lot ofmaintenance stuff too, which I'm
a big proponent of.
But yes, owning is much betterthan renting.
Anybody that tells you rentingis better with all things being
equal uh is a liar.
(11:34):
My biggest number one problem,then I'll come at you with a
con, is uh it's fifty years.
Um that is a long time, and thatmeans you're gonna be paying,
even if the interest rates werethe same, you're gonna be paying
200% more than what the loan is.
If the interest rate is higher,which it probably will be
(11:55):
because of the length of theloan, you're talking about
buying a house and over the bythe time you'd pay it off if you
kept it 300% higher than whatthe purchase price was or or the
the loan was.
That to me is just horriblefinance.
SPEAKER_00 (12:11):
So I don't know how this applies to our area, but
the median cost of the averagehome in the United States is
four hundred and fifty thousanddollars, and which is insane to
me.
Um, but if we're using that fourhundred and fifty thousand
dollar mark just as a gauge forthis, some of the scenarios said
that you know it may drop yourpayment as much as three hundred
dollars.
So if you've got that mortgageand it's twenty seven hundred
(12:32):
dollars a month, it's gonna dropit to twenty three hundred
dollars a month, which I don'treally see as a significant
savings.
And the the real end game is howmuch you pay if you were to
outline, if you were to last thewhole 30 or the whole 50-year
mortgage, I want to say at 30years you end up paying
somewhere around$900,000, but atthe$50, you end up going uh well
over the$1 million mark.
(12:53):
I want to say the figure wasabout$1.3 million.
So you pay exponentially more tostretch that mortgage out
another 20 years.
That part doesn't make sense tome.
Uh that being said, the averagehomeowner stays in their house
for 12 years, and those areconcrete stats.
So if you just need a foot inthe door for home ownership, you
know, and the 50-year mortgageis the only way you can do it,
(13:15):
then I I really I'm not opposedto that.
And and that way you get inthere and you sell it at the
12-year mark, make whatevermoney you're gonna make from the
appreciation of your house, andyou move on to the next one.
SPEAKER_01 (13:26):
Okay.
Um, I'm gonna go all Denzel alittle bit.
Uh two things.
For the first 20 years of a50-year mortgage, you're paying
interest only, so you're gonnaneed that house to increase in
value to get any equity out ofit.
You some of the models show theequity wouldn't start building
until year 30.
Uh that's crazy to think about,but if it isn't a good location,
(13:49):
you keep it up, it will give youequity just because the value of
it after a few years, and inyour case, you're talking 12
years, you should be able topull out more than you put in,
but you're right back to whereyou started.
Hey, we bought this house, weowe$450 on it, and now it's
worth$550.
So we've we're making it simple.
(14:09):
We've netted$100K.
Well, where are you gonna movenow?
Is that problem been alleviated?
Do we have more housing, or areyou gonna just find yourself,
well, now I got to buy this$800,000 home.
I can put a hundred down.
I'm gonna have what do I do?
Get another 50-year mortgage?
I'm 50 years old now.
SPEAKER_00 (14:26):
Yeah.
I was throwing this around withmy sweetheart, and she came up
with a pretty good idea.
She she adds an extra so manyhundreds a month to her mortgage
payment, and and that goesdirectly to the principal, and
she mentioned to me, uh, youknow, she said, why wouldn't
that be a good idea?
So I don't have any kind ofcalculator that I filled those
numbers in online, but if youare in a position where the
50-year dropped your mortgagepayment, say, you know, we don't
(14:48):
know what the terms are going tobe if this comes about, but I
can't see that they're gonna notgonna make them favorable.
But if if you put an extra$300that you saved down towards the
principal every month, and it itbasically makes a lot of that um
high interest go away.
And that reverse amortizationschedule that you mentioned, uh,
you know, when you when you takea home loan out, you're paying
(15:10):
80% interest, 20% principal inthe beginning, and as you get
towards the end, that flips to80-20 principal versus interest
the other way.
