MASON, Mich — Would you consider a 50-year mortgage to make buying a home more affordable? If you got a house with a 50-year mortgage, it could save you $100 a month. But would it be more affordable? I'm also looking at what it'll cost in the long run.
- Trump administration proposes 50-year mortgages to help first-time buyers afford homes.
- Example shows $100 monthly savings but interest costs double over loan life.
- Local real estate expert says it's too early to determine if plan will help more people buy homes.
Rochelle Ridgell has been an associate broker in the Lansing area for 30 years. She tells me that buying a home is a long process.
"It can be a very valuable asset if you do things the right way and educate yourself in the process," Ridgell said.
WATCH BELOW: Trump administration proposes 50-year mortgages
She tells me when it comes to looking at a mortgage, neighbors pick what best suits their personal situation.
"Look at your situation. As you access it, what works best for you now? Then look at your future," Ridgell said.
The Director of the National Economic Council of the United States, Kevin Hassett, said earlier this week the Trump administration is proposing a 50-year mortgage loan. He says it's to tackle home affordability.
"You would basically build equity first of all, a little slower because it's fifty years. Fifty years fixed is a great way to build lots of equity. But don't forget, you get equity if the price goes up and average prices tend to increase," Hassett said.
Hassett says the proposal is aimed towards first-time home buyers.
"The average age of a first-time home buyer has gone up by about 10 years in just a few years, so this is something very serious that we're addressing," Hassett said.
I headed over to a home on the market in my neighborhood of Mason listed at $189,000 to see what the difference between a 30-year mortgage loan would be compared to a 50-year mortgage loan.
Using a mortgage calculator with a 20% down payment at a 5.98% interest rate, I found that under a 30-year mortgage it would be around $1,279 a month. Under a 50-year mortgage it would be $1,168, a little over $100 cheaper. But interest over the life of the loan would double.
Back with Ridgell, she says it's too early to tell, but there could be pros and cons in this plan. Depending on how long it takes for you to pay off the loan.
"If you hurry up and pay the house off, you're saving money, you're bringing that price down," Ridgell said.
Ultimately, she says there are many questions left unknown right now, so it's hard to say whether or not a new plan will help get more people into homes.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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