Just more evidence that this administration gladly serves up the American people to wall street. I am not a particularly smart person, but even I know there is zero advantage for home buyers here. It ballons the cost of a home multifold. Since the American leaders are smarter than me, it means that they are proposing these financial slavery contracts ON PURPOSE, and their goal is to bleed away the last dollar from the average American. Didn’t Elizabeth Warren warn this was going to happen?
I bought a fairly cheap house and paid it off as fast as I could.
Could I have made more by investing that money instead of shoving it into a mortgage? Maybe.
But you can’t live in an investment account. When the markets take a shit, you don’t lose a room from your house. And when it’s paid off, your outgoings are basically food, electricity and internet.
Don’t forget friggin property taxes
In Australia the Average mortgage loan term is over 30 years but the average duration before its paid out or refinanced is only 8 years. Id be more worried about the terms and conditions surrounding early payout and refinancing than the theoretical maximum term of the loan on paper because if they want to be truly predatory thats where it will be hiding.
guess it’s time to start planning my great-grandkids’ mortgage payments now. gotta secure that intergenerational debt early.
Well, the USA has 96 month automobile loans and this kind of shit does not surprise me. None of the asswipes in DC are discussing the piss poor income distribution in the USA which leads to affordability and a decent middle class life. In 1789, the French were 100% correct.
Also, if the dealership is offering you 29% on a 7 year loan, please walk away. Stop giving in to that shit. It’s better for you, and it’s better for the rest of us.
Average age of a first time homebuyer is now over 40. Even at a reasonable interest rate, most buyers would die before they actually own the house.
As intended
Can’t pass it on to your kids when the bank forecloses on it
Were not enough boomers taking them up in reverse mortgages?
Because that’s where all my “generational” wealth went. “We can’t take it with us Jimmy” though we did, in fact, take it from those who came before.
I really thought medical bills would solve that problem.
Late stage capitalism demands that you will own nothing.
For now… until they want you to have less. For fun this time.
I know someone living in the Netherlands (home of Lemmy.world!) that told me they had interest only mortgages that didn’t pay toward the principal and that this was common over there. It seems like these new 50 year mortgages in the USA are a step going that same way. Anyone from that area confirm this?
I’m Dutch, just bought a home, and I’ve never heard of that.
Edit: I think that is called an “aflossingsvrije” mortage, banks stopped providing those after 2008 for obvious reasons.
Eidt 2: Apparently it still exists, but can no longer be used to finance an entire house. From my research it is often still possible for up to 50% of a house’s value. It was also not an option in the way we bought our house.
In the UK they were popular for “buy-to-let” properties - so it didn’t really matter that you have barely any equity in your second home, so long as the rental income covers the interest payments.
Congratulations on your new home!
Thanks for providing that info on the “afloasingsvrije” mortgages. It was a few years before 2008 when she bought, so that tracks with what you’re reporting.
Here in the USA we have fixed rate mortgages, where you have a single fixed interest rate for the entire length of the mortgage, but I know that not all countries have that. From what I understand in Canada the rates fluctuate during the mortgage where you can get something like fixed for 5 years (maybe 10?) but then the rate can increase on the existing mortgage you’ve already got.
How does the Dutch system work? Fixed for life of mortgage? Continuously variable? Fixed for a time like Canada? Something else?
We have different types of mortages, but most (maybe all, at least the most common types) have a fixed rate over 30 years. Maybe variable rates exist, but they are at least very uncommon. Shorter mortages are also possible I think but are of course very expensive.
One weird thing we have is that part of the interest you pay is tax deductible. (Progressive parties are i.m.o. rightfully trying to abolish this subsidy for the owning class, but I digress.) for this reason there is a type of mortage where you first only pay the interest, and slowly start paying off more and more of the mortage, which means your net mortage fee slowly increases over time, which is nice if you expect your income to increase over those decades.
One weird thing we have is that part of the interest you pay is tax deductible.
This matches the USA system for mortgages.
for this reason there is a type of mortage where you first only pay the interest, and slowly start paying off more and more of the mortage, which means your net mortage fee slowly increases over time, which is nice if you expect your income to increase over those decades.
