Mortgage Rates (7 Viewers)

[Chadstroma]

Trade deal announced with China. Our tariffs down to 30% and theirs 10%. It seems to be a win. My question is do we get the final agreement out of the 90 day window that will go well beyound tarriffs and adress the Chinese unfair trade practices... I am betting it will and if it does, it is a huge win for the US.

10 year yield up in response.

Which is a bit weird as you would think this would be deflationary.

If you thought the tariffs would slow down the economy, which I think was the prevailing opinion, that would have been deflationary.

Most thought the tariffs would increase the cost of goods which is inflationary.

As with most things about economics, you can over simplify things in many different ways and usually it is more complicated because things happen very rarely with one cause and one effect. I think my post was oversimplified and also misleading (saying yield up in response). Often times when stock market tanks, yields lower as bonds are bought. When stock market rises, bonds have to pay more to attract buyers. I think that is the main driver here. This seems to be due to the agreement and some other positive economic data. So, more like the market increased in response and then in response to that the yield increased. Also investors looking ahead to the Fed meeting. I am sure there were other factors.

 

[Chadstroma]

My post on my socials about Vantagescore 4.0 being approved for mortgage lending...

Big News in Mortgages!
The FHFA has approved VantageScore 4.0 for mortgage lending—and this could change the game for millions of potential homebuyers.

So what does that mean for you?

MORE People Could Qualify
VantageScore 4.0 looks at your credit behavior over time (trended data) and even considers things like rent, utilities, and cell phone payments. That means:

Better chances for those with limited credit history and potentially better route for those struggling with the current mortgage scores.

A "More" Credit System
This is a big shift away from only using older FICO models. VantageScore adds competition, modernizes scoring, and may better reflect your financial reality.

Less Weight on Medical Debt & Collections
Finally, a model that doesn’t let a single bill drag down your entire score.

BUT... it’s not without growing pains:
Lenders need time to adjust
We don’t yet know how this will affect interest rates
And yep, it may get confusing having another score in the mix

Rollout is Here
Approved for immediate use but lenders will need a minute to start using them

BOTTOM LINE:
If you’ve been locked out of homeownership by a traditional FICO score, this change might be your second chance.

Message me if you want to understand how this could impact your ability to qualify or improve your mortgage-readiness under the new rules or to simply plan towards how to best use this to make your home ownership dreams come true!

 

[Chadstroma]

Add some other thoughts later...

 

[Chadstroma]

Just priced out a FHA loan for a client and mid 5's with a little lender credit. That is nice to see.

 

[Beef Ravioli Part 2]

@Chadstroma do you see interest rates getting back into the 4’s in the near future?

 

[Chadstroma]

@Chadstroma do you see interest rates getting back into the 4’s in the near future?

Near future? That is a subjective time frame which I would put as less than a year and I don't think so.

 

[FarFromHome]

Just priced out a FHA loan for a client and mid 5's with a little lender credit. That is nice to see.

Oh wow. That's nice. My wife and I love big big moves. Like we have moved over the ocean twice. It's just exciting. We been where we are for 4 years. Mortage under 3% and it's keeping us here longer then we want. This is a promising post to read. Daddy getting itchy to move again. Ha ha

 

[Chadstroma]

Just priced out a FHA loan for a client and mid 5's with a little lender credit. That is nice to see.

Oh wow. That's nice. My wife and I love big big moves. Like we have moved over the ocean twice. It's just exciting. We been where we are for 4 years. Mortage under 3% and it's keeping us here longer then we want. This is a promising post to read. Daddy getting itchy to move again. Ha ha

You are crazy my friend

 

[-OZ-]

Just priced out a FHA loan for a client and mid 5's with a little lender credit. That is nice to see.

Oh wow. That's nice. My wife and I love big big moves. Like we have moved over the ocean twice. It's just exciting. We been where we are for 4 years. Mortage under 3% and it's keeping us here longer then we want. This is a promising post to read. Daddy getting itchy to move again. Ha ha

It’s nice to see people living up to their name.

 

[FarFromHome]

It’s nice to see people living up to their name.

That's hilarious. Ha ha. I never really think of my username or what it means. It was 1999, Bosnia, I worked night shifts and this idea of message boards was just beginning. I spent countless late night hours in these primitive message boards to pass time and manage stress. Username has just followed decades later.

 

[-OZ-]

It’s nice to see people living up to their name.

That's hilarious. Ha ha. I never really think of my username or what it means. It was 1999, Bosnia, I worked night shifts and this idea of message boards was just beginning. I spent countless late night hours in these primitive message boards to pass time and manage stress. Username has just followed decades later.

That’s much better than being a Tom Holland fan.

 

[Orange&Blue]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

 

[Buckna]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

 

[Chadstroma]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

I handle loans before servicing but know a little... maybe enough to be dangerous.

There is usually a due on sale clause that upon transfer of ownership the loan becomes due however there is a law (I believe, IIRC) that prohibits the clause from taking affect upon death for a relative or heir if the property is occupied as their primary residence. If primary occupancy was taking place the proper steps would be to contact the servicer and get an assumption or modification to your wife and/or sister in law so they would be able to handle the loan for any servicing needs that would come up and then you could do a quit claim deed to the LLC.

However, reading between the lines, I am guessing you are thinking of keeping the property and renting it out. My understanding is that you would not have the protection of the law mentioned above as it only applies to primary occupancy. If you continue to pay the mortgage, there is a decent chance the lender does not take any action. However, the lender would have the right to call the note in if they wanted to a well as if anything came up where you needed to contact the servicer for any reason then you are screwed.

To keep all things above board, the best route forward, to rent it out would be refinancing to an investment product (typically either conventional or DSCR which I do a lot of... probably half my business the last year has been these loans). If you do conventional, you close in the wife/wife's sister name(s) and then after closing do a quite claim deed to the LLC. If you do the DSCR, many lenders will close in an LLC (most of the ones I use for DSCR do).

