Episode 160: 50-Year Mortgages... Will They Save Housing? (The Truth No One’s Saying)

Everyone’s talking about Trump’s floated idea of 50-year (and even 100-year) mortgages, but do longer loan terms actually solve the affordability problem? In this episode, we break down the math, the psychology, and the reality behind why housing feels unaffordable… and what’s truly driving the crisis.

Inside the episode:
 • The emotional vs mathematical side of affordability
 • Hidden ownership costs skyrocketing beyond rates & prices
 • Why stretching to a 50-year mortgage barely changes your payment
 • How to get into a home strategically
 • The #1 reason most buyers still feel stuck
 • Tactical strategies: subsidy accounts, co-investing, house hacking & more

If you want real strategies (not headlines) to make homeownership work in 2025, this episode is for you.

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Clear, strategic conversations on mortgages, real estate, and home financing — designed to help you make confident, informed decisions without the hype.

Hosted by Loans Elevated, presented by The Lassig Team at CrossCountry Mortgage.

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Hosts:
Broch Lassig - Branch Manager | NMLS 340314  
TJ Heidenreich - Sales Manager | NMLS 1802412  
Ryan King - Loan Officer | NMLS 1870771  
Branch NMLS 2048956

Equal Housing Opportunity.
All loans subject to underwriting approval. Certain restrictions may apply.

CrossCountry Mortgage, LLC | NMLS 3029  
www.nmlsconsumeraccess.org

This podcast is for educational purposes only and does not constitute financial, legal, or tax advice. Consult a qualified professional regarding your individual situation.

Transcript

So today, we're bringing, uh, a very hot and contentious topic to the forefront, uh, which is this idea that Trump floated out, which is a 50-year and- Mm-hmm.apparently, in some ways, even a 100-year mortgage.I, I don't know that I heard that one directly, but it's been floating around- Yeah.as one of the options, 50 and 100-year mortgage.So I wanna go into, like, does this actually solve what it is, uh, at least, um, presented to solve, which is an affordability crisis in housing?Does it solve that?And if it does, how?And if it doesn't, what gives?Like, how do we, how, how is it solvable?What solutions could, yeah, could there be?Yeah.So I'm excited to talk about it 'cause, um, I certainly have some personal opinions on it.I'm sure you'll share some, uh, personal opinions as well.Yeah.Uh, but then I pulled up some really good stats.So, uh, we're excited for this episode.We would love comments, um, to let us know what your thoughts are at the end of it.But here we go.So here we are.Housing affordability is a "crisis".One of my personal opinions is this crisis, I, I do agree, it isThere's no question at all that housing is less affordable than it was in the COVID era.Yeah.Um, but I feel like, similar to one of the most recent, uh, episodes you did with TJ about foreclosures and things- Yeah.I think it was just last episode.Similar to that episode, I feel like some of this, some of the data points are cherry-picked- Yeah.to essentially support this argument that housing is unaffordable, and it's an infectious idea that may not be totally true.But it spurred the president, President Trump, to float a 50-year mortgage, and there's some obvious issues there.Uh, the first thing, and there's, there's really no order.I just tried to get my thoughts here, uh, and then we'll just kinda dive into it.But let's just go into what I think is the, the more real problem about housing affordability first, which is, it's not just the fact that mortgage rates went up and home prices have gone up.Mortgage rates, as we've seen, allYou look at these stats, historically, we're kinda just like right in the middle ground- Yeah.of where mortgage rates have always been.So it's more of like a feeling of loss from the super low rates.That, it's more of an emotional reaction- Definitely.not an actual mathematical reaction.It's still the COVID hangover.Right, exactly.Yeah.People are still obsessed.Now that's fading.Home prices obviously spiked.Those are 2 real things that are for sure.I'm not saying they're not making housing more expensive.They are.But appreciation just kind of goes in their spurts where it's very significant and, and arrows when it's a little lower.On the grand scheme of things, it's about 5 percent every year.Mm-hmm.We're continuing that trend on a long-term basis.That trend is, is and has continued basically for forever.Uh, rates are at historic norms.People do talk about the idea of housing as an expense to total income or house prices as, as an expense to total income.And I think I'll just start here, which is, that is not a cause of mortgage rates or a cause of home prices.That, in my opinion, is a cause of home buyer expectations and demands from a generational basis.I feel like the younger home buyers are like, "Well, no, I need the 3car garage.I need the badass house.I need the finished basement for whatever reason, even though it's just my wife and myself."Yeah.And, you know, you've got these types of housing arrangements where it's overkill and the expectations are unreasonable.What do you think about that?I meanYeah, I think there is a role that consumers in place today that really stems from social media.I mean- Yes.FOMO.Exactly.Comparison.It's