This sounds new to me. In the USA we do have amortized mortgages so a very high percentage of the monthly payment is interest with little going to principal. Over time that relationship flips where you’re paying more principal that interest. However, in our system the mortgage payment stays the same, only how much of that fixed payment goes to interest vs principal changes.
Oh yeah the gross mortage payment stays the same. But over tme less of it is tax deuctible. Sounds like that system is the same across the countries.
Dutchie here, nope. We are paying both principal and interest. Plus when i to it out, my mortgage was 102% of my home’s value. And as it stands, the bank owns my ass exactly until I retire 🤷♂️
At least someone wants to pay for your ass. I can’t give this thing away.
Not sure if this is what they were talking about, but balloon mortgages are a thing here too. I can’t ever imagine considering one, but they exist.
Balloon mortgages would be good in only two situations:
- you’re not planning on living in the house very long, so you likely exit before the balloon payments hit.
- you believe interest rates will decline in the next few years and you can refinance to a fixed low rate
I don’t ever see myself using a Balloon mortgage. Worse, they are frequently sold via predetory lending methods. Unsavvy buyers are convinced to take a balloon mortgage not understanding the payments will rise dramatically in the years ahead. This can lead to eventual foreclosure when the owners can service the higher payments.
If you’re not planning to live there long, I don’t think you shouldn’t be buying; that’s one of the few times I’d choose to rent. I guess maybe if home prices are rising then you can accrue some equity, but then you risk buying at the top of the market. I genuinely how it would compare to a fixed rate mortgage though.
If you think interest rates are going to decline, you can easily refinance a fixed rate mortgage as well. I don’t see any benefit in that scenario, but there’s a downside in that if rates don’t go down you still have that balloon payment to worry about, and if you don’t qualify for a traditional mortgage, you’re really in a bind.
Maybe if you’re flipping a house it makes sense, especially if you want to minimize cash outflow. Otherwise, there are so many more downsides that are much more severe than the mild upsides that you might gain. Perhaps there’s a few niche applications that I haven’t considered though.
Screw .world
you…realize thats not only where this Lemmy Community is…but also your user account, right?
Yep.
Nothing is stopping you from moving to another Lemmy server and blocking .world entirely. You have to find some value here if you haven’t done that already. If you hate it so much why are you still here and posting instead of on another server with other non-Lemmy.world communities?
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
Yes. The tradeoff is you have a property that is in your name (with a bank note attached), and if the property increases in value during the time you own it, when you sell, you pocket the difference. If you have a fixed interest rate, it also caps the growth of your payment for housing for the entire time you live there. There’s quite a bit of value in that.
The year I turned 40, was the year I moved into my first non-rental property.
I’m living proof that shit is fucked up
I’m turning 40 in a few days. I finally moved into a crazy beat-up fixer-upper/possible crime scene about 3 weeks ago.
Welcome to the club. Were you able to afford the fixer upper on your own, or did you need to split the financial burden with another person?
I found a rare rent-to-own locally. So it’s in my name and otherwise the same as buying, except the original owner is the bank. As long as I stay 2-3 years, I come out ahead if viewed as a rental. If I make it 20 (or can get ahead/clever in various ways), I own it outright/maybe make a little bit.
Good luck.
I’m a couple of years older and JUST escaped renting. It’s ridiculous!
Welcome to the club.
What percentage of your income now goes to your mortgage payment? For me, it’s like 110%… But I have help, so my share is only like 35%
It’ll actually work out better for me since I currently live by myself and pay all the rent and utilities, and I’m buying with my partner so I’ll finally be able to share the load 😀
And then their kids keep paying until they die and still haven’t paid it off, even though they’ll have paid twice the original amount by that point. Whoever came up with this bullshit is probably right now buying their third yacht from the bonus.
30 year mortgage means you pay for the house twice with interest. 50 year mortgage means paying for the house 3x.
So basically you won’t own shit.
Never did.
Bank workers are, at best, getting a small bonus when you sign that mortgage. Your fellow worker isn’t the enemy.
These are the financial professionals that normal people should be able to trust to make important decisions.
No, they’re not. A lot of them don’t even have a degree in anything.
Your personal financial advisor is a person you should be able to trust with your important financial decisions. They guy at the bank handing you a contract to sign is an employee with a script on rails, a manager, and a commission structure.
