Most U.S. home buyers take out either a 30-year or a 15-year mortgage when they buy a home, but what if you could take out a home loan that spread the payments over 50 years?
The Trump administration is suggesting banks should offer 50-year home loans, and New Orleans real estate expert Arthur Sterbcow says it makes sense.
"It's a way to basically decrease the monthly payments, until the fed kind of gets its act together and reduces the interest rates," said Sterbcow.
Sterbcow says the drawback is that, with payments spread over 600 months, the amount applied to principal would be pretty small, but it could help more buyer get on board what he calls the equity escalator.
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"At least it will get that person into what I call the 'equity escalator.' It's an escalator for appreciation," Sterbcow said, explaining that the real value in the home comes from its appreciation, not the principal that gets repaid.
And he says that is still better then renting.
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