When people focus on only what they are paying now bad things happen (like the rash of foreclosures spurred by adjustable rate mortgages). Between this and the new tax deduction for the interest on some new car loans, what I see is indebtedness being sold as a feature.
Not even considering the time value of money. The idea seems good but does little to help. We need more housing. Often times I wish houses were treated less like an investment, but I also understand that they are a major vehicle for wealth for a lot of people.
Wealth accumulation happens for two reasons, equity build up through paying down principle and through appreciation. The paying down or forced savings portion is being diluted here.
I seem to recall Japan doing something like the 50 year mortgage at some point. Regardless, the monthly saving in payments seems utterly inadequate. This sounds like a payday loan scam.
When people focus on only what they are paying now bad things happen (like the rash of foreclosures spurred by adjustable rate mortgages). Between this and the new tax deduction for the interest on some new car loans, what I see is indebtedness being sold as a feature.
“Indebtedness sold as a feature” well put
Not even considering the time value of money. The idea seems good but does little to help. We need more housing. Often times I wish houses were treated less like an investment, but I also understand that they are a major vehicle for wealth for a lot of people.
Wealth accumulation happens for two reasons, equity build up through paying down principle and through appreciation. The paying down or forced savings portion is being diluted here.
I seem to recall Japan doing something like the 50 year mortgage at some point. Regardless, the monthly saving in payments seems utterly inadequate. This sounds like a payday loan scam.
Yes, the math ain’t mathing
Seems like the biggest problem is housing supply. Here is an article on why supply is not enough, and some suggestions on how to increase it. https://www.ncsl.org/human-services/increasing-the-housing-supply-by-reducing-costs-and-barriers