Loans in general are bullshit, particularly when done outside of a business context.
If people can't afford homes because they don't have X hundred thousand dollars in the bank then homes shouldn't cost X hundred thousand dollars due to market forces. Also only individuals should be able to purchase homes and apartment complexes should be abolished as a concept.
I've been in debt my entire adult life, from college loans to car payments to mortgages. I want to pay off my home so I can finally be out of debt; but everyone tells me "But you should use it to lower your taxable income through the mortgage interest deduction." In other words, the government is incentivizing me to stay in debt. Oh, and even when I do pay it off, it's not actually paid off because I have property taxes for the rest of my life.
The entire world economy is built on debt and usury. It's bullshit. All of it. And the only solution is a total reboot, and there's no way the rich will let that happen.
So many finance guys freak out at me when I told them I paid down my mortgage in 10 years. They're basically telling everyone to take out a loan so you can put into a 401k. Asinine.
Realize that as soon as a bank makes a loan they sell it to a larger bank. 50 year mortgages will triple the selling price of mortgage backed securities. All the big investment companies will get massively richer from this. That's why they tell you never pay off your mortgage. Since so much fake wealth is generated by cycling the loans, if everyone paid their debts the system would collapse.
Only the interest paid on a mortgage is tax deductible. The principle paid is not deductible.
People that pay it down aggressively may not benefit at all from this deduction. Because they will progressively pay less and less interest over the years. There is a pretty high standard deduction already. Without other itemized deductions, many which have been removed since TCJA, it probably won't move the needle on tax bracket or taxes owed.
It might benefit very few like a high income single taxpayer that itemize beyond the standard deduction, and then only for a few years of the life of that mortgage.
Why would it be? You're buying an actual asset that you can later sell. Otherwise you assume it'd be like a 401k. You can put the money in tax free but when you later sell the house and claim a profit you may have additional taxes to pay at that time.
Which is how the current system works, not an agreement with it, there just shouldn't be income taxes.
I never said that it should be. You replied to the grandparent that it is deductible. The grandparent said that a mortgage should be tax deductible. Neither you or the grandparent specified what portion should be or is tax deductible.
All I am saying is the portion of mortgage, that is tax deductible, is not a net tax benefit to most people.
I understand how tax credits and deductions work. A tax deduction only reduces taxable income. If one doesn't have itemized tax deductions exceeding the standard deduction then a relatively small deduction, on its own, has zero net benefit to the taxpayer.
One can take a deduction from their taxable income and it not matter in the total amount of tax owed.
The mortgage and housing industry is just a big grift anyway. If we look at a $400k house purchase, as typical two real estate agents make $12k each, a mortgage broker or the bank or both make $4-12k ish. A title company makes $2k, an appraiser makes $500. Then there's another $2k of other random fees going to someone. That's all before the government gets their cut or a dime of interest is paid. Then a lot of people will have a PMI payment so they get their cut too. There's too many people that have their hands in the pot, and a lot of them don't need to get paid a percentage either. They do the same work for $200k vs $400k vs $800k but get a percentage?
Then you look at this stupid thought of extending mortgages. Just for shits and grins I ran some numbers. This is for a $400k loan at 6.5%
Payments are:
15-year - $3484
30-year - $2528
50-year - $2254
100-year - $2169
Of course they want longer mortgages. I think the average life of a mortgage is less than ten years. What does that mean for the bankers? Well let's assume you have each of these and pay 10 years. You will have paid this much in interest
15-year - $196k
30-year - $242k
50-year - $255k
100-year - $259k
Oh look they make more? So when you buy a house, live it in ten years and sell it, if you assume a typical profit over that time, the bankers still get their money AND more of yours. If you're talking like this as 50 versus 100, all for a difference of less than $100 a month.
Want to fix the housing industry? Fix all the process of buying and cut the grifters.
Real Estate agents exist because everyday people, and the banks don’t want to spend the time advertising and shilling the property, so they hire people to do that for them, so that’s actually reasonable. It’s the same reason why most people will trade a car into a dealership instead of trying to sell a used car themselves; the “lost money” isn’t worth as much as the time saved not having to hassle over values.