 

[Chadstroma]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

 

[PlayaHata]

Wife and I are building a new house with a scheduled closing date of October 30 so we've been keeping a close eye on mortgage rates the past few months. 30 year fixed rates have been slowly dropping which we are obviously thankful for. We were quoted a 60-day lock of 6.375% last week, which is the first I've seen it lower than 6.5% and I just got an email that today's rate is 6.125%. That's the lowest it's been in a year! I've been tracking rates at https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed and their guidance seems to indicate that today's rate already has the Fed's expected cut this week baked in since it seems to be a foregone conclusion.

We may go ahead and lock unless any of you MortgageGuys think it will continue to trend down over the next 30 days?

 

[Chadstroma]

Wife and I are building a new house with a scheduled closing date of October 30 so we've been keeping a close eye on mortgage rates the past few months. 30 year fixed rates have been slowly dropping which we are obviously thankful for. We were quoted a 60-day lock of 6.375% last week, which is the first I've seen it lower than 6.5% and I just got an email that today's rate is 6.125%. That's the lowest it's been in a year! I've been tracking rates at https://www.mortgagenewsdaily.com/mortgage-rates/30-year-fixed and their guidance seems to indicate that today's rate already has the Fed's expected cut this week baked in since it seems to be a foregone conclusion.

We may go ahead and lock unless any of you MortgageGuys think it will continue to trend down over the next 30 days?

Yes, the Fed cut is already priced in to these rates. The rates may move up or down or stay about the same and it will largely (barring some sort of surprise in the actual cut itself) based on the language of the Fed. I am leaning towards there being some language allowing for more cuts as employment data seems to be weakening. Inflation is being a little stubborn but it is still within the range that a future cut could happen. Always remember that the Fed has in indirect impact on mortgage rates. The last time the Fed cut the rate, mortgage rates went up.

 

[Joe Schmo]

I have a question regarding the appraisal process. A friend of mine is buying the home she currently rents directly from the landlord. It's an as-is sale with no agents involved, just a broker to help with the loan. The appraisal is coming up soon and I was wondering if we should supply the appraiser with comps or is that something they do on their own? Thanks for any help.

 

[gianmarco]

I have a question regarding the appraisal process. A friend of mine is buying the home she currently rents directly from the landlord. It's an as-is sale with no agents involved, just a broker to help with the loan. The appraisal is coming up soon and I was wondering if we should supply the appraiser with comps or is that something they do on their own? Thanks for any help.

That's what they do. It's part of what you're paying them for. No reason to waste your time unless you're curious and want to see yourself before they give you a number.

I would only bother doing that stuff if the appraisal you get is not correct and you need to compare and find out why.

 

[Joe Schmo]

I have a question regarding the appraisal process. A friend of mine is buying the home she currently rents directly from the landlord. It's an as-is sale with no agents involved, just a broker to help with the loan. The appraisal is coming up soon and I was wondering if we should supply the appraiser with comps or is that something they do on their own? Thanks for any help.

That's what they do. It's part of what you're paying them for. No reason to waste your time unless you're curious and want to see yourself before they give you a number.

I would only bother doing that stuff if the appraisal you get is not correct and you need to compare and find out why.

Thank you for clarifying, thought that was the case but AI says it could go either way. Eff Ai!

 

[Chadstroma]

I have a question regarding the appraisal process. A friend of mine is buying the home she currently rents directly from the landlord. It's an as-is sale with no agents involved, just a broker to help with the loan. The appraisal is coming up soon and I was wondering if we should supply the appraiser with comps or is that something they do on their own? Thanks for any help.

The appraiser pulls comps looking at the most recent, nearest and most likely property possible. Then using that as a baseline they make adjustments for the differences in property and take into consideration things like market trends.

 

[Chadstroma]

I have a question regarding the appraisal process. A friend of mine is buying the home she currently rents directly from the landlord. It's an as-is sale with no agents involved, just a broker to help with the loan. The appraisal is coming up soon and I was wondering if we should supply the appraiser with comps or is that something they do on their own? Thanks for any help.

That's what they do. It's part of what you're paying them for. No reason to waste your time unless you're curious and want to see yourself before they give you a number.

I would only bother doing that stuff if the appraisal you get is not correct and you need to compare and find out why.

Thank you for clarifying, thought that was the case but AI says it could go either way. Eff Ai!

The only thing I can think of that would make AI say "either way" is if you disagree with the valuation, one of the ways you can fight it is showing "better" comps than what was used in the valuation. That and any factual data error, such as 2,000 sqft home showing at 1,900 are the majority ways you could ask for a new valuation. The only other way would be an argument that the adjustments made by the appraiser were outside of the norms. But a better comp that is somehow missed by the appraiser is the most common way to fight an appraisal valuation.

 

[Chadstroma]

It is a good example of needing to have knowledge of a subject when using AI in order to catch its missteps. I use AI for a lot of things but mostly in cutting time consuming activities down. I think the most you use it in an area that you are a subject matter expert on then the more you learn how to not trust it.

 

[Chadstroma]

3 Things to Know About the Housing Market:

1. Rates Rose After Fed Cut, But Only Slightly: As we expected, mortgage rates rose slightly after last week’s Fed rate cut. This is because markets already started pricing in this rate cut in late August when Fed Chair Jerome Powell implied that a rate cut would happen during the September Fed Meeting.
   
2. Why This Year is Different Than Last Year: Last year, the Fed also made its first rate cut of the year, but the 10-year Treasury yield and mortgage rates shot higher afterwards. This year, the 10-year has increased, but only slightly. What’s different about this year vs. last year is the economic data. The labor market, specifically, was in a much better place last year than it is so far this year.
   
3. What’s Next For Rates?: For mortgage rates to keep dropping, we need more data that will increase confidence in another rate cut during the next Fed Meeting in late October. We have the Fed’s favorite inflation report, PCE, coming tomorrow morning. The other big market mover will be our next U.S. jobs report, scheduled for release the morning of October 3rd. If inflation doesn't rise out of control and the job market remains muted, we could see another cut in October, resulting in lower mortgage rates.

 

[Chadstroma]

Mortgage rates were largely unchanged throughout the week. Friday’s PCE inflation report came in just in line with economists’ expectations. Core PCE, which excludes food & energy and is closely watched by the Fed, rose 0.2% for the month and held steady at 2.9% year-over-year. This ultimately left mortgage rates unchanged between the start of the week and the end.