always been there.The keeping up with the Joneses has always been a thing, right?Right.Even from the fifties.But it's even more infectious today- Yeah.because it can spread so quickly.And so, you really wonder how much of it is a psychological issue.And I'm not, I'm not saying you shouldn't be able to have your cake and eat it too.I think that's the beauty of a free market and, and- And America.participating in capitalism, you know?Yeah.Um- United States.but it's not an entitlement, right?And I think that is something that we're struggling with.And it, I do really think it stems a lot from social media and the culture today.Um- For sure.You know, you, you think about, like a lot of people like to make the comparison of like, my grandparents or my parents were able to afford their life with just one income, but what we also don't realize, um, is there was noThere was not a lot of extra.There wasn't like the buying the new, brand new $200 shoes.There wasn't going on the extravagant vacations and all the other stuff that we've been sat in- Or driving the badass car, and you have a couple of them.The brand new car, right.And then you have the Razor and you have the 5th wheel and you have all this other stuff.And then you gotta go out to eat at the cool restaurant because you're gonna see your friends and colleagues there and like, I agree, it's a social, it's a social expectation epidemic that we're living in.Yeah, yeah.That is more responsible than any one thing, in my opinion, for this "housing crisis."Like let's get real.Go buy a freaking townhouse.And yeah, you might have to cram kids in bedrooms, or it may not be the perfect house, or you might have to- Right.skimp on date night and it might have to be a little cheaper or whatever, but like- I think pretending that it would never come without any sacrifices where a lot of people are wrong.And it's not even pretending.It's demanding that I need my house and there's no way I'm gonna let go of my shopping spree, and there's no way I'm gonna let go of the- Yeah, yeah.good restaurant and the vacation, like you're saying.Like- Right.I think that is the oneculprit.The, the- Mm-hmm.If you had to name one thing that's the most severe culprit of this, quote-unquote, housing crisis.Like if it's a priority, make it happen.Yeah.And I'llAndYeah, exactly.And a lot of people will say, "Well if you, if you bought your first house prior to COVID, you just got lucky with timing."Like I think of my scenario, to be specific.Like I wasWe rented for a very short amount of time, my wife and I.And IThe 4 or 5 months that we were renting, we knew we wanted to buy a house.And so we had it on our radar, we were always keeping an eye on things.And I mean, my mother-in-law's in the business, so it did help having someone who could kind of give us some pointers.Mm-hmm.But I was also in finance.I worked at a bank, and so I understood it.And I was onlyI think I was making like 14 bucks an hour or something like that at the bank, maybe some commissions.It's not really likeWe were not making a lot of income.Yeah.But we had saved up just enough for a 3% down payment over like just under a year's worth of time.We were good savers.I mean, we always kind of had that within us.So that helped us a ton, but it, itI sacrificed on a lot.Like I didn't, I didn't buy a whole lot of clothes.Like I wasI remember even just for work, at the bank, like if I needed new, um, work attire, I would go to Kohl's and I would buy like the cheap stuff on sale.Like we're talking like turtlenecks that were like 10 bucks and- Right.wear those, right?Yep.Or H&M, and buy 'em on sale.Mm-hmm.And we sacrificed for long period of time.Mm-hmm.When likeDuring that timeframe, a lot of people were out partying, going to bars, like doing those types of things- Yep.spending the money, which is fine.I'm not, like- Buying the cool cars.Whatever.Like do that if that's what you want to do, but you're gonna pay a repercussion at some point.And the sacrificeYou can't go without sacrifice.At some point- And my opinion is this-we don't need to have a social courtesy of saying, "You know, do whatever you want."We're talking about the reality of affordability of housing.Yeah.Yeah.You have to take some personal responsibility, as- I agree.as anything in life.Like the rubber meets the road somewhere, and the rubber meets the road for everything.When it's all said and done and you distill it all the way down- Right.you are responsible.Mm-hmm.And you have to make those choices, right?Well, and I had to rent out my basement too.I bought a house that I knew I could rent out the basement, because I needed it to feel comfortable.Yep, yep.While it was short-lived, I mean, itLike that was the only way I was gonna do it.So again, another sacrifice.We didn't even have the house to ourselves for the first year.Yep.And same goes with me.I had a very similar experience.M- uh, Katie and I rented for a year.Mm-hmm.And we signed that lease.And the realtor, he's like talking about renewal options and I was just like, "It doesn't matter, dude.We're buying a house by the end of this."And- Yeah.we were just bound and determined.Right.But again, we didn't go shopping.We didn't do basically anything.We were chilling at home.Ramen, hot dogs- 100%.and chicken.Yeah.It was likeDude, legit, we would sit andAnd granted, these were different times.This was, this was, uhGosh, w- how long