Some Thoughts On The 50 Year Mortgage And Housing Affordability

The 50 Year Mortgage And Housing Affordability

I have seen a lot of political opinions surrounding the 50 Year Mortgage loan that was floated as a possible avenue to alleviate the affordability problem in the housing market, and I just want to offer up some thoughts and opinions that exist outside of the political tug-of-war for which otherwise innocuous information is often weaponized.

So the first question I have is, will this potential product make homeownership more accessible? Will it accomplish this basic functionality? Maybe. The concept strikes me as a way to lower monthly payments over an extended period of time to make homeownership more accessible, but without a proposal to examine this is just speculation.

Will the mortgage interest or the lender’s general profitability from the 50 Year Mortgage be structured in such a way that it will sort of entrap homebuyers with a lower gain of equity every month? When homeowners see a decrease in their gain of equity, it slows down forward progress and may lead to a situation where homeowners don’t have enough equity to move elsewhere. Essentially this question is: will this just be a new arrangement of paying your mortgage loan as a sort of “rent” to the bank with no end in sight, while still assuming full liability for the property and its condition?

I want to see an increase in homeownership for average Americans. I believe it helps create opportunities for people to have a home as opposed to renting one. What I would not want to see is a loan product that hampers financial growth for the average American in favor of providing a means by which the banks can continue to rake in maximum profits at the expense of the “little guy.”

Ultimately, when it comes down to it, there is no solution to the housing crisis that is complete without a plan for new construction, and affordable alternative housing solutions such as single person dwellings. With this in mind, I consider the 50 Year Mortgage concept to be simply a band-aid over a profusely bleeding bullet wound that is the housing crisis, and pretending that this could be a great help to average Americans illustrates a failure to identify and respond to the real problem – lack of housing.