This week is jobs week, with several pivotal labor reports scheduled to be released between Tuesday and Friday. As we’ve maintained throughout the year, the labor market will dictate how many rate cuts we get; for rates to drop, we need to see job growth continue to stall, especially in Friday’s Bureau of Labor Statistics (BLS) jobs report. One thing to watch is a potential government shutdown this week, which, if it occurs, would delay the release of Friday’s report.

Last Week - Rates Were Steady

Last week’s biggest piece of market-moving data was Friday’s PCE inflation report. The Fed has a dual mandate to maintain a healthy labor market and keep inflation under control; Friday’s report showed headline inflation rose by 0.3% in August, which was in line with economists’ forecasts. Without any data-driven red flags, the 10-year dropped slightly heading into the weekend, and mortgage rates stayed within the tight range where they started the week.

This Week - Rates Could Be Volatile

We have a busy week ahead. It’s jobs week, and this batch of labor reports will be pivotal to the Fed’s decision for or against cutting rates during its Fed Meeting in the last week of October. As always, Friday’s BLS employment report will have the most significant impact on mortgage rates and the 10-year Treasury, but the reports we receive between Tuesday and Thursday could also cause some movement. Here’s the schedule for the week ahead:

• Tuesday: Job Openings, Losses, and Turnover Survey (JOLTS)
• Wednesday: ADP Employment Report
• Thursday: Initial Jobless Claims
• Friday: BLS Jobs Report

One potential wrinkle for this week’s labor data will be the potential government shutdown. If an agreement cannot be met by Wednesday’s deadline, the impending government shutdown would prevent the release of Friday’s BLS report. In the past, government shutdowns have sent the 10-year lower, but the longer-term implications depend on the length of the shutdown if one were to happen.

 

[Instinctive]

Looks like we're gonna get around 6.7% on a jumbo. ARM rates only save like $150/month but open you up to a bad trend and uncertainty. Very interesting.

 

[Chadstroma]

Looks like we're gonna get around 6.7% on a jumbo. ARM rates only save like $150/month but open you up to a bad trend and uncertainty. Very interesting.

You find something?
In this rate environment, I would be open to an ARM but at the end of the day, it is uncertain future and if you are not comfortable with it then it doesn't make sense.

 

[Instinctive]

Looks like we're gonna get around 6.7% on a jumbo. ARM rates only save like $150/month but open you up to a bad trend and uncertainty. Very interesting.

You find something?
In this rate environment, I would be open to an ARM but at the end of the day, it is uncertain future and if you are not comfortable with it then it doesn't make sense.

Yeah I mean if the ARM was more than 25 basis points I'd be more open to it. The savings just aren't remotely meaningful vs the certainty for us right now. It's literally like a total of $180-200/month on the house we found.

 

[Chadstroma]

Looks like we're gonna get around 6.7% on a jumbo. ARM rates only save like $150/month but open you up to a bad trend and uncertainty. Very interesting.

You find something?
In this rate environment, I would be open to an ARM but at the end of the day, it is uncertain future and if you are not comfortable with it then it doesn't make sense.

Yeah I mean if the ARM was more than 25 basis points I'd be more open to it. The savings just aren't remotely meaningful vs the certainty for us right now. It's literally like a total of $180-200/month on the house we found.

Totally- benefit vs risk is not there.

 

[Chadstroma]

Last Week - Rates Were Steady

Last week was supposed to be jobs week, but the government shutdown prevented the release of our pivotal labor figures. Wednesday’s ADP employment report reported 32,000 jobs lost in September. This is the second consecutive month that ADP has reported job losses, which is especially shocking given that economists had predicted 45,000 jobs would be created in the report.

This temporarily brought the 10-year lower, but a lack of more comprehensive data beyond private payrolls prevented a longer-term impact on mortgage rates.


This Week - Rates Could Be Flat

With the shutdown still ongoing, this week is currently looking to be a relatively quiet one in terms of rate movements. We’re continuing to await the end of the government shutdown to receive the jobs data that’s so crucial to the likelihood of another rate cut by the end of the year.

While we await that resolution, we’ll also want to keep an eye on the quotes that surface from the Fed members speaking at this week’s Community Bank Conference on Thursday and Friday.

 

[BassNBrew]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

Or not....https://www.cnbc.com/2025/10/09/trump-letitia-james-halligan-mortgage.html

 

[Chadstroma]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

Or not....https://www.cnbc.com/2025/10/09/trump-letitia-james-halligan-mortgage.html

These are not remotely the same thing.

The instance above is occupancy fraud. I obviously do not have all the details my from what I have read she listed an investment property as either her primary or secondary home. That is indeed occupancy fraud, is against the law and can be prosecuted for.

I also believe from other reports that she listed her father as her husband on an application would be bank fraud.

I have turned down doing loans for people that either outright wanted to do these type of things or I strongly suspected as much on one occasion.

What was discussed above is buying a property as an investment property using a conventional conforming loan, which per Fannie Mae and Freddie Mac, would require to close personally. Later changing the title to an LLC. As noted above, this technically could trigger the 'due on sale' clause of the mortgage. This would result in the servicer calling the loan in (meaning you would have to pay off the loan within a short period of time after notice was given by the servicer). That would be the extent of the issues from this. There is no mortgage or bank fraud involved and as noted above, in practice, it was never an issue.

It was brought to my attention by a colleague recently that in 2017 Fannie Mae published new guidelines to lenders that allowed for this as long as the following conditions were met:

• The mortgage was purchased/securitized by Fannie Mae sometime after 2016.
• The LLC is controlled by the original borrower.
• The borrower doesn’t request a release of liability.

 

[Buckna]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

Or not.... https://www.cnbc.com/2025/10/09/trump-letitia-james-halligan-mortgage.html

Chad beat me to it, but yes, not even remotely the same thing. If she obtained a 2nd home mortgage and then immediately rented the property out full time then she likely committed mortgage fraud. Not even remotely related to quit claiming a property with a primary mortgage on it 5 years in since those loans only require occupancy for 1 year.

Can't really determine much of anything from the charges either way. 2nd homes are allowed to be rented out just not as long term rentals, in fact its expected they'll be rented out but typically limited to less than 180 days a year. There's no indication of the length of occupancy of the alleged renters or any other details that would give a complete picture of the circumstances. Be interesting to watch to see how it develops one way or another.

