Question: I have been reviewing past dictations focused on the economy and I came across a passage from Mother Mary that says: “The rise in real estate prices is the systematic way by the big banks and mortgage companies to steal the value of people’s labor. But certainly, my beloved, when the price doubles on a house, well the amount of interest that the buyer has to pay during the paying back of a 30-year mortgage does not simply double, it goes up exponentially.” Surprisingly, this statement is factually incorrect. When the price of the home doubles and the mortgage amount doubles, the amount of interest paid during the life of the mortgage also doubles. It does not go up exponentially. This may seem like a picky question but it may be uncomfortable to find a clear error in a dictation. Could Mother Mary address this? Does she need to correct the statement or do I need to expand my understanding of what she said?
Answer from Kim Michaels. This answer was given during the 2024 New Year webinar.
I will just comment on this. I can see that I did not get the wording exactly as she wanted it. This happens sometimes in a dictation where there is kind of like a flow in a dictation. As the words are literally coming out of my mouth, I can feel I did not quite get what the master wanted to say but I can not stop and correct it because the flow goes on. In this case, I just apparently did not see this and so I have not corrected it. But I will make a note. What actually she meant is this. It is not just that as real estate prices go up, the interest goes up. It is also that the mortgages have become longer and longer. And you can go out there and you can find these mortgage calculators on the internet and you can play with this. I just did a very quick experiment. And this is not an unrealistic experiment, by the way. Some places in the US, for example, the East Coast or the West Coast, you can go back 40 or 50 years and there is a particular house that cost $50,000 at that time. Today, the same house will cost $200,000. The same house. That is how much prices have gone up and some places have gone up even more.
Just as an example, let’s say that you took out a $50,000 mortgage 40 years ago. Back then, a lot of mortgages were 15 years or 20 years. If you paid back the $50,000 in 15 years and the interest was 5%, you would pay $21,000 in interest on that loan of $50,000. On the half of the loan, you would pay interest. If you took out a mortgage today for the same house at $200,000, most people could not afford to pay that back in 15 years because the monthly payment would be too high. Because people’s salaries have not gone up four times. They take a 30-year mortgage instead and if you financed $200,000 for 30 years at 5% interest, the interest you will pay during those 30 years is not $21,000 but $186,000 in interest. Almost as much as the loan amount and that is what she means. That people today are paying a far bigger percentage of their income in interest to the banks and mortgage companies than they were 40 or 50 years ago. And that is what steals the value of people’s labor because of course salaries have not gone up as much.
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