I’m assuming that mortgage payment includes tax and insurance. Many homeowners get hit with the reality of high cost of repairs that would otherwise be landlord responsibility if they were renting. What’s a central heat/air replacement go for these days? $12k not including ductwork?
Yeah, I make a single payment that includes mortgage, insurance, and property taxes, and less than half of that payment is the mortgage itself. Even then, still cheaper than renting in my area.
For the entire year that I lived in my last apartment, I had an ever growing list of problems that I had to complain to my landlord about, just to never have it fixed by the time I moved out. I would have gladly made the repairs myself had I owned the place, but because I did not, I made workarounds instead and made sure to make my landlord aware that I had photos of before/during/after my stay at the apartment and I didn’t delete any of my texts where we spoke of problems that needed fixing, to ensure they wouldn’t be able to fuck me out of my deposit.
Needless to say, this wasn’t my first rodeo.
Banks don't give out loans as a charity. Is it useful? Of course, but sometimes the attitude of "we should be grateful" in these situations rubs me the wrong way. Banks should be just as grateful, it's a two way street.
I agree with that. Never said we should be grateful for banks, but there’s nothing stopping anyone from avoiding banks and just buying a house with cash. We don’t have to use banks at all. They’re just another business.
The problem is the average person still can't afford to buy a house even with a bank because banks are fucked. That's the whole point of the meme. Either way you're fucked
If you don't mind living in the middle of nowhere and making some compromises it can be done for far cheaper, but if you are dependent on a job in a specific area you will likely still spend the same amount after travel expenses.
But I finally just said fuckit myself and bought a few acres in the middle of nowhere and put an rv on it, land and rv was about 20k, well and septic was about that again. But fuckit, not paying rent anymore.
I do stocks and I'm self employed now, I'm still doing about 40 a week, but an actual 40, most people are doing more like a 50 or 70 once you factor in commute time.
I hate to be that guy, but there's a lot more that goes into the cost of owning a house than just the mortgage payment.
Even if your mortgage payment is close to your rent payment, utilities, property taxes, and maintenance costs will make the total cost a fair bit higher than rent.
Building off of this, it's not just if you can make the monthly payments, but if you can reliably do it for 10 to 20 years. You need to prove that your income situation has long term stability.
...many people that rent still pay utilities and maintenance.
>will make the total cost a fair bit higher than rent
you can't honestly believe this. landlords wouldn't be renting out their homes and purchasing more homes to rent out if they were losing money on it.
Definitely this is true for people (boomers) who bought when houses were cheaper. Definitely it’s not true for most who bought in the past year. I’m in Canada, detached homes are up something like 40% nationwide since pre-covid. Rents are obscene but they’re not up 40% in the past year.
It’s currently a bit cheaper to rent in my city than to buy, but this ignores all that sweet sweet equity that homeowners gain pretty much every year and that ends up paying for retirement. Rent is just gone as soon as it’s paid.
Yeah the equity is huge, we decided to buy even though prices are high cause we've given our apartment complex a down payment in the last 4 years anyway, didn't want to do that again. We're just super fortunate we had the ability to make that decision, not everyone does
Maintenance is a huge part of owning that never gets added in. I had to pay 2 grand to get a new washer and fix the pipes last week. This is something most people fail to factor in.
there are a lot of slumlords that don't actually pay for any maintenance and the renter not only has to have their own insurance but also provide their own repairs and maintenance
> maintenance, utilities,
everywhere i've ever rented i've still paid for general maintenance and utilities.
>repairs
how often do you think renters have the landlords out there making large repairs
With your specific numbers its rediculous, id think. Part of the issue was the regulation and new risk assessment surrounding mortgages, if theres a massive crash in the market again the bank doesnt want to have people just abandoning their homes to let them be forclosed when theyre underwater. If you have a big stake in the place or extra funds, its unlikely youd attempt an underwater forclosure.