 

[BassNBrew]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

Or not.... https://www.cnbc.com/2025/10/09/trump-letitia-james-halligan-mortgage.html

Chad beat me to it, but yes, not even remotely the same thing. If she obtained a 2nd home mortgage and then immediately rented the property out full time then she likely committed mortgage fraud. Not even remotely related to quit claiming a property with a primary mortgage on it 5 years in since those loans only require occupancy for 1 year.

Can't really determine much of anything from the charges either way. 2nd homes are allowed to be rented out just not as long term rentals, in fact its expected they'll be rented out but typically limited to less than 180 days a year. There's no indication of the length of occupancy of the alleged renters or any other details that would give a complete picture of the circumstances. Be interesting to watch to see how it develops one way or another.

Per Chad....If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

My secondary point is that just because something never was pursued in the past, I wouldn't assume that expectation moving forward with so much computing power coming online to comb through records if you voted for the wrong person or said the wrong thing online.

 

[Chadstroma]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

Or not.... https://www.cnbc.com/2025/10/09/trump-letitia-james-halligan-mortgage.html

Chad beat me to it, but yes, not even remotely the same thing. If she obtained a 2nd home mortgage and then immediately rented the property out full time then she likely committed mortgage fraud. Not even remotely related to quit claiming a property with a primary mortgage on it 5 years in since those loans only require occupancy for 1 year.

Can't really determine much of anything from the charges either way. 2nd homes are allowed to be rented out just not as long term rentals, in fact its expected they'll be rented out but typically limited to less than 180 days a year. There's no indication of the length of occupancy of the alleged renters or any other details that would give a complete picture of the circumstances. Be interesting to watch to see how it develops one way or another.

Per Chad....If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

My secondary point is that just because something never was pursued in the past, I wouldn't assume that expectation moving forward with so much computing power coming online to comb through records if you voted for the wrong person or said the wrong thing online.

There is a huge difference between criminal and contractual issues here which is what we are saying that these are not even close issues to one another. Bank or mortgage fraud, which is what they are pursuing with James is criminal. Doing a quit claim deed into an LLC after closing has never been and is not criminal. It use to (pre 2017) be a contractual issue that the servicers could trigger the due on sale clause if they so wanted to but as I noted above, published guidelines have made this not an issue anymore as Fannie and then later Freddie basically told them that they will treat it like someone quit claiming to a Family Trust so long as the individual is a controlling interest in the LLC and they do not ask for a release.

The reason why servicers generally do not pursue anything so long as the payments are made on time is purely financial. It is costly to begin foreclosure process for any reason. It is of no benefit to them in most situations. For the criminal side of things, it just isn't something that anyone has a shop set up to go after mortgage fraud on. It is somewhat like jaywalking. Pretty much everywhere has laws against jaywalking but in general, it is not something that is going to be enforced but if they want to... they can. (I got a jaywalking ticket in HS, it was this big focus to get the kids after school to not jaywalk. I did not see the cop and did... he was pissed off because he swore that I saw him and did it anyway, early 90's as a HS kid, $90 sucked losing out on).

I have had conversations with people like lawyers (that may be a bit more political or targets of someone who may want to hammer you just to hammer you) where we discussed occupancy requirements and I told them, almost never enforced but if someone wanted to that was in power they could and then you could lose your professional license. As I noted, I turned down more than a few dollars in my career because well, first, I try to do things the right way regardless but secondly, if there was someone who caught wind of it and wanted to harm me, they could go after my license. "Could" something happen like what you are saying in the future? I guess anything is possible but highly doubtful. This is an instance of political retribution where they looked and looked for things to attack with and if you are not clean as a whistle as the attacker then you open yourself up for the same thing to come back at you. That is about as much as I will touch on that as I want to respect the avoidance of political discussion we are asked to do.

 

[Buckna]

Might be wrong thread, but probably the right people so why not

Father in kaw recently passed and we are trying to decide what to do with his house. It's in a high demand market and he has 15 years left on a 20 year note at 3.25% rate. The house value has almost doubled in those 5 years.

The court has already transferred ownership to my wife and her sister. The mortgage bank is aware, but hasn't taken any action.

Should we keep the house, can we transfer title/mortgage to a LLC? would/can the bank call in their remaining principal and accelerate the loan or change the loan terms?

Obviously we would prefer to just change the owner and keep the terms given today's interest rates.

Disclosure: I'm not a lawyer. The Garn-St Germain Act prohibits the bank from calling the loan when transferred to heirs. As long as the payments continue to be made, then all is good. Quit claiming to an LLC technically always violates the Due on Sale clause, but 99% of the time the bank doesn't care as long as they continue to get paid. In this case they've already been notified of the transfer so potentially quit claiming may bring more attention but the odds seem low they would care. It's not unusual at all for inheritors to rent out an inherited property. In the few cases I've heard of when a bank had a problem or questioned a quit claim, usually they just quit claimed it right back into the the original personal names.

Yes, technically the quite claim to LLC would trigger due on sale by the way that conventional loans (Fannie and Freddie) treat it in their guidelines but in reality it does not as you note with 99% of the time. 100% might be technically wrong but I believe the percentage is well above 99% if short of 100%. Most of my clients that do the conventional mortgages for their investment real estate quite claim to an LLC after closing. I have never heard of an issue.

The thing that is different from above and from the original question is that the loan is done an investment product.

Now, more akin to the original question would be when someone moves out of their primary property and then turns it into a rental. As long as someone lived in the property for a year then either by terms or how it is treated by servicers and regulators then it is not considered mortgage fraud.

If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

Or not.... https://www.cnbc.com/2025/10/09/trump-letitia-james-halligan-mortgage.html

Chad beat me to it, but yes, not even remotely the same thing. If she obtained a 2nd home mortgage and then immediately rented the property out full time then she likely committed mortgage fraud. Not even remotely related to quit claiming a property with a primary mortgage on it 5 years in since those loans only require occupancy for 1 year.

