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.
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.