50-Year Mortgage – Part 2

Do you want to buy a house?

Supporters of the 50-year mortgage say it’s better than 50 years of renting. They assume homeowners would refinance at some point or pay it off early. However, it could open the door to buying too expensive of a home or investing in multiple homes. Few people stay in a home for 50 years. If a homeowner moves or refinances in less than 10 years, they would have built very little equity.

Extremely long-term mortgages were introduced in the late ’80s during Japan’s asset bubble era. Some were 100 years long and called “three-generation loans.” Low interest rates and speculative real estate fever led to lax lending practices. This allowed families to pass the debt across generations, but it created financial risks. That bubble burst in 1990, causing widespread defaults and underwater loans. These products largely vanished from the market due to regulatory tightening and economic fallout.

The Bible says that “the borrower is a servant to the lender.” (Proverbs 22:7) Since long-term debt is dangerous, I recommend patience before buying. Write down your goal, and try to live frugally for several years by cutting out unnecessary spending. Consider living with friends or family, renting a tiny house, or a granny flat to minimize your expenses. Study the housing market, and consider living and working in a less costly city or state. Ask the Lord to provide the right home and job. He will give you the strength and discipline you need to steward your time and money wisely to prepare to buy a home.

And if credit card debt is keeping you from buying a home, let Christian Credit Counselors help. They’ll create a debt management plan specifically for you. For more information, visit online at crown.org/ccc.