Can't really determine much of anything from the charges either way. 2nd homes are allowed to be rented out just not as long term rentals, in fact its expected they'll be rented out but typically limited to less than 180 days a year. There's no indication of the length of occupancy of the alleged renters or any other details that would give a complete picture of the circumstances. Be interesting to watch to see how it develops one way or another.

Per Chad....If primary occupancy was taking place then slam dunk not an issue. If turning into a rental then I can see the servicer possibly being an issue though I would be on the surprised side of they do as in most cases as long as payments are on time- they tend to leave things as is even in cases of actual mortgage fraud.

My secondary point is that just because something never was pursued in the past, I wouldn't assume that expectation moving forward with so much computing power coming online to comb through records if you voted for the wrong person or said the wrong thing online.

As Chad mentioned, the specific charges are a different circumstance than our original scenario discussion. Apparently there are some allegations with James of other things such as falsifying some info on a mortgage application in 1983 or having a primary residence in a different state than she resides. Those weren't included in the charges linked in the article though (and could be explained in multiple ways that may not be fraud or at least wouldn't stand up in court.)

Without veering into politics and getting this thread shutdown I do think your secondary point is accurate.

 

[Max Power]

Some thoughts on the 50-year mortgage. I'm in the camp of it's not for me, but maybe others are interested. I've signed four 30-year mortgages in my life. The average span was 3-5 years until I sold. I've had my current for almost 4 years with no plans to move and should be paid off early.

The homebuying industry was jolted over the weekend by a President Donald Trump social media post that claimed a 50-year mortgage could be a game-changer for the housing market.

Of course, no other details were announced. Still, the real estate industry’s online community overwhelmingly thought this was a bad idea for house hunters, suggesting the two decades of added borrowing compared with the traditional 30-year mortgage would make modest savings not worth the effort.

Sadly, too many discussions surrounding homebuying challenges lean on assumptions created in a financial era that may never return. Fresh thinking is welcome to me, and I hope new ideas emerge from the debate about how to put financially strapped home seekers in a buying mood.

A top concern from the weekend’s online chatter about a 50-year mortgage is the potential delay in owning a home mortgage-free.

First of all, very few borrowers hold a 30-year mortgage for its full term. Refinancing or other early payoffs – often through a sale – end the mortgage. There’s no reason a 50-year loan would act differently. So, why shouldn’t a buyer grab a few years of savings?

Additionally, consider the current state of ridiculously elevated home prices. Barring a sharp decline in values, paying off the mortgage may no longer be a realistic goal for the typical homebuyer.

Plus, one shouldn’t quickly dismiss savings of “just a few hundred bucks” a month. That’s real money to new homeowners who likely spent almost their last penny to close the purchase.

The numbers​

Yes, we have to do some math to show why a 50-year loan is not the worst idea ever.

My trusty spreadsheet examined the costs of a $500,000 mortgage on a 30-year loan at a 6.25% rate, as well as two variations on a 50-year loan: one at the same rate and another scenario with a rate that’s half a point higher, at 6.75%. Some real estate gurus suggest a 50-year loan would carry a significantly higher rate – though I’m not convinced.

The 30-year loan would cost $3,079 a month. At the same rate, a 50-year term would cost $2,725 – saving $374 a month, or an 11% discount. At the higher rate, it’d be $2,913 a month – saving $165 a month, or 5%.

Now with the 30-year loan, if held for those three decades, it’s obviously paid off. But the 50-year deals? $373,000 is still owed at 6.25% after 30 years. It’s $383,000 at 6.75%.

To many folks, that remaining balance is a problem. What is forgotten, however, are the monthly savings generated by the 50-year loan’s lower monthly costs.

At 6.25%, the 50-year-old loan’s $354 a month savings add up to $127,000 over 30 years. That could be $202,000 if invested in a 3% savings account or $698,000 if invested in the stock market, assuming a 10% annual return. These earnings, depending on investment earnings, could help pay down or pay off the mortgage at that point.

This potential nest egg is smaller when eyeballing the 50-year loan with a 6.75% rate. The $165-a-month saved adds up to $60,000 over 30 years, or $94,000 if invested at 10%, or $327,000, assuming 10% annual stock returns.

The dark side​

Look, the 50-year mortgage is no panacea for affordability. It might work for a special kind of thrifty buyer.

Fixing housing affordability takes some unorthodox thinking. A 50-year mortgage, if used wisely, could be one tool in housing’s repair kit.

The big question is what most house hunters do with the potential upfront savings. What if the smaller monthly payments are not being saved?

That cash might be used to spend more on the house. A 50-year loan can give a borrower 13% more buying power vs. a comparably priced 30-year mortgage.

This is a risk associated with any financial incentive to house hunters. These deals may benefit a few buyers, but they are likely also to drive up housing costs for all.https://www.eastbaytimes.com/2025/11/11/trumps-50-year-mortgage-isnt-the-worst-idea-ever/

 

[FarFromHome]

Some thoughts on the 50-year mortgage. I'm in the camp of it's not for me, but maybe others are interested. I've signed four 30-year mortgages in my life. The average span was 3-5 years until I sold. I've had my current for almost 4 years with no plans to move and should be paid off early.

The homebuying industry was jolted over the weekend by a President Donald Trump social media post that claimed a 50-year mortgage could be a game-changer for the housing market.

Of course, no other details were announced. Still, the real estate industry’s online community overwhelmingly thought this was a bad idea for house hunters, suggesting the two decades of added borrowing compared with the traditional 30-year mortgage would make modest savings not worth the effort.

Sadly, too many discussions surrounding homebuying challenges lean on assumptions created in a financial era that may never return. Fresh thinking is welcome to me, and I hope new ideas emerge from the debate about how to put financially strapped home seekers in a buying mood.

A top concern from the weekend’s online chatter about a 50-year mortgage is the potential delay in owning a home mortgage-free.

First of all, very few borrowers hold a 30-year mortgage for its full term. Refinancing or other early payoffs – often through a sale – end the mortgage. There’s no reason a 50-year loan would act differently. So, why shouldn’t a buyer grab a few years of savings?

Additionally, consider the current state of ridiculously elevated home prices. Barring a sharp decline in values, paying off the mortgage may no longer be a realistic goal for the typical homebuyer.

Plus, one shouldn’t quickly dismiss savings of “just a few hundred bucks” a month. That’s real money to new homeowners who likely spent almost their last penny to close the purchase.