So uh just that amortizationschedule that they come out
with, if they do implement the50-year mortgage, is going to be
a huge part of this thing ifmaking making it make sense or
not, whether it's realistic.
SPEAKER_01 (15:30):
I want to back up a little bit, Donnie.
You said something about, youknow, where you it could lower
their monthly payment of 300bucks.
That's 75 bucks a week.
It's actually probably a littleless, probably like 70 bucks a
week with 52 weeks in a year.
If you can't cut 70 bucks a weekout of your budget somewhere to
make up the difference betweenhaving to get a 50-year loan and
(15:51):
get a 30, that's a bigger issuebecause uh there's no reason.
You can do it, you can findways.
You were talking about um takingyour own lunch to work and
things like that.
Well the prices of going througha drive-thru, there's 10 bucks
and Starbucks, and you know, youdon't need eight streaming
services.
You uh and I'm not trying to smake it too simplified, like
(16:12):
that's the problem.
You can all do it if you cutyour spending, but that 75 bucks
a week is what you're saying isthe difference between having a
30 and a 50-year mortgage.
I don't buy that.
Um and and that's what gets youin trouble.
The other thing is people um paya little bit extra a month, and
sometimes the goal is to pay theequivalent of one month's extra
(16:34):
mortgage on principal only everyyear.
So great idea.
I'm afraid a lot of people willget a 50-year mortgage and say,
look, hun, this is all we do.
We throw an extra 250 or 300bucks a month at principal only,
we'll be paying it off in lessthan 30 years.
But guess what?
In real life, 99.9% of peoplewon't end up doing that.
(16:55):
They'll still end up spendingthat extra cash because they
don't want to put it on thehouse.
So they're gonna end up with a50-year mortgage.
Um, you had a stat, the averageuh new home buyer age, what was
that?
SPEAKER_00 (17:09):
Um it's 40 years old for the average new home buyer.
And just to tell you that we'vebeen barking up the right tree
when we complain about the waythings are going.
Just five years ago, the averageage was 33 years old.
So in in five years' time, it'sgone up seven years, meaning
we're right.
We're right.
It it is ridiculously hard tobuy a house now compared to what
(17:29):
it was just half a decade ago.
SPEAKER_01 (17:31):
So buy your house at 40 with a 50-year mortgage.
Tell me what happens if you'regonna stay there the whole time.
How old will you be when thebank says, here you go, you own
the house?
SPEAKER_00 (17:41):
Still eating ramen noodles at 88, man.
That ain't cool.
SPEAKER_01 (17:44):
Yeah, so if you're buying a house, a 50-year
mortgage and you're 40, I hopeyour plan is you're trying to
build up that equity as quick asyou can to maybe move out or
maybe downsize by using that,say you you netted 100,000 and
and and something like that.
But that's gonna affect how longyou have to work.
It's gonna affect how much youcan put in your retirement, it's
(18:05):
gonna affect your retirement.
Um, there's so many things.
There I think you found outthere is a good suggestion with
this 50-year mortgage where theyto get credit, they'll no longer
hold um medical debt as a ratingagainst your credit.
SPEAKER_00 (18:18):
That's that's probably the bigger news of all
the things because we don't knowwhat the terms are gonna look
like on this 50-year mortgage ifthey implement it.
So technically we're doing ahypothetical show right now, but
the one thing that is in placeis that uh they no longer go by
your your credit score toqualify you for a home.
So that is brand new in 2025.
And the way that it was wordedto me is that they they take
(18:42):
into consideration the person.
So if you've been out of workfrom an injury, you had a
surgery, you're going through adivorce, and your credit took a
hit, they don't just go by astraight credit score from the
three the three big ones.
But the other thing that wasmost important, pri well, second
most important was that theydon't consider your medical
debt.
So they encouraged everybody.
(19:02):
The the stuff I read upencouraged everybody to pull a
tri-merged credit report.
So make sure it hits all threecredit bureaus that the banks
check.
And if you have any kind ofmedical debt still showing on
there, you can dispute that andit should disappear pretty
quick.