In a better world it wouldn’t be like that but in a better world I don’t think I’d be going to a bank in the first place.
financial professionals that normal people should be able to trust
wew.
I’d like to differ. They are the ones selling you this slavery contract and probably don’t mention the impossible to deal with interest.
A bank worker who is not your enemy would suggest you to switch banks or give you a reasonable contract. Of course depending on bank they might lose their job over the last one.
What kind of wacko lib upvotes this nonsense?
Banks are capitalist AF. Literally the heart of capitalism.
Pretty disgusting to hear these leeches framed as “workers”.
There’s literally no work involved in collecting mortgage payments. That’s why it’s called “passive income.” That’s the whole point of hoarding land and housing.
The guy who facilitates your mortgage contract isn’t getting your mortgage payments. The corporation that employs them is. The guy is making a wage or maybe just an hourly salary, plus commission.
By your logic, the checkout worker at costco is skimming off your wages to gate your access to food and clothing. The only difference is that you wouldn’t personally object morally to that line of work, but your personal morality isn’t a class distinction.
All companies are “capitalist AF”. It’s not just banks. But even a sleezy car salesman who is trained to convince you to sign an extortive lease isn’t oppressing you. He isn’t betraying you at a class level. He isn’t the one getting your monthly payments. His plight is exactly the same as yours.
This isn’t “wacko lib”, it’s literally Marx. And if we can’t understand that and stomach the differentiation, we will forever collectively stay oppressed.
Bro, do you really think the owning class is the one on the other side of the desk when you sign the paper? No, it’s another peon like you or me.
Have some fucking class solidarity
I’m gonna be dead in 20 years, so I’m so sorry to have to turn this down lol
They’re considering offering a 50-year mortgage product to a market where the average first time buyer age is 40. Like no joke they’re aiming to lock people into a mortgage that would cost more per month than renting the same property until they’re 90.
they’re aiming to lock people into a mortgage that would cost more per month than renting the same property until they’re 90.
How do you figure that?
Me too bro, me too.
I’ll counter with a 100 year 2% mortgage
I’m pretty sure interest only mortgages already exist in some places.
Isn’t that just renting?
Almost, it’s just now you also have to pay for renovations and stuff yourself.
You do get to keep any growth in the value of the property too
Or eat any loss in the value of the property
define “keep” if you cant ever put your name on it
Cool. Put it on my credit card.
A 50 year mortgage will be a lot like renting. Because the bank will own your shit until you die.
That’s what we get for saying “why can’t I get a mortgage when I pay more in rent just bc my credit is bad”, the banks figured out how to rent properties to you.
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I’ll take a 90% 1,000 year loan please.
(hint: it would be over $30,000 per month payment)
The american dream of home ownership is rooted in settler colonialism, and used as a tool to keep workers in debt and afraid to take risks organising
The Pueblo, Iroquois, and other non-nomadic Native American groups might disagree about the colonialism part.
Why?
Because they built houses. It’s not like white people invented the idea of home ownership.
Did they own the houses, or were they the communities houses?
Depends on the group. Iroquois houses were communal but Pueblo were more like townhomes. Other groups, like the Mississippian culture built individual homes.
Ah yes… The famous Iroquois mortgages… jfc.
Right that’s why no other country had dreams of home ownership.
American exceptionalism really did a number on you guys!
Pretty sure almost every other country also inflicted or was subjected to colonialism/imperialism.
For example, people in Belgium also have dreams of home ownership. That’s part of why they genocided people in Africa. This is ubiquitous.
Headline: Save 200 dollars a month with a 50 year mortgage over a 30 year!
Subtext: … and end up paying double the interest to us for the benefit, and die before your loan is paid off so we get to take the house back from your corpse, sell it on the cheap to a corporate real-estate investment firm (that we have stock in) for just enough to cover the remaining mortgage balance. They’ll turn your multi-generational family home into a shitty rental property or leave it empty to keep the rest of their rents high and your children get nothing cuz fuck em!
Is the image AI? The face of the guy to the left is kinda weirdly focused.
Yeah it’s a cropped AI upres of a video still, this is the original.
It’s the Curiosity Rover team celebrating a successful world-first rocket crane landing.
Thanks! The original image is so nice, why do the cropped AI version? :(