The numbers​

Yes, we have to do some math to show why a 50-year loan is not the worst idea ever.

My trusty spreadsheet examined the costs of a $500,000 mortgage on a 30-year loan at a 6.25% rate, as well as two variations on a 50-year loan: one at the same rate and another scenario with a rate that’s half a point higher, at 6.75%. Some real estate gurus suggest a 50-year loan would carry a significantly higher rate – though I’m not convinced.

The 30-year loan would cost $3,079 a month. At the same rate, a 50-year term would cost $2,725 – saving $374 a month, or an 11% discount. At the higher rate, it’d be $2,913 a month – saving $165 a month, or 5%.

Now with the 30-year loan, if held for those three decades, it’s obviously paid off. But the 50-year deals? $373,000 is still owed at 6.25% after 30 years. It’s $383,000 at 6.75%.

To many folks, that remaining balance is a problem. What is forgotten, however, are the monthly savings generated by the 50-year loan’s lower monthly costs.

At 6.25%, the 50-year-old loan’s $354 a month savings add up to $127,000 over 30 years. That could be $202,000 if invested in a 3% savings account or $698,000 if invested in the stock market, assuming a 10% annual return. These earnings, depending on investment earnings, could help pay down or pay off the mortgage at that point.

This potential nest egg is smaller when eyeballing the 50-year loan with a 6.75% rate. The $165-a-month saved adds up to $60,000 over 30 years, or $94,000 if invested at 10%, or $327,000, assuming 10% annual stock returns.

The dark side​

Look, the 50-year mortgage is no panacea for affordability. It might work for a special kind of thrifty buyer.

Fixing housing affordability takes some unorthodox thinking. A 50-year mortgage, if used wisely, could be one tool in housing’s repair kit.

The big question is what most house hunters do with the potential upfront savings. What if the smaller monthly payments are not being saved?

That cash might be used to spend more on the house. A 50-year loan can give a borrower 13% more buying power vs. a comparably priced 30-year mortgage.

This is a risk associated with any financial incentive to house hunters. These deals may benefit a few buyers, but they are likely also to drive up housing costs for all.https://www.eastbaytimes.com/2025/11/11/trumps-50-year-mortgage-isnt-the-worst-idea-ever/

Good post. I have moved and bought so many homes in my life I cant keep track. We like big moves. For us, we have always done 15 year mortgages. That's what we chose. For another family a 50 year mortgage might make sense. That's their choice. I don't understand the negative talk on this as an option. Its an option. Sure, it doesn't make financial sense long term but paying less now to be hammered long term is the American way of doing business. Ha ha

 

[dutch]

Some thoughts on the 50-year mortgage. I'm in the camp of it's not for me, but maybe others are interested. I've signed four 30-year mortgages in my life. The average span was 3-5 years until I sold. I've had my current for almost 4 years with no plans to move and should be paid off early.

The homebuying industry was jolted over the weekend by a President Donald Trump social media post that claimed a 50-year mortgage could be a game-changer for the housing market.

Of course, no other details were announced. Still, the real estate industry’s online community overwhelmingly thought this was a bad idea for house hunters, suggesting the two decades of added borrowing compared with the traditional 30-year mortgage would make modest savings not worth the effort.

Sadly, too many discussions surrounding homebuying challenges lean on assumptions created in a financial era that may never return. Fresh thinking is welcome to me, and I hope new ideas emerge from the debate about how to put financially strapped home seekers in a buying mood.

A top concern from the weekend’s online chatter about a 50-year mortgage is the potential delay in owning a home mortgage-free.

First of all, very few borrowers hold a 30-year mortgage for its full term. Refinancing or other early payoffs – often through a sale – end the mortgage. There’s no reason a 50-year loan would act differently. So, why shouldn’t a buyer grab a few years of savings?

Additionally, consider the current state of ridiculously elevated home prices. Barring a sharp decline in values, paying off the mortgage may no longer be a realistic goal for the typical homebuyer.

Plus, one shouldn’t quickly dismiss savings of “just a few hundred bucks” a month. That’s real money to new homeowners who likely spent almost their last penny to close the purchase.

The numbers​

Yes, we have to do some math to show why a 50-year loan is not the worst idea ever.

My trusty spreadsheet examined the costs of a $500,000 mortgage on a 30-year loan at a 6.25% rate, as well as two variations on a 50-year loan: one at the same rate and another scenario with a rate that’s half a point higher, at 6.75%. Some real estate gurus suggest a 50-year loan would carry a significantly higher rate – though I’m not convinced.

The 30-year loan would cost $3,079 a month. At the same rate, a 50-year term would cost $2,725 – saving $374 a month, or an 11% discount. At the higher rate, it’d be $2,913 a month – saving $165 a month, or 5%.

Now with the 30-year loan, if held for those three decades, it’s obviously paid off. But the 50-year deals? $373,000 is still owed at 6.25% after 30 years. It’s $383,000 at 6.75%.

To many folks, that remaining balance is a problem. What is forgotten, however, are the monthly savings generated by the 50-year loan’s lower monthly costs.

At 6.25%, the 50-year-old loan’s $354 a month savings add up to $127,000 over 30 years. That could be $202,000 if invested in a 3% savings account or $698,000 if invested in the stock market, assuming a 10% annual return. These earnings, depending on investment earnings, could help pay down or pay off the mortgage at that point.

This potential nest egg is smaller when eyeballing the 50-year loan with a 6.75% rate. The $165-a-month saved adds up to $60,000 over 30 years, or $94,000 if invested at 10%, or $327,000, assuming 10% annual stock returns.

The dark side​

Look, the 50-year mortgage is no panacea for affordability. It might work for a special kind of thrifty buyer.

Fixing housing affordability takes some unorthodox thinking. A 50-year mortgage, if used wisely, could be one tool in housing’s repair kit.

The big question is what most house hunters do with the potential upfront savings. What if the smaller monthly payments are not being saved?

That cash might be used to spend more on the house. A 50-year loan can give a borrower 13% more buying power vs. a comparably priced 30-year mortgage.

