E74 - Why 50 Year Mortgages Won't Solve the Housing Crisis

Hans and Brian break down the internet outrage over Trump's proposed 50-year mortgage—and why almost everyone is missing the point.

The real issue? Homes aren't going up in value—they're going up in price. And it's not because of creative mortgage products. It's because we've been completely untethered from financial discipline, buying based on monthly payments instead of actual value. The average person moves or refinances every seven years anyway, so whether it's 15, 30, or 50 years doesn't fundamentally change the problem.

Hans walks through the net present value discount formula to show why all three mortgage options are mathematically equivalent when you understand time value of money. The key isn't which mortgage term you choose—it's what you do with the cash flow difference and whether you understand human behavior well enough to avoid Parkinson's Law.

Plus: why banks love principle-only payments (you're giving them 2055 dollars at full value today), the mortgage recast strategy your lender will never mention, and why the only real solution is controlling the entire banking function yourself so your kids and grandkids never have to step inside a traditional bank.

Chapters:

00:00 - Opening segment02:28 - Comparing total interest paid: 15 vs 30 vs 50 year mortgages 04:00 - The net present value discount formula explained 06:56 - Why understanding cash flow and equity matters 10:38 - The three variables that determine mortgage mechanics 13:00 - Parkinson's Law and the "compared to what" question

17:16 - Front-loading vs back-loading mortgage payments (policy loan example) 18:33 - The mortgage recast strategy banks won't tell you about 21:39 - Why future dollars are worth less than today's dollars 29:00 - The only two times you're secure in home ownership 30:22 - Taking control of the entire banking function for your family 34:07 - People don't buy homes, they buy monthly payments 37:37 - The already-broken system that 50-year mortgages expose 40:22 - Neil McSpadden's take: this isn't about affordability, it's about liquidity 42:00 - Comparing three different mortgage strategies with whole life policies 47:48 - The seen and the unseen: what are you doing with that capital? 49:00 - Why human behavior matters more than the math 51:00 - Nelson Nash and understanding the banking function first

Key Takeaways:

• Homes are going up in price, not value—untethered financial behavior and "what can I afford per month" thinking has driven housing costs through the roof for decades

• All mortgage terms (15, 30, 50 year) are mathematically equivalent when you understand net present value discount formula—what matters is what you do with the cash flow difference

• When you make principle-only payments, you're giving banks full-value 2055 dollars today without any discount—they love this because you're making them whole on payments that should be worth a fraction of their face value

• The average homeowner moves or refinances every seven years, making the actual loan term almost irrelevant—you're not paying off your house anyway, even with a 15-year mortgage

• Most lenders won't tell you about mortgage recasting—make a lump sum payment (usually $10k minimum), pay a small fee, and they'll recalculate your loan with a lower monthly payment while keeping the same term

• The real solution isn't optimizing which mortgage to choose—it's building a family banking system so you control the entire function: the repayment schedule, the equity, and the process

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