Hello, welcome to CMI | Coastal Mortgage Insider, where I share my thoughts on current events in the housing and mortgage markets. There has been movement in Washington with the senate passing a short term funding bill yesterday, a key step forward towards a reopening.

Q: Why would the government shutdown affect the mortgage market?

A: The shutdown impacts gov departments that release economic reports, such as labor and inflation data, which the fed, lenders, and investors rely on to make rate decisions. Additionally, programs like the National Flood Insurance Program pause issuing policies, which can complicate closings in flood-prone areas. However, short shutdowns tend to cause only temporary blips rather than major disruptions.

Q: What is mortgage amortization and why does it matter?

A: Mortgage amortization is the process of paying off your loan over time through regular monthly payments. Each payment is split between principal (the amount borrowed) and interest (the cost of borrowing). Early in the loan, most of your payment goes toward interest, but as time passes, more applies to principal. This amortization schedule affects how quickly you build equity and how much interest you pay over the loan term.

Q: What about Trump’s proposed 50-year mortgage plan?

A: The plan aims to lower monthly payments by extending mortgage terms to 50 years, making home buying more "affordable" when calculating on a monthly payment basis. My initial concerns are what would this look like for borrowers in terms of Interest paid overtime on their 50 year note, as well as equity building at a much slower rate. Importantly, this plan is still under development, with details and regulatory approval pending. At face value, it seems like a short-term fix to a complex housing issue that likely needs a more comprehensive solution.

Disclaimer: This Podcast is not advise. This is for conversation in the spaces we share a passion, and information sharing.