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A 50-year mortgage is debt slavery that locks you in. With most homeowners moving within decades, you could get stuck unable to sell if the market dips and you still owe most of the principal. Even a 30-year loan makes more sense.
A 50-year mortgage is debt slavery that locks you in. With most homeowners moving within decades, you could get stuck unable to sell if the market dips and you still owe most of the principal. Even a 30-year loan makes more sense.
The second thing you have to understand is that that 50-year note, that's debt slavery. Just call it what it is. And yes, the memes on the internet are probably right. Dave Ramsey is likely in cardiac arrest right now over the idea of a 50-year mortgage. Now, I want you to think about it this way. In fact, on the podcast I did with Rob Hahn in our Under All Is the Land podcast, we talked about whether the 30-year is even a good idea. I maintain that it is. Rob thinks it's too long of a timeframe. And here's why. That's a debatable question. When you have any timeframe on an asset, when you're talking about the debt underneath it, if you're on a 15-year note, you're going to still pay a bunch of interest at the front end until you start to chunk away at the asset later on. That 30-year fixed means you're paying even more debt service at the beginning before you start paying down the real note. On a 50-year, y'all, you would be paying interest for a long time before you ever start paying down your own debt. Now, if you were going to stay in the house 50 years, that would be fine. But nobody stays in a house 50 years except your grandparents and your great-grandparents. The younger the generation, the more likely they are to be mobile and want to go live somewhere else. That's cool and all, but if you have a 50-year note, you haven't paid down that chunk. So unless house prices go up, it's going to be hard for you to sell it because you haven't paid down the note. Now, We shouldn't be making that assumption. This is the other big challenge that we have in the market right now. A lot of people assume house prices go up over time, and historically they do. If you look at a 50-year window from day 1 to year 50, oh, house prices do go up, but in the interim there are fluctuations. What might happen in your life to cause you to have to sell it during a fluctuation? Could it be death, divorce, job relocation, family change? There's lots of reasons people buy and sell houses. And those reasons happen regardless of the state of the market. If you're in a 50-year note, you're going to have a harder time saying yes to selling when you're in the chain.
