Arcadia Chamber of Commerce - The Connection to the Business Community

50-Year Mortgage Idea Falls Flat – Information from Prestige Capital

Bill Pulte, the current Federal Housing Finance Agency director, floated the idea of introducing a 50-year fixed-rate mortgage last week on social media. However, that may not be a viable solution to affordable housing.

This might be a case where the “cons” outweigh the “pros.” While payments spread out over 50 years may offer a slightly lower monthly cost, the amount of interest paid over this extended period would be exorbitant. A homeowner with a 50-year loan would not begin to build equity until the 40th year of making payments. So, this rather defeats the idea of building wealth through equity.

Additionally, the Dodd-Frank Wall Street Reform and Consumer Protection Act does not permit the government to create a 40- or 50-year mortgage. Changes to this bill would have to go through a legislative process and be approved by Congress. That being said, it’s unlikely this idea will take shape any time soon.

My team and I recognize that every homebuyer has a unique financial situation and individual goals. That’s why we take a very personalized approach to every loan we process. We work to help our clients conquer obstacles and achieve their dream of homeownership!

Please feel free to share my contact information with anyone who needs a mortgage professional that takes a truly consultative approach. Our goal is to help people in our community reach their goals!

Best regards,