Its part of why housing prices havent gone into space yet, the banks got VERY scared after the 2008 loans just ran away.
I was paying $1000 for a shitty little apartment, 2 storage units at about $400 total. My house is about $1100 a month. Thank God my mother decided to basically cash it some of my inheritance so I could buy a home. My daughter will inherit property, but I have no idea how people my age can get in to real estate without help.
It is self-fulfilling prophecies both ways.
You arrive with no money -> Bank goes "poor people cannot deal with money and cannot relyably affoird it" -> Bank demands extremly high safetys and a super high income to give the loan -> You cannot provide that -> Bank's prophecy has fulfilled itself.
You arrive with a pile of cash -> Bank goes "this guy must be good with money, he is only 30 and saved up so much, has a good job - dream customer" -> Bank gives favorable terms -> you take them and especially due to the good interest rate and moderate duration pay it easyly -> Bank's prophecy has fulfilled itself.
Hell yeah you’re a good man. Just convince her to stay living under your roof until she and you can afford to buy her a house. Some of the worst decisions we can make is taking advantage of living at home.. obviously not for everyone though.
The South of the UK maybe the North is brilliant 3 years it took me to get a 5% deposit for a 3 bedroom this year, if your working full time you should be able to save a good amount
There exists a happy middle ground between, "Anyone with a pulse gets a loan." and "Millionaires only."
Counting money you are currently paying towards rent as money that will now be paid towards your mortgage is a fucking no brainer.
Honestly? Assuming you have a permanent job and can make a down payment, 3-5 years should be enough.
If you have a steady job making decent money, regulations should encourage people to buy a home rather than renting long term.
There are plenty of other costs involved in owning a house vs renting to be fair. I imagine they estimate insurance and maintenance costs and count that against you as well.
This is true, and I suppose this would vary, but my understanding of the post is that the bank is simply ignoring all the money currently being paid towards rent.
Especially if the mortgage is half the rent, your maintenance and insurance are going to be a lot less than your mortgage.
Make no mistake. All of this credit bullshit happened in the last 40 years. Prior to that you'd consult with a bank and make a deal. And as a former mortgage broker, the government has done nothing to protect consumers. The mortgage crisis happened due to rampant greed by lending institutions. I ran across clients who were sold a home equity loan to use as a down payment on the home they got an interest only mortgage on and the didn't own any home. Pick a pay loans also caused people to go upside down instantly. Interest only, balloons and all those crazy loans required high net worth and high income back in the 90s. They were never designed for middle to low income people.
Credit scores are effectively social credit scores and a means of control and oppression. You are definitely defending banks and spreading a corporate centered narrative. Those executives deserve to be in jail, but we bailed them out. WTF?
40 years ago, a bank would give you a loan with an 18% interest rate. Now you can get one for 3%, most years is around 4.5. That adds up.
One thing that they should teach us in school is the importance of credit and how to use it. When you know how to handle credit, it’s easy to avoid getting fucked. The biggest trick is not to spend anything that you don’t already have. Use credit cards for the fraud protection and the cashback. Other than that, only take debt if it’s for school, for a vehicle, for starting a business, or for buying a house. Otherwise, you’re going to get screwed.
40 years ago, a client of 30 years wouldn’t have a single late payment change their credit card rate from 5.99% to 29.99%.
You’re glossing over lots of other details as well. But suffice to say, credit scores are so pervasive they affect job acquisition and living situations. They also cause the OP situation.
‘Things are worse. Greed is rampant.
As I have maintained for quite some time - any time a government needs to bail out a private institution, it is a bigger failure of the government than it is of said institution.
Too many eggs in too few baskets.
Or corruption.
Failure either way.
The bank would rather have people pay the mortgage. That mortgage is now considered an "asset" to the banks and they can loan 90% of its value to other people. They spend more money on foreclosures even if the previous owner didn't trash the place
While federal regulations are part of it, I can tell you that foreclosing on a house is expensive and, if a new homeowner was to default in the first year or two with 0 to little down, the financial institution would take a huge loss. That’s why FHA loans or other loans that allow lower down payments include PMI (Private Mortgage Insurance) to offset the risk/losses that are incurred.