SPEAKER_01 (19:15):
Yeah, and I and I'm perfectly fine with that because
medical debts is a weird thing,how it hangs around, because
sometimes you can make itdisappear quickly with a couple
phone calls, and it that's awhole nother show, which we
wouldn't even cover because it'snot our our forte.
But uh, yeah, get rid of that.
That shouldn't be it based onyour job.
(19:36):
I was thinking, um, you've got ason who's how old's Caleb?
22.
22.
Mine's getting ready to turn 20,and I was sitting there
thinking, what if they right nowgot a house and got a mortgage
and they got a 50-year mortgage,and you'd be saying, You'll be
72 when it's paid off.
And I'd be saying to my son,you'd be 70 years old if you
stayed here.
(19:57):
But we're also making anassumption that the first house
is going to be the forever home,which is kind of a um, I don't
know, it's like hallmarky.
It's not really true.
The chances of you buying yourfirst home and it being your
forever home is not likely it.
So I guess the advantage of the50 years, if you get it and you
save that money that you're notpaying on that monthly payment
(20:18):
when it's time to sell, and ifyou've built some equity in it,
we keep going back to$100,000plus the$300 a month you're not
spending, you could thenactually get that forever home
where you want it because you'rejust using a longer, it's kind
of like the using revolvingcredit card, you're moving one
debt over to the next for zerointerest.
Right.
So you can try to finagle thesystem and and get some cash
(20:41):
flow going.
So I guess if you kept it, yousaid they move average within 12
years.
Yeah.
Okay, I could see doing that.
And if the if my my son or youror your son, though I don't know
why he'd be asking me, um, saidthis is my plan, maybe that's
it.
You should go into it with aplan written out.
This is our plan why we'regetting a 50-year mortgage.
We don't plan on paying for thiswhen we're 70 or 80 or flirting
(21:04):
with 90 years old.
SPEAKER_00 (21:06):
Yeah, I mean, I just think back to what we said
initially that it it's just afoot in the door to home
ownership.
And I I do believe that it won'tbe the end game.
And as long as you can alwaysrefinance, that's kind of what
everybody said, including us,when interest rates shot through
the roof, we said, hey, it'snever a bad time to buy because
you can always refinance whentimes are better.
But I guess the hope is thatthings, the interest rates will
(21:27):
eventually drop.
And uh I liked what you said asecond ago, and I think that's
my big delineation, whether ornot I agree with this.
And on one side of the fence, ifyou're building a uh starter
house or a transition house andyour job relocated you, but you
don't want to stay thereforever, who cares?
You know, just get your foot inthe door.
Uh, I think the 50-year allowsyou to uh buy more house.
(21:49):
So if you have the intentions ofgrowing a family and you need
more house than you can afford,maybe it opens the door for
that, and then you're gonna sellit in five years, seven years
whenever you move.
It's not the end of the worldthere, but if you're settling
down and it's your foreverhouse, hopefully you're in a
pretty decent financialsituation if you're thinking
forever.
But uh that being said, I wouldI wouldn't consider the 50 year
(22:09):
for a forever house in any casescenario.
SPEAKER_01 (22:12):
But you know, you like you also said, Donnie,
point out you can alwaysrefinance.
Uh my wife and I, our house wasa 30 year, and a year uh with 21
years left on the mortgage, werefied uh down to a 15.
So we cut six years out of uhthe the mortgage and the
payments only went up like ahundred and some bucks.
(22:33):
So again, that was a better timeto re-fi, and you know, we're
under the the four percent.
Oh now people are gonna hate me,call me boomer.
Um so but if you got a 50-yearmortgage, hey, maybe five years
later, maybe six years later,you go to the bank and say,
Yeah, we want to refi this downto a 30 or down to even a 25.
You can actually re-fi to almostany amount of years you want to.
(22:57):
Um use it as that, like yousaid, this gets you in the
literal and proverbial door,front door of the house.
You have it going, things getbetter, you move up in life and
income streams increase.
Hey, we love this house.
We actually are gonna plan tostay here longer.