An appraiser values the house, who also exists for similar reasons as to real estate agents.
The rest I don’t know because I’m not as tuned into the housing market as I am cars, but real estate agents and appraisers have actual purposes existing.
Yeah I wouldn't argue either of those don't have a purpose. I don't really see why their compensation needs to be tied to the price. It's a conflict of interest for the buyer for one.
Many of the things in the process have a purpose, it's just overly drawn out and ridiculous. A LOT of money is made on the front end of a mortgage, after which it's sold off to investors and no longer even a risk for the bank.
Real Estate agents exist because everyday people, and the banks don’t want to spend the time advertising and shilling the property, so they hire people to do that for them, so that’s actually reasonable. It’s the same reason why most people will trade a car into a dealership instead of trying to sell a used car themselves; the “lost money” isn’t worth as much as the time saved not having to hassle over values.
That, and filter out the window shoppers wasting your time. If an agent is talking to another agent, there's a good chance the buyer is already pre-approved for a loan and serious about buying.
Why don't we kill all central bankers and shut down all central banks so we don't need to do retarded usurous shit like "Mortgages" in the first place?
30 year mortgages are STILL BAD, they're just the "reasonable" option we've been fed for decades.
Our entire banking system is premised on the ability to siphon away wealth and bolster elites while creating as little real value as possible.
If you're a large institution, then you have the ability to take out a loan to buy up hundreds of family properties, and if it all comes crashing down because you're an idiot then the Fed will step in with relief cash or allow 401ks to invest in private equity or just invade Venezuela for you.
a 30 year wasnt good, but it was acceptable when rates were below 3%. with rates around 6%, because mortgage interest is front loaded into loan repayment amortization schedules, you end up paying ~125% of the loan amount in interest alone on a 30 year.
Basically nothing. The difference between the 30 and 50 is small enough that if it is making the difference for you between owning and not, then you are living too close to the edge of your means for it to matter anyway.
But, as someone who recently bought a home, it will absolutely work in practice. People are completely obsessed with "lower monthly payments" to the eclipse of all else, including paying way more in every other way, and everyone involved in the process of buying a home will put it in front of you. I've watched people refinance for barely 100$ difference.
And that's why the parable of "still having wet feet" is important. Because people will kneecap themselves for short term lower pay while setting themselves up for a terrible long term. Heck, that's how a lot of "first time" or even "Vet" home loans screw people. The basically 0 down they lure people in with seems appealing and then saddles them with a higher payment anyway.
Again, if the difference is what makes or breaks you then you are living too close to the edge for you to be getting into this to begin with. And that does preclude way too many Americans from home ownership, which is the bigger problem. But they still need to be responsible enough to not screw themselves along the way.
I get the obsession with lower monthly payment, because for buying your first house you're comparing to renting. Even a 50 year mortgage is a step up from that. Nobody can kick you out of the house or change the price, and you're building a little equity... But even considering that, I don't get how a 50 year mortgage would be worth it. Who wouldn't pay an extra 100 a month to cut the term by 20 years?
Who wouldn't pay an extra 100 a month to cut the term by 20 years?
The same people who aren't paying an extra 100~ a month right now to cut 3-7 off their 30 year mortgage. Or cutting their car loan in half by doing so, and so on.
Like, I get the problem. Money is tight all around and the barest minimum is all a lot of people can manage while still "owning" something. But many of them are flying too close to the sun to do so, and are just kicking their own can down the road by accepting short sighted deals.
Yet people want to own, and they are completely in the right to want it. And seeing 2200 instead of 2400 could seem like a hugely deciding factor for someone who has a monthly take home of 3000$ even if it costs them 200k more in interest. Heck they could even convince themselves it means their kids will benefit because it'll only be 10 years on a low mortgage for them! It'll be easy to talk people in to, even if its only going to screw them.
Which is a more secure environment in which to raise a family: a house with a mortgage, or a rented house or apartment? Allowing young working adults to put down roots is good for society.
Well, I live in a house so I don’t have to live in a 70 unit apartment building with a thousand section eight welfare recipients spitting out Spanish speaking only degenerate children, playing cha cha music all night and rifling through my apartment when I leave to go to work so I can pay for their EBT and subsidize housing. I’ll never pay it off and I don’t care. I’ll sell it before it’s ever payed for. It’s a no brainer.