ago was this?Like 15, 16 years ago.Yeah.So it was different times.But we would set a budget of 500 per month collectively- Mm-hmm.for both of us, that included fuel, groceries, entertainment, date night.That included everything.500 bucks a month.Like we wereIt'sI'm just like, "How the hell did I do it?"To be honest with you.Yeah, I know.I don't like I don't get it, but it was a priority.And same with you.Yeah.My brother rented a room- Yeah.and he rented a room from us for 4 years.We didn't have a house to ourselves as newlyweds and a couple in our first home for 4 years because like, it was important.But what happened?That house went up in value.I was able to cash out- Yeah.buy another house.That house doubled in value.Mm-hmm.And this was all before COVID, so these were in regular markets.Yeah.And I made hundreds of thousands of dollars owning real estate by virtue of sacrifices, short-term sacrifices.Yeah.And now, real estate is a very meaningful portion of my net worth and my future retirement plans.Frankly, it is like the foundation- Mm-hmm.it.And so- Yeah.um, anyway, that's just kind of like a personal bone that I wanted to pick.Um, and so moving on from that, something a little more tactical here.Beyond rates, beyond home prices going up, I was thinking, "Okay, what else has happened?"We've seen this in our industry.So these are real issues.There is some personal accountability that needs to take place, but there are real issues.On top of home prices and rates, insurance premiums have gone up between 30 to 100%, or in some cases, dramatically more than that on an annualized basis.We've seen it.Just in the past couple of years- Yeah.Oh, yeah.We don't quote less than $125 a month now.Yeah.Like, we're 150% higher here in Salt Lake.Which is crazy.And there was such a lag there in insurance that I feel like it really- Yeah, just like boom.was like a dagger.Just at the worst time.'Cause it was like a Mike Tyson hook.Prices and everything.Yeah, everything had gone up and everyone felt the pain, but then it's like, oh, we forgot about insurance and it needs to catch up 'cause it's from an annual basis.And as they're getting these claims and they, and they're like having to bail people out of these higher priced cars or assets or whatever, they're having to jack their premiums up.So yeah, it's been, it's been a nightmare.So then property taxes, same thing.Yeah.Those have gone up byI mean, you gotta think, it was v- very common that a s- a starter home, max, was like 200 bucks a month in taxes.Yeah.Now, we're at least 250, probably 3 grand a year.Mm-hmm.Yeah.So that's gone up like 50 bucks a month.Insurance has gone up 75 a month.So now we're talking 125 bucks a month just in fixed costs.Yeah, and we're lucky here in Utah it's non-disclosure.Otherwise it would beCould be dramatically more.Yeah.Yeah, for sure.We should talk about that.HOA dues, up dramatically.Mm-hmm.Yep.Like my personal HOA duesI live in a community with only 7 houses, but we have to pay for snow removal on our, on our site- Yeah.and landscaping.But it's very, very minimal.Almost nothing.Mm-hmm.But just because snow removal and the cost to pay contractors to do work has gone up, my HOA has gone up $125 a month in 3 years.Yeah.That's double, dude.No one's gonna eat the bill.It's gonna get passed on somehow, some way.Somewhere.And like, so HOA dues going up, but that's because labor for the people that do the services within your community- Mm-hmm.that's all more expensive.The materials for evenJust imagine, like landscaping materials, all that stuff, it's all gone up and s- that, that cost has to beThere's a burden on somebody somewhere.So that's gone up.That's not being addressed with this idea of a 50 or 100 year mortgage, because it's only changing the amortization.And we'll talk more about that.But utilities and energy costs, those are up dramatically.Mm-hmm.Like 30 to 70%.Way, way up.Yeah.Maintenance on houses, way up.Like, I, weOur, uhKatie and I, our freaking, um, fireplace won't light.We're thinking that there's like an issue with the flame sensor or something, 'cause the pilot light lights and then it just goes out and won't, it won't actually light.We had to pay them to come check it out, 175 bucks, just to come see it.I'm like, "Okay.Well, I'm not gonna screw it up, you know."SoYeah.Oh, it is crazy.And that stuff is always theIt always comes at the worst time too.I swear.For sure.know.Like right before the holidays it's like- Yeah.yeah, okay, I guess I'll write a $175 check to use my fireplace that I paid for.Right.Yeah.It's crazy.So anyway, these are some compounding pressures on top of the obvious- Yeah.ones that people like to talk about, um, that are significant.So we're talking 125 bucks a month HOA dues if you live in an HOA.I mean, let's say that's gone up 50 bucks a month, so 175 a month.Utilities probably f- gone up 50 to maybe more than that a month, so 225.So we're probably talking, in fixed cost, on the standard just entry-level home in Utah, an increase of 300 per month in actual just like ownership costs.Mm-hmm.Yeah.From just maybe 5 years ago?Mm-hmm.You know, probably over that time period.So, um, there are real hurdles.So it's like, what gives?Is the 50 year or 100 year mortgage a solution?And so I ran the math, because I love running numbers.So compared to a 30 year, a 50 year mortgage, this is assuming that you get the same rate on a 50 year that you would get on a 30 year.Which odds are you won't.Odds are you won't.And this is assuming that mortgage insurance is the same cost on a 50 year versus a 30 year.Again, probably not the case.Mm-mm.Assuming everything stays equal except you just go from 30 to 50 years, you save 300 bucks a month on the average Utah house.If you stretch that to 100 years, how much do you think you save?Compared to a 50 year.So you save from- I mean, it's-30 year to a 50 year, you save 300 bucks a month on the average Utah home.Going from a 50 year to 100 year, how much extra do you think you save?Maybe another 300 bucks.