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385

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[–] • 5 pts

A 30-year fixed $240,000 loan at 3.8% pays $162,587.15 in interest over the life of the loan. That same loan for 40 years pays $227,235.72.

It's a gift to those holding mortgage-backed securities, not to homeowners. It's more predatory lending to financially illiterate people. You know what pays more interest than a 30-year loan? A 40-year loan.

[–] • 0 pt

Exactly. Its only making your problem worse. Best thing is to contibue paying as youre supposed to

[–] • 0 pt (edited )

With high inflation who gives a shit? I'll gladly take a 40 year loan. The interest is tax deductible too.

I bought a house 2 years ago for 700k. Now its valued at 1.1 million. 500k mortgage which I can pay off at any time.

Inflation isn't going anywhere so I don't see a massive collapse in home prices anytime soon.

[–] • 0 pt

Inflation isn't going anywhere so I don't see a massive collapse in home prices anytime soon.

Watch what happens when interest rates go up, which they must. All those potential buyers that can afford to buy your house at $1.1M today at 3.8% can only afford $815,000 at 6.5% - the payments are the same.

[–] • 0 pt (edited )

Pay will track inflation to some degree. Unemployment is still low.

If the world is as bad it may seem debt wont matter anyways. Everything will collapse and what you think you own will be taken.

So yea, don't fear the mortgage, especially if you have a high paying job and your local property taxes are low.

[–] • 0 pt

Yes, but financially illiterate people also do not realize that a mortgage at 3-5% is good debt, you can very easily make more on that using the money elsewhere.

Scenario #1 -> Man quickly pays off his mortgage in 10 years by saving every penny and putting it into early payments on his mortgage. He has peace of mind that he has no mortgage payment.

Scenario #2 -> Man leaves his mortgage as large as possible for as long as possible, and still saves every penny, but instead invests it in something else like his own business, stocks, crypto, more real estate, etc.

Both men have the same income for 25 years. Which man will be further ahead?

The math is clear that scenario #2 will provide that man with EXPONENTIALLY more success. The risk with scenario #2 is that simultaneously asset prices crash at the same time as mortgage rates skyrocket could leave the holder unable to service his debt could result in him losing everything, even if the prices return to normal in the next few years.

If however, you are in a financial position that you are able to wait out a price crash, OR if you secure FIXED rate debt, you will be fine and still be much better off (if historical metrics for the last 100 years hold true for the future)

[–] • 2 pts

All that'll do is perpetuate the housing bubble. If 40 year mortgages were available, and the interest rate was a quarter of a percent higher, it would translate to buying roughly 10% more, co.pared to a 30 year mortgage.

People would just spend more on buying homes and the problem wouldn't go away. In fact, it'll get worse because a lot of people will have even less equity in their homes.

If government really wanted to decrease the rate of foreclosures, they should

  • Decrease the maximum loan term to 15 or 30 years
  • Increase the minimum down payment for loans
  • Set a limit on how much local governments can tax residential real estate

None of that will ever happen, of course.

[–] • 2 pts

borrowers will have more sustainable monthly payments, the department said.

Saint Peter don't you call me because I can't go, I owe my soul to the company store.

[–] • 1 pt

On the one hand you could pay on the 30 year schedule and it doesn't cost you anything. On the other hand most people are financially illiterate and won't divert the monthly surplus when available into the mortgage. If you were extremely confident you could convert the mortgage surplus into silver or gold and chunk the mortgage at a later point.

[–] • 1 pt

Alongside of benefitting borrowers, the rule would also reduce losses to FHA’s Mutual Mortgage Insurance Fund as fewer properties would be sold at a loss in foreclosure or out of FHA’s real estate owned inventory...

Da fuq?!

scratching record player sound

When did the government get a Strategic Housing Reserve?!

Surely no fuckery would happen with that like - slowing or speeding the acquisition of property in a city, county, or state to influence local politics or elections - bureaucrats rigging the system to buy property on the cheap ( see "Wild Horse Adoption" ) - preferential action for property owned by, say, Chase - not selling houses and then saying, oh, hey, let's put that nice Somali family in this one - amassing houses and selling them for a song to White rock? ... That would never happen.

Wonder why houses are expensive? Here is a reason: the government owns empty houses.