This is a risk associated with any financial incentive to house hunters. These deals may benefit a few buyers, but they are likely also to drive up housing costs for all.https://www.eastbaytimes.com/2025/11/11/trumps-50-year-mortgage-isnt-the-worst-idea-ever/

Good post. I have moved and bought so many homes in my life I cant keep track. We like big moves. For us, we have always done 15 year mortgages. That's what we chose. For another family a 50 year mortgage might make sense. That's their choice. I don't understand the negative talk on this as an option. Its an option. Sure, it doesn't make financial sense long term but paying less now to be hammered long term is the American way of doing business. Ha ha

To me, using a 50 year mortgage term to incentivize potential buyers who are currently locked out of home ownership for financial reasons is akin to legalized loan sharking. It's more like renting with the chance for ownership at the end but in reality there will be massive default rates as people aren't going to stay in one home for the length of time required to gain serious equity and make it feasible to buy another house in the future. I can also see home values skyrocket, negating any up front "savings" on the monthly, as demand outstrips supply which is the real problem that needs to be addressed.

 

[FarFromHome]

To me, using a 50 year mortgage term to incentivize potential buyers who are currently locked out of home ownership for financial reasons is akin to legalized loan sharking. It's more like renting with the chance for ownership at the end but in reality there will be massive default rates as people aren't going to stay in one home for the length of time required to gain serious equity and make it feasible to buy another house in the future. I can also see home values skyrocket, negating any up front "savings" on the monthly, as demand outstrips supply which is the real problem that needs to be addressed.

While I agree with most of what you said, are people being forced into this? Nope. Will it allow some people who had zero change at owning a home have a chance? Yep. Who am I to say it's a bad choice for them if they dreamed of owning home, because my internal math says it's bad. We want to really address this, lower the amount needed up front to avoid PMI. Or ask how do we get interest rates down to 4%. I do wonder what a push for 50 year mortgages will do to overall property values. Out of my depth to answer. I also reserve the right to change my uneducated opinion on this topic through good conversation.

 

[fruity pebbles]

Personally think it’s a ridiculous notion. The rate on a 50 is sure to be at least a half point higher than a 30 given the added risk. At today’s rates a $500,000 loan payment is $150 a month cheaper on a 50 year vs a 30 year. The $150 difference is probably generous on most loans as PMI is going to be more costly as well. For that you get to pay 20 more years.

 

[Max Power]

Some thoughts on the 50-year mortgage. I'm in the camp of it's not for me, but maybe others are interested. I've signed four 30-year mortgages in my life. The average span was 3-5 years until I sold. I've had my current for almost 4 years with no plans to move and should be paid off early.

The homebuying industry was jolted over the weekend by a President Donald Trump social media post that claimed a 50-year mortgage could be a game-changer for the housing market.

Of course, no other details were announced. Still, the real estate industry’s online community overwhelmingly thought this was a bad idea for house hunters, suggesting the two decades of added borrowing compared with the traditional 30-year mortgage would make modest savings not worth the effort.

Sadly, too many discussions surrounding homebuying challenges lean on assumptions created in a financial era that may never return. Fresh thinking is welcome to me, and I hope new ideas emerge from the debate about how to put financially strapped home seekers in a buying mood.

A top concern from the weekend’s online chatter about a 50-year mortgage is the potential delay in owning a home mortgage-free.

First of all, very few borrowers hold a 30-year mortgage for its full term. Refinancing or other early payoffs – often through a sale – end the mortgage. There’s no reason a 50-year loan would act differently. So, why shouldn’t a buyer grab a few years of savings?

Additionally, consider the current state of ridiculously elevated home prices. Barring a sharp decline in values, paying off the mortgage may no longer be a realistic goal for the typical homebuyer.

Plus, one shouldn’t quickly dismiss savings of “just a few hundred bucks” a month. That’s real money to new homeowners who likely spent almost their last penny to close the purchase.

The numbers​

Yes, we have to do some math to show why a 50-year loan is not the worst idea ever.

My trusty spreadsheet examined the costs of a $500,000 mortgage on a 30-year loan at a 6.25% rate, as well as two variations on a 50-year loan: one at the same rate and another scenario with a rate that’s half a point higher, at 6.75%. Some real estate gurus suggest a 50-year loan would carry a significantly higher rate – though I’m not convinced.

The 30-year loan would cost $3,079 a month. At the same rate, a 50-year term would cost $2,725 – saving $374 a month, or an 11% discount. At the higher rate, it’d be $2,913 a month – saving $165 a month, or 5%.

Now with the 30-year loan, if held for those three decades, it’s obviously paid off. But the 50-year deals? $373,000 is still owed at 6.25% after 30 years. It’s $383,000 at 6.75%.

To many folks, that remaining balance is a problem. What is forgotten, however, are the monthly savings generated by the 50-year loan’s lower monthly costs.

At 6.25%, the 50-year-old loan’s $354 a month savings add up to $127,000 over 30 years. That could be $202,000 if invested in a 3% savings account or $698,000 if invested in the stock market, assuming a 10% annual return. These earnings, depending on investment earnings, could help pay down or pay off the mortgage at that point.

This potential nest egg is smaller when eyeballing the 50-year loan with a 6.75% rate. The $165-a-month saved adds up to $60,000 over 30 years, or $94,000 if invested at 10%, or $327,000, assuming 10% annual stock returns.

The dark side​

Look, the 50-year mortgage is no panacea for affordability. It might work for a special kind of thrifty buyer.

Fixing housing affordability takes some unorthodox thinking. A 50-year mortgage, if used wisely, could be one tool in housing’s repair kit.

The big question is what most house hunters do with the potential upfront savings. What if the smaller monthly payments are not being saved?

That cash might be used to spend more on the house. A 50-year loan can give a borrower 13% more buying power vs. a comparably priced 30-year mortgage.