What happens when the government builds a few 70 unit Section 8 apartments in your neighborhood and you go underwater on your mortgage because nobody wants to live there anymore?
"not going to happen to me" can you see the future 50 years ahead?
I’m also gonna go out on a limb here and say most people commenting on the original post don’t own a home and probably never did.
There’s lots of advantages to owning.
Honestly in the current housing market as it exists, this is a good symptom of how fucked it all is.
Ignoring all the generational debt and absurd prices, something everyone already has spoken about at length, most people don't make it to the end of their mortgage anyway. So the 30 or 50 is meaningless to the common person, one is just a smaller number than the other and they'll be selling in about a decade anyway.
Why is that such a common thing to sell when you are 1/3 to almost halfway done with your mortgage, just to restart it way later in life guaranteeing you cannot have it paid before possible retirement? I think the answer to that is much more important to "fixing" this than people give credit for.
30 vs. 50 is definitely meaningful to the common person because you build about 15% equity after 10 years with a 30y vs. almost nothing with a 50y.
If your argument is that the common person is too dumb to care about this, then yeah you could say it's not meaningful. But the only way this doesn't kneecap them financially is if housing prices keep appreciating like a rocket forever. When that ends, the line to pay the piper will be LONG.
You're right, I hadn't even considered the equity angle. That does make it considerably worse.
But yes I do think most people are too dumb to think about this, though not because of their own retardation but because it has gotten so complicated (by design) that the common man couldn't realistically be expected to understand it all.
Why dont we just make it so any loans can be paid off by the children and grandchildren as well.
Then you can have generational enslavement to the banks
Anything less than a 200 year mortgage is antisemitic
Loans in general are bullshit, particularly when done outside of a business context.
If people can't afford homes because they don't have X hundred thousand dollars in the bank then homes shouldn't cost X hundred thousand dollars due to market forces. Also only individuals should be able to purchase homes and apartment complexes should be abolished as a concept.
Along with this is the whole "credit" system. Which is basically just a more elaborate loan system.
I've been in debt my entire adult life, from college loans to car payments to mortgages. I want to pay off my home so I can finally be out of debt; but everyone tells me "But you should use it to lower your taxable income through the mortgage interest deduction." In other words, the government is incentivizing me to stay in debt. Oh, and even when I do pay it off, it's not actually paid off because I have property taxes for the rest of my life.
The entire world economy is built on debt and usury. It's bullshit. All of it. And the only solution is a total reboot, and there's no way the rich will let that happen.
Property tax is just rent to the government in a reimagining of feudalistic societies.
So many finance guys freak out at me when I told them I paid down my mortgage in 10 years. They're basically telling everyone to take out a loan so you can put into a 401k. Asinine.
Realize that as soon as a bank makes a loan they sell it to a larger bank. 50 year mortgages will triple the selling price of mortgage backed securities. All the big investment companies will get massively richer from this. That's why they tell you never pay off your mortgage. Since so much fake wealth is generated by cycling the loans, if everyone paid their debts the system would collapse.
It has been since forever.
https://www.irs.gov/publications/p936
Only the interest paid on a mortgage is tax deductible. The principle paid is not deductible.
People that pay it down aggressively may not benefit at all from this deduction. Because they will progressively pay less and less interest over the years. There is a pretty high standard deduction already. Without other itemized deductions, many which have been removed since TCJA, it probably won't move the needle on tax bracket or taxes owed.
It might benefit very few like a high income single taxpayer that itemize beyond the standard deduction, and then only for a few years of the life of that mortgage.
Why would it be? You're buying an actual asset that you can later sell. Otherwise you assume it'd be like a 401k. You can put the money in tax free but when you later sell the house and claim a profit you may have additional taxes to pay at that time.
Which is how the current system works, not an agreement with it, there just shouldn't be income taxes.
I never said that it should be. You replied to the grandparent that it is deductible. The grandparent said that a mortgage should be tax deductible. Neither you or the grandparent specified what portion should be or is tax deductible.