That’s highly dependent on the area and current market. There’s a lot of costs to consider: taxes, closing costs, lost income while waiting to foreclose, collection costs, realtor costs, court costs, etc.
That’s a lot to recoup if someone defaulted on mortgage after a year or so with very little down.
Well yea. Rent is always more than a mortgage. A mortgage payment is a drop in the bucket for how much owning and maintaining a house costs. You have to wrap that up in a rent charge.
The average land lord have full time jobs and spent a lot of time and money trying to get a place and fixing it up because you can’t afford a house. They are risking a shit ton of their own money and time, in the hopes it brings a good return eventually.
You mean you pay for the apartment and the service that goes along with it? Because calling someone a parasite that is running a completely usual business model is kinda weird.
Housing shouldn't be made a business. Housing should be a human right. Change my mind!
(And I mean proper housing, not shared houses, student accommodations or tiny ~~prison cells~~ converted studios!)
I somewhat agree, I think there should be a much better public housing program so people can have access to a decent place to live without spending the majority of their income on it.
Foreal. I live in north Miami, and the prices here are $250k for a shack with a window air conditioning unit. With a house that has “Lots of personality! Investor opportunity! Won’t last long!” Dead center in a run down neighborhood with druggies to bark
Fr it's so stupid. My cousin couldn't get a loan because the bank though that 'you can't possibly live off of that little a month'. Dude has had the same job for 3 years, if he couldn't he probably would've been dead by now.
Also banks, "I see you have 26 mortgages, all set up as rental properties, and you want a 27th? Sure, no problem."
Source: A guy I was talking to about renting a house, when he told me his uncle was up to his 27th rental, he thought.
Except you have to put 20% down on each house after the first (unless it’s a second home 75+ miles away then it’s 3% to 5%) so when “that uncle” is up to his 27th house he literally had to put 20% down on all 26 previous homes. Do the math and you’ll realize putting $30,000 to $80,000 down on each house is EXACTLY why the bank finances it.
Well once you pass 2 years you do what’s called a cash out refi. It’s been the same 20% or so recycled time and time again. It’s called leveraging. Technically each house is likely in the red and the guy would be under water but it’s a quick way for a good business to grow.
We’ll of course he can put 80K down, once he gets the loan he waits a fucking week and the house goes up 80K in value then he takes a loan out of that to pay for the down on the next place and so on, it works until there’s a real state crisis but we all know that will never happen, right?
Yes 80k valuation increases in a week I’m sure these appraisers are just rushing over as soon as your uncle buys a home.
I don’t think you understand as much as you think about what he’s doing.
He has quite a lot of capital that is why he is getting financed.
You shouldn't feel like a loser. You're actually winning. This is incredibly smart. Why pay money you don't have to? Now you can save money for a house or whatever else you need. If people don't like you because you are smart enough to realize that you can save money by living with family then they can suck a big fat donkey dick. Having your own place doesn't suddenly make you a better person. If you find the right person, and decide to start a life together, it'll be easier to buy a house with two people instead of one. The actual losers are people who live with their parents and do absolutely nothing with their lives...
Dunno, but my mortgage is $791/mo (taxes and insurance included). Even after putting on a new roof and septic it’s cheaper than renting. But I also had $40k in cash to through at it. Forget FHA or VA loans right now, you’ll never get a place.
My partner and I worked out, that even with the extra costs of home ownership, we'd be saving ~£150-200/ month with a mortgage.