$100 a month.Damn.I would've expected way more.It's because of the amortization.Yeah, yeah, just- You're just-front load theYou're just paying interest, interest, interest.Yeah.I mean, it's practically an interest only loan.Yep.So, um, anyway, I was like, wow.So 20 more years of payment to only save 300 bucks a month.That's crazy.And the interest is dramatically more expensive.Now, you and I have some opinions on that.We can dive into that later.But it's not, it's not a meaningful savings.Now, the 50 year, you know, ironically, wipes out those other ownership costs that have gone up around 300 bucks a month.Which that was, that was not even intentional.Uh, that just kinda hit me as I was talking.Mm-hmm.So it kind of wipes those expenses out, which is, which is a value add, I guess.Oh, yeah.I mean, 300 bucks a month is notIt's significant.I mean that, that is significant.Yeah, for sure.Right.For sure.But to go out 20 years, it's like, does it actually solve the problem?And so let's talk about that.The reality, okay?That's best, best, best case scenario.Well, and 300 bucks, like most people who are running into issues today'snot, not that they can't qualify.But people who have an issue buying, their off-payment's like 600 plus, right?Double th- those interest rates.And again, that's partly psychological, which we should talk about.No, it, it is.Yes, yes, yes, they qualify for it.But- Right.they're wanting a payment that's- They don't want to spend that much.Exactly.Which is a dangerous slippery slope.We should pin that for a minute.Let's go over that.But I wanna talk about the reality of a 50-year or 100-year mortgage.Yeah.'Cause best-case scenario is you're saving a few hundred bucks a month.The reality is, 30-year loans are somewhere between a half a point and a full point higher than a 15-year loan.So, you go from 15 to 30, 15 extra years, you're paying a half point to a point.Why?Because the risk is greater for the investor funding these mortgages to give you- Yeah.30 more years to pay.There's more risk of the property going underwater, because you're not amortizing the balance down as quickly.Yeah.So there's a realThere is a justified increase in the rates, because the risk is greater for the source of the money.If you have more risk, you get better return.That's just the reality.So, a 50-year mortgage, you can expect it's gonna go up somewhere between a half to a point.100-year mortgage, I think, is just, like, asinine and completely out of the question.Right.So, a 50-year mortgage seems somewhat, uh, I guess, a cons- a realistic consideration on the surface.Mm-hmm.But if you go up a half a point to a point, the higher rate by a half a point erases the savings.There's no savings.Yeah.None.Yeah, that doesn't surprise me.You go up a full point, the payment's actually more than a 30-year.Right.And we're seeing the same thing on 40-year mortgages right now.Those have been a- around for 5 to ten years, maybe?But rates are- They're higher.Yeah, and they put the payment nearly sixes.30-year- It's basically a 30-year payment, so it's like, "Okay, yeah, sure.Let me pay some more interest."Makes you feel good.Like, silly, right?So it's a cool, novel, interesting idea on the surface.It's like, "Man, this might be the solution."Um, I would just say it's not.It's like- Well, and like, maybe, maybe the way that an investor can overcome increasing the rate to make up for the risk is they require higher down payments.But even then, we've, we've discussed, like, that, that's- That's a bigger barrier.It's counterintuitive.Yes.Yes.Because now you're saying you have to come in with more cash, more skin in the game to eliminate the rate adjustment for stretching out the term longer.Yep.I mean, most people don't have the cash to cover that difference.And number 2, oftentimes it doesn't even make sense to dump it into the house.YouIf it's from a perspective of wanting to be in a better place financially, you're better off keeping the cash.If, if you're thoughtful, if you're strategic, if you're not- Yeah.falling into this trap of what the media tells you and what your well-meaning family and friends tell you, who don't know anything about, most of the time, don't know anything about finance, and- Yeah.you know, like, they're making emotional, illogical decisions, uh, or giving emotional, illogical advice based on- Mm-hmm.their experience.And so, uh, the other thing is, which I mentioned earlier, is PMI would almost certainly go higher, 'cause like 15-year to a 30-year, PMI is like s- 50 to 100% higher.It's dramatically more.So, a 50-year mortgage, in all reality, is probably gonna be higher than a 30-year mortgage.Right.So now it's like, "Okay, um, what gives, and how do we solve for the affordability issue?"Because we've pointed out there are real