Here’s what home interest rates may one day look like, and what it means for your wallet
By William Ulrich and Dennis Paulaha
William Ulrich
Home ownership is often the largest part of a family’s wealth. Yet, for too many, high mortgage rates make qualifying for a home loan and building equity a challenge.
“A 1% mortgage rate would change America forever,” said William Ulrich and Dennis Paulaha, creators of the 1% Mortgage Solution.
This is a trickle-up economics plan to increase economic growth and attack racial disparity without additional taxes.
We need more money and a stronger economy for our future
Instead of feeling uncertain about your financial future, Ulrich and Paulaha say it is possible to feel so secure that you’ll feel more comfortable spending. This will help businesses and the national economy to flourish.
“It’s simple,” they said. “The U.S. government can’t just give everyone money, month after month. But it can give you a 30-year mortgage on either a new or existing primary residence at a fixed 1% mortgage rate. And if you have an existing $400,000 mortgage with a 4.1% mortgage rate, refinancing it at one percent puts an extra $660 a month of disposable income in your pocket.”
They believe, “If we can get money into the hands of regular, working class people, they will spend which will help us get out of the economic mess we’re in.”
How the 1% solution would work
“We can’t fix the economy with policies that help big business and ignore basic economic facts. And the one thing economists know, and politicians like to ignore, is that consumer spending drives our economy. The best way to get our economy rolling again is to give consumers like you more disposable income.”
Ulrich and Paulaha want their 1% Mortgage Solution available to all financially qualified U.S. citizens, but with a $500,000 home-value limit. To prevent abuse and profiteering, the mortgages cannot be assumed by anyone other than an immediate family member.
The total value of mortgages held by financial institutions is about $10 trillion. If they were all refinanced at a 1% mortgage rate, it would add almost $200 billion to consumers’ disposable income. And because economists know money spent is re-spent, the extra $200 billion could add as much as $2 trillion to total spending, year after year. Even if only half are refinanced, it can add about $1 trillion to total spending. Which they say is what we need to pull the economy out of the hole it is in.
“The more disposable income you have, the more you can save and spend. The more you spend, the more you add to business profits. As sales and profits increase, companies increase employment, wages and investment. And thanks to you, the economy is back on track.”
This would not be a government hand out
Paulaha and Ulrich stressed that this is not a Democratic or Republican idea. Nor, is it a government hand out or something that will hurt banking institutions.
“We’re not taking money away from banks. They will still be issuing mortgages. As the economy strengthens, they’ll be making more business loans. Plus, homeowners may want to use the extra cash to buy a vacation home.”
They also pointed out that, “Failed mortgages triggered the 2008 collapse of our financial system. If the economy isn’t straightened out soon, a lot of mortgages will once again be at risk.”
This is not giving money away. It is lending money that will be repaid.
“And as economic growth increases, so will tax revenues from the rising profits, employment, wages and salaries. The Federal Reserve has been giving loans to banks at 0% interest, knowing some loans the banks make will not be repaid. We think it’s time for the government and the Federal Reserve to help the people. If large banks and corporations can receive loans at 0%, why not 1% mortgages for people?”
Their conclusion is as good as it gets: “It will reverse the current economic decline. It will support home prices. It will let everyone save and spend more. It will increase credit availability as existing mortgages are paid off. It will create jobs. It will increase tax revenues. It will not increase the deficit. And it can be implemented immediately.”
Put pressure on congress
Ulrich and Paulaha point out that a lot of people are unhappy with the performance of the U.S. government. “The government has not provided the protection and services paid for by our taxes. It has failed people. Americans deserve compensation in the form of a 1% mortgage.”
They stressed the importance of making your voice heard so that your elected officials will get behind the 1% Mortgage Solution concept. “The people have to make this happen,” they concluded.
Learn more details about the solution at onepercentmortgage.com or download the ebook. Stay informed by joining the mailing list and following the podcast. Then demand change by signing the petition.