This is a risk associated with any financial incentive to house hunters. These deals may benefit a few buyers, but they are likely also to drive up housing costs for all.https://www.eastbaytimes.com/2025/11/11/trumps-50-year-mortgage-isnt-the-worst-idea-ever/

Good post. I have moved and bought so many homes in my life I cant keep track. We like big moves. For us, we have always done 15 year mortgages. That's what we chose. For another family a 50 year mortgage might make sense. That's their choice. I don't understand the negative talk on this as an option. Its an option. Sure, it doesn't make financial sense long term but paying less now to be hammered long term is the American way of doing business. Ha ha

I would have been better off doing 15 years, but each time I signed on for a 30 year, I thought that was going to be my home for 30 years. Then life comes at you fast. Moved for a job, got a divorce, moved to a suburb that became so overdeveloped we felt smothered and moved to the country. We plan to stay in the current place for at least 30 years. We may downsize in retirement to something easier to maintain, but that's hard to project. I have 4 teenagers who need to get established on their own first.

 

[dutch]

To me, using a 50 year mortgage term to incentivize potential buyers who are currently locked out of home ownership for financial reasons is akin to legalized loan sharking. It's more like renting with the chance for ownership at the end but in reality there will be massive default rates as people aren't going to stay in one home for the length of time required to gain serious equity and make it feasible to buy another house in the future. I can also see home values skyrocket, negating any up front "savings" on the monthly, as demand outstrips supply which is the real problem that needs to be addressed.

While I agree with most of what you said, are people being forced into this? Nope. Will it allow some people who had zero change at owning a home have a chance? Yep. Who am I to say it's a bad choice for them if they dreamed of owning home, because my internal math says it's bad. We want to really address this, lower the amount needed up front to avoid PMI. Or ask how do we get interest rates down to 4%. I do wonder what a push for 50 year mortgages will do to overall property values. Out of my depth to answer. I also reserve the right to change my uneducated opinion on this topic through good conversation.

To me it's adding to our societies propensity to live in debt and in this case the dangle of ownership is an illusion as the vast majority of people are not going to stay in their homes long enough to ever truly own anything. 8 year car loans, 50 year home loans, credit card living, welcome to being another day older and deeper in debt to the company store. And this idea does nothing to address the housing shortage and in fact may exacerbates as people try to flip right side up on their mortgages by staying in place longer than current averages.

As you can tell, with only minimal thought or knowledge on this issue, I am for now firmly in the GTFO with that camp.

 

[FarFromHome]

Personally think it’s a ridiculous notion. The rate on a 50 is sure to be at least a half point higher than a 30 given the added risk. At today’s rates a $500,000 loan payment is $150 a month cheaper on a 50 year vs a 30 year. For that you get to pay 20 more years.

Agreed 100%. But. If that 150 less a month gives a family of 5 it's first ever home that they actually own, who are we to say they can't have that dream because the math dont make sense to us. Maybe they own for 10 years and sell for a little profit. They won't have any profit renting for 10 years.

 

[stbugs]

Personally think it’s a ridiculous notion. The rate on a 50 is sure to be at least a half point higher than a 30 given the added risk. At today’s rates a $500,000 loan payment is $150 a month cheaper on a 50 year vs a 30 year. The $150 difference is probably generous on most loans as PMI is going to be more costly as well. For that you get to pay 20 more years.

If after 30 years, you still owe 70% of the principal, you are basically renting but you are on the hook for all the major repairs. Seems stupid to me. PMI for 20+ years? Lol. Have fun with that.

 

[Max Power]

Apprently the 50 year offering is already a thing in Southern California.

50 Year Mortgage Loans Introduced In California

Gee it seems like only yesterday that we were talking about the newest innovation in mortgages - the <a href="http://www.mortgagenewsdaily.com/692005_Fannie_Mae_40_Year_Mortgage.asp">40 year loan . Actually it wasn't exactly yesterday, it was January, 2005 and the 40 year loan term wasn't...

www.mortgagenewsdaily.com

 

[fruity pebbles]

Personally think it’s a ridiculous notion. The rate on a 50 is sure to be at least a half point higher than a 30 given the added risk. At today’s rates a $500,000 loan payment is $150 a month cheaper on a 50 year vs a 30 year. For that you get to pay 20 more years.

Agreed 100%. But. If that 150 less a month gives a family of 5 it's first ever home that they actually own, who are we to say they can't have that dream because the math dont make sense to us. Maybe they own for 10 years and sell for a little profit. They won't have any profit renting for 10 years.

I mean I guess but any profit is going to be solely from house appreciation because they’ll have little principal pay down. Just seems like a non solution solution and the biggest benefactor is the banks

 

[dutch]

Apprently the 50 year offering is already a thing in Southern California.

50 Year Mortgage Loans Introduced In California

Gee it seems like only yesterday that we were talking about the newest innovation in mortgages - the <a href="http://www.mortgagenewsdaily.com/692005_Fannie_Mae_40_Year_Mortgage.asp">40 year loan . Actually it wasn't exactly yesterday, it was January, 2005 and the 40 year loan term wasn't...

www.mortgagenewsdaily.com

eek, and that was an arm. Yuck. Talk about luring in buyers and sinking them in debt!

 

[dutch]

Personally think it’s a ridiculous notion. The rate on a 50 is sure to be at least a half point higher than a 30 given the added risk. At today’s rates a $500,000 loan payment is $150 a month cheaper on a 50 year vs a 30 year. For that you get to pay 20 more years.

Agreed 100%. But. If that 150 less a month gives a family of 5 it's first ever home that they actually own, who are we to say they can't have that dream because the math dont make sense to us. Maybe they own for 10 years and sell for a little profit. They won't have any profit renting for 10 years.

That's the rub for me as the family of 5 will not own that house, they will own the right to pay the lender interest until such time as they can gain enough equity to be able to buy another future house with whatever they get from a sale on this one. That will take many years, I read somewhere around 17 if you factor the rise in home prices as part of the calculation. And at year seventeen maybe that family can afford to be on the hook for 30 year loan instead which would mean a total of 47 years before full homeownership base on the rosiest scenario.

 

[FarFromHome]

I mean I guess but any profit is going to be solely from house appreciation because they’ll have little principal pay down. Just seems like a non solution solution and the biggest benefactor is the banks

For sure. Banks blow. In the past decade I sold a home in Maui that appreciated nearly 100 grand in 5 years. My current home in Georgia has appreciated nearly 50 grand in 4 years. The housing market is so sensitive and you brought up a great point on overall values. What does this mean for the values? I'm a reasonable man, but id prefer my home value not go down 40% due to this. Ha ha