issues.It's really, truly more expensive to buy a house right now, and- Yeah.a lot more expensive.And the barrier might feel insurmountable to, uh, to home buyers, especially first-time- Yeah.home buyers that are not in the game.So I wanna go over some of that stuff, but a, a quick little note is there are legal issues with this idea of a 50-year mortgage.Uh, that's because there i- is a qualified mortgage law in effect, and the qualified mortgage law restricts any mortgage over 30 years.It's no longer a qualified mortgage.What does that mean?That means that the bank issuing that loan that's greater than a 30-year loan has significantly more risk, because there are not, um- There's no government backing.There's noExactly, you don't have backing.It's 100% on them, and they- Yeah.could be penalized.Th- the law actually causes them to be penalized.They have exposure for up to like 10 years where they would have to write consumers checks for all the interest they pay if they make a one little minor, y- like- Right.administrative mistake.So it's very risky.So you would have to, 1, enable them to withstand the added risk of the extended prepayment and the risk of their assets.The home that you own is the asset backing the money they're giving you.Mm-hmm.If that goes underwater, well, the bank doesn't want to give you money, obviously.You wouldn't want to give somebody money if you knew that, you know, the, uh, i- if, if they wanted, if they gave you a Snickers bar for collateral and they wanted 20 bucks it's like, "Well, no, this Snickers bar is, like, 99 cents."Or whatever it is.Like, I'm not gonna do that, you know?So that's kind of the, the logic here but, um, you would also have to change the laws.Like, you would actually f- have to go change the laws and we are coming off of, um, I believe the government is still shut down.I- it seems like it's going to open up soon?Maybe.Hopefully.Yeah.But we're going on, like, 40 some odd days of the government shutdown.Yep.And they haven't been able to pass that even though there are families literally going hungry because they're not receiving a paycheck.They're not gonna be able to agree on a f- passing a, a law to change to 50-year mortgages, especially when this doesn't make sense, so- Right.I think it's complete fallacy.It's a, uh, I don't know what it is, maybe it's a marketing scheme.Trump's a great marketer.Yeah.I don't know what it is.It's a Trump tweet, man.Yeah, for sure.So, um- Shower thoughts.Yes, right.So now it's like, what is the solution?How do you get in the game?Because the reality is, if you don't get in the game you're just gonna keep getting your ass kicked- Yeah.year after year after year after year.I just met with a buddy, he's helping me with a project in my house.He's like, he's in real estate too.Mm-hmm.Has been for f- like, almost as long as I have.Probably a decade at least, I would say, he's been in it.He hasn't bought a house and it's because it's like, "Man, I don't know, I just don't have the taxable income, I can't afford the house I want," da da da da da da.There's all these ruminating issues.This is pre-COVID, this is during COVID, this is post-COVID.You have record, like, just super low home prices and maximum affordability in Utah over this span and then now you go through the lowest rates ever in history through this span and you come to this where we're really in an unaffordable, we're in the least affordable, era of Utah homeownership than ever before.Yeah.And he still hasn't bought, but guess what?He's buying right now.Why?Because he's like, "Dude, I've gone 10 years and I kicked the can, and I kicked the can, and I kicked the can-" And it doesn't get better." and all my buddies have bought and guess what?They've got hundreds of thousands of dollars."Yeah.What the hell did he do?Like, he just screwed himself.Or maybe they already upgraded once or twice.For sure, but they still have hundreds of thousands of dollars in, in equity- Hmm.or cash if they sold it.Yeah, right.You know what I'm saying?So it's like you've got to get in the game, so how do we do it?Obviously, like, shed the ego a little bit.Just buy some fricking real estate because the home, the actual home you buy doesn't, it does determine the, the price of the home.It doesn't determine really how much you make in profit because it's location, location, location.That's the coin phrase of real estate has been forever.Yep.Land is what goes up in value.The building actually goes down in value- Yeah.because there are costs.Right.It is a depreciating asset.You get tax benefits on an investment property because it's depreciating.Hmm.It's becoming worth less every single day, so it's the land- Yeah, damages, all sort, right.Exactly, so you just got to buy something, get in the game so I'm like all right, buy something smaller, buy a fixer-upper, uh, buy something further out.Be willing to sacrifice the, uh, commute or frankly, in this day and age, like, almost everyone has the ability to work remotely at least- Mm-hmm.partway.Part, yeah, partial throughout the week.So it's like go, you know, get, add 30 minutes to your commute, you'll get some property and you will make money.Yeah.Yeah, for sure.Other ideas?Co-invest with a friend or family member, um, you know, if you've got somebody who's capable, a family member let's say.They can help invest capital into this deal for you to, uh, do a multitude of things;fund