A 50-year mortgage sounds like affordability, really?

[Adam Macias]

A 50-year mortgage sounds like affordability — but it’s really it'll be debt that never ends. lol

On paper, stretching a mortgage from 30 years to 50 lowers the monthly payment, yes.

But in reality, you’re paying far more in interest while barely building equity for decades.

If you buy a house at 25 years old if you're lucky, you'll be 75 when the mortgage term ends...

It’s housing that feels like ownership but functions more like renting — just with a longer contract and a higher total cost.

The real problem isn’t the length of the loan.

It’s the affordability crisis that’s forcing people to consider lifetime debt as a solution.

Until we address prices, wages, and supply, extending loan terms only delays the inevitable...

The further elimination of the middle class chasing the American Dream of owning a home.

[Erik Estrada]

Quote from @Alan F.:

Quote from @Erik Estrada:

Quote from @Adam Macias:

A 50-year mortgage sounds like affordability — but it’s really it'll be debt that never ends. lol

On paper, stretching a mortgage from 30 years to 50 lowers the monthly payment, yes.

But in reality, you’re paying far more in interest while barely building equity for decades.

If you buy a house at 25 years old if you're lucky, you'll be 75 when the mortgage term ends...

It’s housing that feels like ownership but functions more like renting — just with a longer contract and a higher total cost.

The real problem isn’t the length of the loan.

It’s the affordability crisis that’s forcing people to consider lifetime debt as a solution.

Until we address prices, wages, and supply, extending loan terms only delays the inevitable...

The further elimination of the middle class chasing the American Dream of owning a home.

 Seems like this might benefit some RE investors, seeing that they can lower their current payment and increase rental cashflow. Some of them might not even care to pay the current mortgage off, especially if they have an active business. 

I don't really see how this will benefit any first time buyers. If anything the shared appreciation program seems more of a benefit for a lower payment and lower barrier to entry. 

 Seems like the 50yr "could " be a useful tool for a few (disciplined) 1st time buyers? No prepayment penalty & paying down principle plus sweat equity (valu add) may be good for some?

given that strategy wouldn't shared equity be worse if the buyer did heavy forced equity? Adding bd/ba....pop top etc. Especially here in CA?

School me.

 A lot of the shared appreciation mortgages, at least here in CA are basically a lottery.. 

Many first time homebuyers struggle to have any skin in the game in the first place. This loan pretty much gives them the best of both worlds. Low/no downpayment and a lower mortgage payment. Since it is a lottery based system, and whoever applies must follow certain first time buyer requirements, it actually helps the people that need it the most while also controlling the buyer demand (luck of the draw). 

I think the 50 year mortgage is just going to increase RE prices significantly. The lower payment and the few buyer restrictions for it is going to increase buyer demand significantly, and we'll arrive to the same issue. I am pretty sure the rates on these will be high on these as well, unless it is an FHA loan.

Who really knows, but just based on my conversations with buyers in CA, the main issue is skin in the game and mortgage payments being triple the rent. The shared appreciation mortgage helps solve both of those issues, while somewhat controlling buyer demand with the lottery system.