Let's knock down the years ofthe mortgage because for every
(23:18):
year you knock down, it's gonnabe uh tens of thousands of
dollars just in interest save.
So imagine if you had 50 and atyear 40 you knocked it down to a
30, or incredibly, say a 20 or a15, you would be looked at as a
genius by the time you pay offthat house, and you paid off by
the time you're 50.
SPEAKER_00 (23:35):
Yeah, exactly.
Um, it's funny you say that inall my research the last couple
days, and I've had this on everytime I had a free moment just to
learn as much as I could aboutit.
And uh, we still don't know,like I keep saying over and
over, we don't know what theterms are gonna be, but more
than likely when you stretch outa mortgage for an extra 20
years, you're a much higherrisk, and so there's no way for
any financial institution totake on a higher risk without a
(23:57):
higher interest rate.
And they went on to say that a50 is gonna be more interest
than 30, but they also say whenyou cut it into a f down to a
15, then the interest rate goesdown with the years as well.
So it got my wheel spinning.
I'm at year 14 out of a 30-yearmortgage right now, and I called
my lady at the bank and said,Hey, should I should I consider
(24:18):
refinancing and changing thisthing to a 15?
I'm already almost at at thehalfway point, and she shut it
down real quick, man.
She said, You're at 4%.
So since you said what you did,I guess I'll be hated too for
that.
But I locked in at 4% and umactually combined two house
mortgages for one.
So I've got a really sweet dealgoing on right now.
And she said that the lowest shecould get with a 15-year
(24:40):
mortgage is not is just belowfive right now.
So I'm still sitting pretty.
SPEAKER_01 (24:44):
Yeah, there's no point.
You can always pay extrapayments on principal, and
that's the same difference as uhchanging the length of your
mortgage or shortening it.
But then again, most peoplearen't going to be that
dedicated to go, honey, we can'tbuy this.
You Eric, you can't have a LesPaul.
This money needs to go to paydown principal on the house.
Um a friend of ours in ourchurch, she took care of the
(25:07):
mortgage payments.
And without telling her husband,she was paying um half a
mortgage payment extra everymonth and didn't tell him until
she came home one day and said,Hey, guess what?
We own our house outright now.
And he was like, How is thateven possible?
Well, for like seven years, shewas doing a 50% uh payment every
(25:29):
month just on principle.
Bang, bang, bang, bang, knockedit out.
That's that takes a lot of umdiscipline uh discipline exactly
to do that.
Um the other thing is even ifthis comes out soon, not a lot
of banks are gonna offer it, letalone what the interest rate is
gonna be.
It's not like you're gonna go toevery bank because a lot of them
are gonna say, Man, we rememberthe last time we offered crazy
(25:51):
rates and we're giving anybodymoney.
They're probably gonna be a lotstricter on who they give money
to, as you said, who they'regonna lend to, and they're gonna
do it at a at a higher rate.
SPEAKER_00 (26:01):
Yeah, absolutely.
You know what we're gonna bitchabout when we get our house paid
off?
What?
The taxes and insurance.
SPEAKER_01 (26:06):
I agree.
Yeah.
Mine went up because Wilson isbuilding a baseball stadium.
Somebody's got to pay for allthe stuff they're doing.
Uh, I got that letter fromRocket Mortgage back in April.
It says, hey, by the way, wantto let you know your insurance
is going up and your propertytax is going up, your
evaluations.
So we just want to let you knowyou're gonna pay$390 extra a
(26:29):
month, and we didn't give youanything in return.
At least you love baseball.
$390 a month for not withnothing in return.
They just said, hey, we're gonnado this now.
So we did get a little discount,we redid our insurance, but the
property tax, you know, youknow, you're you're screwed out
of that.
Hey, last question, Donnie.
(26:50):
You build houses.
Uh do you think if the 50-yearmortgages come out and it makes
it easier for people to gethouses, will that cause house
prices to drop, or would theysay, hey, more possible people
to buy?
Would it affect building?
You know, would you get see ademand of building houses go up?