a down payment, but also fund extra cash to subsidize monthly payments, um, they can help buy down interest rates which, you know, ironically if you buy down your rate by a point on the average Utah home, by 1%, you'll save about 300 bucks a month.Yeah.Equivalent to that 50-year mortgage but now you're on a 30-year mortgage and that's a permanent savings and you're paying, you're, you're getting more and more equity because you're on that term and the rate's lower.That you can get from a seller on basically every deal- Mm-hmm.right now in Utah.1%.So, but, um, the other thing that we, we mentioned, drive a cheaper car, make the sacrifice.Yeah.Sell the flippin' car, you know, like get rid of the lease.You don't need the fricking Mercedes-Benz, like, go- 800 Plus a month, yeah.Right.It's like, it's crazy.Just go pay cash- Yeah.for a damn junker, who cares?Get from point A to point B, keep your family safe or you safe.Skip the vacations or, or just reduce the vacations.It's like, do you need to go to Hawaii?No.You could, um, you know, go get an Airbnb up in Heber for a couple of nights- Yeah.for cheap, couple hundred bucks, not a couple thousand to go on a vacation.Um, cut non-essentials.Do you need the subscription?I know that a lot of people are like, "The coffee is not gonna make a difference, the subscriptions"It's like, but it is, 20- Yeah.30, 50 bucks a month, well- If you add it all up.Yeah, if you choo- choose to cut out one little thing, it may not make that big of a difference.But they compound.Right.And here's the thing with, with housing specifically, that is the true source for the most, it's the, it's the most certain path to wealth for virtually every uni- United States of America family.Right.50 bucks a month, if you can just eliminate those expenses, which I'll bet you every person listening could eliminate 100 to 200 bucks a month in expenses.I agree.Arbitrary expenses.50 bucks a month allows you to afford approximately an extra $10,000 in a house.Mm-hmm.So, 200 bucks a month, you now can afford an extra $40,000 in a house.Right.That changes the dynamic quite a bit.Mm-hmm.Probably makes the commute a little less, gets you a little nicer home.There's a lot of things that it does.So, um, those are some ideas that I'm like, "Okay, that's really how it is."But then, creative strategies, which I'll just put a quick little plug here.You can go to loanselevated.com.Find in our resources, we have the Holistic Mortgage Planning ebook.This goes into depth of every strategy we work with all of our clients on, and it tells you step-by-step exactly how to accomplish a lot of these things despite high rates, despite high home prices.One of the things we talk about a lot in that book, a- and- and that we guide our clients on, is this idea of payment subsidy.I mentioned it earlier with the co-investment or the joint venture idea.If you've got 5% down on a $500,000 house, you've saved up 25 grand.Well, as a first-time homebuyer, you couldI mean, honestly, you could do 0% down pretty easily.Yeah.But let's just say you do 3% down.You carve off the 2%, and psychologically, most people are like, "Well, no, you know, that's less money down, and the payment goes up.And- and I just want more equity, and la-la-la."Mm-hmm.You start to freak out about it, and that's because we've been programmed by a bunch of naysaying, uh, imbeciles really, in my opinion.Yeah.That's like, it's like, you're not thinking about it.Mm-hmm.Like, you're losing way more than you could ever gain.So, anyway, instead of 25 grand down, you do 15 grand down.You put 10 grand on the sidelines.That 10 grand, again, I just went over this, is gonna increase your payment 50, maybe 60 bucks a month.Yep.So, if we, if we look at that 10 grand, it's gonna cost you 50, 60 bucks a month.But now you have $10,000.Well, $10,000 over 36 months could subsidize your monthly mortgage payment by $280 a month.Mm-hmm.So, you just put that 10 grand in a money market account, and you pay yourself a little dividend of 280 bucks a month.Now that mortgage, instead of saving 60 by putting that extra money down, you've now wiped out 220 net in affordability on that.And then cut out some expenses, and all these other ideas.But this idea of payment subsidy is very significant tool you can use to leverage accessibility into a un-affordable housing market.Yeah.And it gets you in the game.And then you spend a couple, 2 to 5 years, and you cash out and you have probably 6 figures, at least high, 5 figures in equity.And you just rinse and repeat, but at a grander scale.And so you just gotta push the time horizon out, really, and be thoughtful about how to do it.Yeah, and I think, uh, an objection will get there sometimes is like, because we, we say that that gives you flexibility, eh, in the short term, but also gives you time to see an increase in wage, or- Right.pay down the principal amount and refinance, and- and refinance when rates come down.Everyone's like, "Well, what if all that doesn't happen?"Of course, there's always a, there's always a chance there.But the fact is like, if you're playing in the capitalistic game that is the US economy, odds are you're going to rise as the economy rises.That's just how it works.Well, the reality is, is it's always happened.Yes.Always.Yeah.Like, next month you don't get a raise, but in a few years.Right.You know, and then the other thing is that you can be