All I am saying is the portion of mortgage, that is tax deductible, is not a net tax benefit to most people.
huh? You literally don't pay taxes on a portion of your income. There is no "net." It's just a benefit. It's really easy to claim.
I understand how tax credits and deductions work. A tax deduction only reduces taxable income. If one doesn't have itemized tax deductions exceeding the standard deduction then a relatively small deduction, on its own, has zero net benefit to the taxpayer.
One can take a deduction from their taxable income and it not matter in the total amount of tax owed.
Actually, banning all personal loans included my for purchasing houses isn't not a bad idea.
Commercial loans are different because they're used to increase one's income because personal loans don't.
It's called 'compound interest'. A dirty trick by the four bankers William Patterson, Nathan Rothschild, J.P. Morgan and Paul Volcker.
Why not bolster the value of money so it doesn't take half your life to buy a decent home?
The mortgage and housing industry is just a big grift anyway. If we look at a $400k house purchase, as typical two real estate agents make $12k each, a mortgage broker or the bank or both make $4-12k ish. A title company makes $2k, an appraiser makes $500. Then there's another $2k of other random fees going to someone. That's all before the government gets their cut or a dime of interest is paid. Then a lot of people will have a PMI payment so they get their cut too. There's too many people that have their hands in the pot, and a lot of them don't need to get paid a percentage either. They do the same work for $200k vs $400k vs $800k but get a percentage?
Then you look at this stupid thought of extending mortgages. Just for shits and grins I ran some numbers. This is for a $400k loan at 6.5% Payments are: 15-year - $3484 30-year - $2528 50-year - $2254 100-year - $2169
Of course they want longer mortgages. I think the average life of a mortgage is less than ten years. What does that mean for the bankers? Well let's assume you have each of these and pay 10 years. You will have paid this much in interest 15-year - $196k 30-year - $242k 50-year - $255k 100-year - $259k
Oh look they make more? So when you buy a house, live it in ten years and sell it, if you assume a typical profit over that time, the bankers still get their money AND more of yours. If you're talking like this as 50 versus 100, all for a difference of less than $100 a month.
Want to fix the housing industry? Fix all the process of buying and cut the grifters.
Real Estate agents exist because everyday people, and the banks don’t want to spend the time advertising and shilling the property, so they hire people to do that for them, so that’s actually reasonable. It’s the same reason why most people will trade a car into a dealership instead of trying to sell a used car themselves; the “lost money” isn’t worth as much as the time saved not having to hassle over values.
An appraiser values the house, who also exists for similar reasons as to real estate agents.
The rest I don’t know because I’m not as tuned into the housing market as I am cars, but real estate agents and appraisers have actual purposes existing.
Yeah I wouldn't argue either of those don't have a purpose. I don't really see why their compensation needs to be tied to the price. It's a conflict of interest for the buyer for one.
Many of the things in the process have a purpose, it's just overly drawn out and ridiculous. A LOT of money is made on the front end of a mortgage, after which it's sold off to investors and no longer even a risk for the bank.
That, and filter out the window shoppers wasting your time. If an agent is talking to another agent, there's a good chance the buyer is already pre-approved for a loan and serious about buying.
Why don't we kill all central bankers and shut down all central banks so we don't need to do retarded usurous shit like "Mortgages" in the first place?
30 year mortgages are STILL BAD, they're just the "reasonable" option we've been fed for decades.
Infinity-year mortgage. I'll just pay a penny every year and call it good.
Our entire banking system is premised on the ability to siphon away wealth and bolster elites while creating as little real value as possible.
If you're a large institution, then you have the ability to take out a loan to buy up hundreds of family properties, and if it all comes crashing down because you're an idiot then the Fed will step in with relief cash or allow 401ks to invest in private equity or just invade Venezuela for you.
It's really making me sick.
a 30 year wasnt good, but it was acceptable when rates were below 3%. with rates around 6%, because mortgage interest is front loaded into loan repayment amortization schedules, you end up paying ~125% of the loan amount in interest alone on a 30 year.
Realistically what would the difference in payment even be if you changed a 30 year mortgage to 50? Probably almost the same.
Basically nothing. The difference between the 30 and 50 is small enough that if it is making the difference for you between owning and not, then you are living too close to the edge of your means for it to matter anyway.