SPEAKER_00 (27:10):
Yeah, I I'm gonna say it's gonna be the almost the
same, if not just similar,artificial inflation that we saw
after COVID when everybody madea life change that figured out
they could work from home, allof a sudden, you know, a
different style house was inhigh demand, and you don't have
to be in the middle of the city,you don't have to have the
convenience of um of being closeto an interstate.
So I definitely think that ifthis takes a foothold, it it
(27:34):
will create uh a major demandfor for housing, especially in
an area like where we are, themiddle third of the state,
everybody's moving here, so manybusinesses coming this way, and
it's definitely gonna fliparound what we just got under
control.
So it's a great thing that thehouse prices will go up, but in
the big picture, uh I think theeasy math just tells you what
(27:56):
you need to know there.
You're gonna get a little bit ofa break on the mortgage payment,
but you're gonna pay an extrahundred thousand dollars more
than what the house is reallyworth.
And that I don't know, but youwould you would hope that the uh
experts would think all thatthrough and they have a plan in
place, but it ain't always likethat.
SPEAKER_01 (28:13):
All right, I can give you 30 seconds for this
answer, and you can't answer itin 30, but see if you can.
You have a magic wand, Donnie.
You can do one or two things tohelp the housing shortage go.
SPEAKER_00 (28:27):
Hmm.
I would eliminate closing cost.
Builders like me can't uh offerprograms like that similar to
the big builders.
So that that's a chunk right upfront.
That would help people uh on thefront end, and I would offer
50-year mortgages with a lowinterest rate and figure out how
to pay for it with tariffs.
SPEAKER_01 (28:47):
Hmm, that's pretty wow, that's deep and that's
good.
I like the idea someone floatedof the transferable interest
rate.
Say you got a 5% rate on yourhouse and you sell that house
and it's a 50-year mortgage, thenew buyer has the opportunity to
buy it, they can put thedifferent the equity amount into
the loan.
Obviously, the seller is gonnamake some money, but then the
(29:09):
interest rate from that bank,they'll say, we'll keep the
interest rate the same.
I know it's hard because of thecredit issues or reports from
seller versus buyer, but therewas an idea of, hey, just keep
the interest rate locked, let ittransfer onto that house, and
then people won't have to worryabout, well, I'm not gonna buy
now because it's too high, orI'm not gonna sell because I
(29:29):
won't be able to buy anotherhouse in its place.
So uh again, it'd have to be amagic wand.
SPEAKER_00 (29:35):
Yeah, for sure.
But that's a great point,though.
SPEAKER_01 (29:37):
People just have to agree with us, and you know,
this country would be a lotbetter if they just listen to me
and you, but the board ofbuilding affordably.
That's going to be the uh theafter the show show.
We'll we'll have a second showwe'll be talking about.
Listen to us, and things will gofine.
All right.
Well, I appreciate everybodychecking out the show today.
Again, hit the website, theCarolinacontractor.com.
(29:58):
On the surface, I don't like.
the 50 year mortgage at all.
But uh you can give your opinionby hitting the website there and
clicking on that assetcontractor button.
And um maybe you got an idea howto make housing more affordable.
I know getting the governmentout of it, maybe reducing the
red tape would help too.
But yeah, let's instead ofgiving people a couple thousand
bucks in a check that they'rejust going to get a iPhone with,
(30:21):
let's apply it to housing or tothe dead or well, we're gonna
get into another showautomatically.
I'm sorry.
I'm better step away from that.
I'm just gonna say this.
Thank you for tuning in.
I think the 50 year mortgage onthe surface is a bad idea.
Donnie I'm I'm still up in theair.
Yeah.
Still up in the air.
All right well maybe we'll havean answer next week and
(30:42):
everybody can check that out anduh we'll we'll we'll talk or
revisit this subject again onthe Carolina Contractor Show.
Want to thank everybody fortuning in and uh hope to see
you, hear you and look at younext week.
SPEAKER_00 (30:54):
Thanks everybody.
Love you guys
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