thoughtful about it, and this gets you in the game.So, you- Mm-hmm.Psycholo- psychologically, you're thinking through it the right way, right?Yeah.So, you get your tax refund the next year.Well, guess what?You're a homeowner now.So, your tax refund's probably gonna be thousands of dollars larger.5 grand, let's just say, you're gonna get in a, in a larger tax refund.Right.But let's just say it's not even extra.You take your tax refund, you get 5 grand or whatever.That's pretty typical for families.Mm-hmm.You now, instead of spending that frivolously or going on the vacation or doing something like that, pocket that 5 grand and throw it in the subsidy account, and you subsidize your payment for another- Even more.2 years, right?Mm-hmm.Or even more significantly, and it's like there's- Right.there are, there are ways to defer the risk.You can emotionally ignore these possibilities and just say, "Nah, it's too risky," and then you can look back in 5 years and you can be hundreds of thousands of dollars less wealthy than you otherwise could have been.You could be playing the same gain- game in a more unaffordable market, in a market where home- Mm-hmm.prices are more expensive, and you could never catch it.And then you can look back when you're 40 or 50 years down the road and say, "Damn, I should've bought that house, uh, because then I wouldn't have to rely on Social Security that may or may not be here."Yeah.Or, "Then I would have a more fruitful, enjoyable retirement.Then my family may not have to rely, or I may not have to rely on my family so much, or my kids so much."Mm-hmm.Or, you know, "I might be able to leave a legacy, a financial legacy for my kids and, and, you know, leave something behind because of these simple decisions and sacrifices."LikeYeah.What the hell?And I, I always like to point by, I've been talking about Gen X now for a while.Yeah.And I can't remember the exact stat.They make up, I, I believe it's about 25%, and you might have to double-check this, 25% of the nation's population.Gen X?Yes.Okay.But they spend like 30-something percent.So they outspend what their actual population is, so they make sure- Oh, interesting, yeah.And, and I think, I don't think that that's a mere fact of just making more money.I think it's ge- Damn, it's only 20%.Okay, so it's even less.Yeah.But th- And I believe this is of the world's economy.They spend like 30-something percent- I did US.Oh, oh, wow.Wow.Let's see.So you'll need to double-check me before I continue on this.But the fact that I'm trying to make here is they, they outspend their population percentage by a good majority.And that's who's giving the advice to these younger homebuyers.Exactly.Right, 100%.But they don't realize it.They had to make sacrifices.They bought ear- early on, right?They bought when they were young adults, made some sacrifices, and it's not a matter of they're making more money right now.It's the fact that they have expenses, w- their second-biggest expense outside of taxes, everyone's second-bigest expense is housing.Mm-hmm.Whether you're renting or you own.And these guys have milliondollar homes or more, a lot of them, but their payments, if they stayed out of debt, are, I mean, less than a couple thousand bucks a month.Right.On, on at least the majority of them.Yeah.So they just have more residual income that they can spend, but they're also, 50I can't remember the age cutoff.It's like at, what is it, '80, '81 or 1981?Anything before that?Um, let's see.Hang on, I think it- Regardless, they're, they're in their 50s.1965 to '80.Okay, so yeah, they're in their 50s, 60s.Now they have all the residual income to go out and do the vacations and have the fun, and that's why they're spending so much, because they've fixed their- But the reality is, dude- We oft- sometimes don't, we d- we don't ever look at the inflation fighter that housing can be, owning real estate, because yes, there are some variables p- There are some costs that can go up, taxes, insurance, whatever.I'm not gonna be that guy who says, "That can't change."Right.Your principal and interest payment, though stays the same.Right.And over years, your income, as long as you're staying out of debt, that gap between your fixed expenses versus your income should grow and grow and grow, if you do it the right way.Uh, 100%.One thing to plug in here that's important, I think, because these fixed expenses, taxes and insurance go up.Yes, that's a risk as a homeowner.Um, uh, we talked about utility costs going up.We talked about- Mm-hmm.labor costs going up, so HOA dues go up or maintenance on your home goes up.Well, guess what?If you're a renter, all those costs are being passed onto you, too.The landlord's not just, out of the graciousness of their heart, gonna subsidize those costs for you.You're going to pay those costs no matter what.Yeah.Those costs are going- They're gonna pass those on to you.But then they're also gonna set themselves up to where they're cash flowing- Right.because their mortgage payment is probably $1,000 less- R- 100%.than what your rent is.If you were the owner, you would pay $1,000 less for the same house.Exactly, yep, yep.And that- And you have to put a plug in the, in, in, in it somewhere- Mm-hmm.because it's running from you fastYou can't keep up with it, right?Yeah.It's not gonna work.That's, that's- It's just crazy how powerful debt service can be on an asset- Yeah.like