But, as someone who recently bought a home, it will absolutely work in practice. People are completely obsessed with "lower monthly payments" to the eclipse of all else, including paying way more in every other way, and everyone involved in the process of buying a home will put it in front of you. I've watched people refinance for barely 100$ difference.
Inflation has destroyed the value of their paycheck which has not substantially increased even though profits have. So, yea, of course they are.
And that's why the parable of "still having wet feet" is important. Because people will kneecap themselves for short term lower pay while setting themselves up for a terrible long term. Heck, that's how a lot of "first time" or even "Vet" home loans screw people. The basically 0 down they lure people in with seems appealing and then saddles them with a higher payment anyway.
Again, if the difference is what makes or breaks you then you are living too close to the edge for you to be getting into this to begin with. And that does preclude way too many Americans from home ownership, which is the bigger problem. But they still need to be responsible enough to not screw themselves along the way.
I get the obsession with lower monthly payment, because for buying your first house you're comparing to renting. Even a 50 year mortgage is a step up from that. Nobody can kick you out of the house or change the price, and you're building a little equity... But even considering that, I don't get how a 50 year mortgage would be worth it. Who wouldn't pay an extra 100 a month to cut the term by 20 years?
The same people who aren't paying an extra 100~ a month right now to cut 3-7 off their 30 year mortgage. Or cutting their car loan in half by doing so, and so on.
Like, I get the problem. Money is tight all around and the barest minimum is all a lot of people can manage while still "owning" something. But many of them are flying too close to the sun to do so, and are just kicking their own can down the road by accepting short sighted deals.
Yet people want to own, and they are completely in the right to want it. And seeing 2200 instead of 2400 could seem like a hugely deciding factor for someone who has a monthly take home of 3000$ even if it costs them 200k more in interest. Heck they could even convince themselves it means their kids will benefit because it'll only be 10 years on a low mortgage for them! It'll be easy to talk people in to, even if its only going to screw them.
Edit : only 3% less according to this poster :
https://x.com/vladtheinflator/status/1987412782418153813
Which is a more secure environment in which to raise a family: a house with a mortgage, or a rented house or apartment? Allowing young working adults to put down roots is good for society.
Sorry, I just realized the original poster was Andrew Yang. The original “everything should be free” guy. Never mind 🤣
Well, I live in a house so I don’t have to live in a 70 unit apartment building with a thousand section eight welfare recipients spitting out Spanish speaking only degenerate children, playing cha cha music all night and rifling through my apartment when I leave to go to work so I can pay for their EBT and subsidize housing. I’ll never pay it off and I don’t care. I’ll sell it before it’s ever payed for. It’s a no brainer.
What happens when the government builds a few 70 unit Section 8 apartments in your neighborhood and you go underwater on your mortgage because nobody wants to live there anymore?
"not going to happen to me" can you see the future 50 years ahead?
I’m also gonna go out on a limb here and say most people commenting on the original post don’t own a home and probably never did. There’s lots of advantages to owning.
Honestly in the current housing market as it exists, this is a good symptom of how fucked it all is.
Ignoring all the generational debt and absurd prices, something everyone already has spoken about at length, most people don't make it to the end of their mortgage anyway. So the 30 or 50 is meaningless to the common person, one is just a smaller number than the other and they'll be selling in about a decade anyway.
Why is that such a common thing to sell when you are 1/3 to almost halfway done with your mortgage, just to restart it way later in life guaranteeing you cannot have it paid before possible retirement? I think the answer to that is much more important to "fixing" this than people give credit for.
30 vs. 50 is definitely meaningful to the common person because you build about 15% equity after 10 years with a 30y vs. almost nothing with a 50y.
If your argument is that the common person is too dumb to care about this, then yeah you could say it's not meaningful. But the only way this doesn't kneecap them financially is if housing prices keep appreciating like a rocket forever. When that ends, the line to pay the piper will be LONG.
You're right, I hadn't even considered the equity angle. That does make it considerably worse.
But yes I do think most people are too dumb to think about this, though not because of their own retardation but because it has gotten so complicated (by design) that the common man couldn't realistically be expected to understand it all.