real estate.Yeah, it's crazy.So I did pull that up.Um, so it's, uh, apparently they're like 19 to 20% of the total population, and they're responsible for 33% of the consumer spending in America, in the United States.Yeah, yeah.That's wild.That's freaking nuts, huh?Way overspending.And the stupid thing is, when I got in the business, that's who I was s- serving- Mm-hmm.was, 'cause I'm a Millennial, and I'm like, I think I'm like a mid-tier Millennial, just right in the middle.Yeah.Um, they were the clients that I was working with.Yep.They all are debt-burdened.They all have all the toys, all the cars, the big house.Like, keeping up with the Joneses is a real thing in that generation- Yeah.largely.And it's like, again, they're the ones, they are the parents and the grandparents of these homebuyers nowadays.Yeah.Giving the advice, it's like, don'tI'm not saying that we're the smartest people in the world, but I am saying that, like, you've gotta r- tr- lean on resources that actually know things, and dissect the logic of what you're hearing.And make a decision on your own.But make sure that you're dissecting this logic.I mean, we have ChatGPT that can really help with this, um- Mm-hmm.which honestly I think is a great thing for us and younger generations.But- Yeah.um, anyway, we're getting on a little bit of a, of a tangent here.So, um, the other thing is, you know, like, if, if this 50-year or 100-year mortgage worked, the government would have to step in and subsidize in some way.Yeah.I'm just not a fan of that.It makes it more expensive.The COVID boom was a result of government subsidizing the economy because of quantitative easing.Quantitative easing caused the rates to go low.Uh, there's literally- Low rates caused- I mean, any time you see the government step in and offer help- The consumer pays.it somehow, some way, it's always going to come back.Someone's gonna cash the bill.But not someone.And it's, it's, it's- You and I.the taxpayer.It's the consumer.Exactly.That's what I was getting to.Every person watching is cashing it.The taxpayer will end up cashing the bill at some point.But let's not make it so abstract.The taxpayer, someone.No, you are going to be- Yes.cashing the bill.Yeah.You are gonna pay for it.Your kids are gonna pay for it.It's gonna be more expensive for you and your family.Mm-hmm.You and your family, me and my family.That's who's going to pay for it.It's a bad idea.Mm-hmm.Like, take some accountability.Get strategic.L- like, capitalize on the capitalistic market we live in.Be grateful that we live here.And that's what I think could change a lot, dude.I think just financial education.Absolutely.If they reallyUh, that, what, that's what I think is the true answer to the economic future in the US and affordability in general.Yes.Financial education.'Cause it's not an affordability issue.We're lucky that we have socialLike, if it's in your algorithm and it's something that's important to you, you're probably picking up on some good stuff today, which I would say like there's probably a good percentage of younger millennials or millennials and Gen Zers, if they choose to, because we have access to it right here on our, right here on our phones, probably have a better financial education than any of their- Yeah.Or at least the opportunity for it.you know, parents or generations before it.Yeah, it's opportunity for it.Yep.For sure.Successful right in your hands.Like that's the best way that you can make a situation more affordable again for your family.Yep.You have to beYou a- you can't avoid it.You have to know.You have to understand finance to a level.100%.Yeah.And you gotta take accountability.So I think the answer is 50 or 100 year mortgage, throw it out the window.Terrible idea.Um, housing is more expensive.Housing is not, for most people, actually out of reach.It is within reach if you're willing to do the right things, if you're willing to take advantage of the right strategies, lean on the resources.Yeah.So we encourage you, lean on somebody.We would be grateful to be that somebody.We know this stuff and we are thoughtful and creative in, in helping people accomplish home ownership because at the, in our heart of hearts, what's important for me anyhow in this industry is showing people a path to real financial freedom and real generational wealth.And this is accomplishable by owning, just by buying real estate, one house, maybe 2 houses.You can literally become- Yeah.a multimillionaire through this process.So we would be honored to help you through this process.But if we're not the person, I encourage you, figure it out, find a way to get in.We know that there are hurdles.We know it s- feels insurmountable.We know that all the talking heads are saying that housing is unaffordable and you shouldn't do it, and there's a bunch of fearmongering.They're wrong.Look, any, and in any stretch in history over a 10-year stretch, the long-term investment of real estate always wins.So don't get fooled.Um, thank you all for tuning in.Please be sure to comment, like, subscribe.I would love engagement on this episode, uh, because there's some really heavy opinions here and some contentious- Yeah.topics we're talking about.Please comment.Tell us what your thoughts are so we can understand what people are feeling, what people are hearing, uh, and how you're making decisions.It would be really helpful for us in the channel, so.