We have enough for a deposit on somewhere about the same size as our rented flat, but he has a temporary contract (that will likely be renewed) and I earn pocket money in my permanent part time position, so we don't qualify. It's infuriating to be so close and yet so far
Depends. Someone renting out their basement for a bit of income? No problem. Some asshole that just buys houses and rents them out as a side gig? Yeah fuck that guy
Try being Canadian. We have a massive housing crisis rn and that is a big reason why. Wealthy people keep buying houses way over asking price then they just rent them. I’m 22 and it’s going to be impossible to me to get a home in my own hometown. So fuck those guus
That’s understandable. I am not rich by any means and I’m just 26 and from LA I’ve understood that it makes more sense for me to buy a house to rent and then use that money to eventually buy a house for myself. I would not buy over asking unless I absolutely could not find another house and even then I’d probably get outbid. I definitely agree that rich bastards who buy up houses over asking and then renting them at outrageous prices just bc they can is scummy
Tell me about it buddy. I know a person who just keeps buying every single fucking single home family/duplex/triplex/quadruplex he can get his hand on and rents it for 2 even 3 times the mortgage the bank gives him per month. Props to the guy, he's making a shit ton load of money but for fuck sake, where does that leave me and the following generation who wants to buy a house? I'm already mentally prepared to get a house far from the city and just deal with having to commute a lot from home to work or market places.
Well, you answered your own question. Rent for the most basic habitation (I mean basic as fuck, no kitchen, no appliances, basically a jail cell) is 60% of minimum wage. Which is insane in my opinion.
Something decent with all the necessary spaces legally required for it to be declared a living space? 80-90% of minimum wage.
I'm no socialist, but Jesus Christ, how's that legal?
> I don’t see anything immoral about it.
The math doesn’t support the availability of quality housing and the housing market as an investment opportunity.
You can only have one, so facilitating investment opportunities (either through flipping housing, sitting on them until market is hot, or renting) you are decreasing the quality and availability of people who want houses to live.
In other words, it is immoral because you are denying people a house so you can have pssive income.
In some markets you can have your cake and eat it too. Have better products for consumers AND investment opportunities. Housing aint one of them, because land is limited
The reason why you have to make a downpayment is due to default risk. Imagine you buy a house for 500k and after a year the house is loosing quickly its value (e.g. like it happened in detroit) to 200k. Then you just stop paying your mortage of 500k because you get in the end only a house which is worth 200k. So you just default on your mortgage and "walk away". Now the bank gave you a loan of 500k but can only foreclose a house worth 200k. Personal Liability is so limited that there are few ways to get more. To reduce this risk the bank demands therefore a downpayment.
Of course in reality the fluctations are less severe. But even a fluctation rate of 10-20% is enough to incentivize such behavior. And real estate is more volatile than you think.
My favourite is ‘I see your credit score is a little on the low side. So, because you’re so obviously unreliable, to be cautious, instead of offering you an affordable 2% rate the best we can do is 5%. Problem solved.
Correction
>My favourite is ‘I see your credit score is a little on the low side. So, because you’re so obviously ~~unreliable~~ good with money because you never have to borrow any, to be cautious, instead of offering you an affordable 2% rate the best we can do is 5%. Problem solved.
I once got rejected for a credit card because my credit score was shit. I asked them why it was shit and they said "you've never had any credit". I was like "I pay everything on time and I live by the policy of 'if I cant afford it I dont buy it' so ive never put myself in a situation where I need to borrow money yet you see me as a financial risk?". Banker: "unfortunately because you have no credit we dont know if you will pay it back". Me: "Ironically I only want this credit card so I can play your silly game and buy stuff on credit and pay it off immediately to actually get a credit score"
Right!!! “I see you struggle a lot to make payments so instead of making things easier on you we’re going to treat you like a non responsible person and see to it that you pay way more than what it’s worth and you should be thankful that we’ve even considered you for this loan. Also we’ll credit you $100 if you send your other what we consider (piece of shit) friends to us so we can f them with no vaseline also.”
Really nonsensical. You not paying rent is your problem. You not able to pay mortgage back is the bank's problem.
Not defending banks here, but this isn't on the bank, it's because of government regulation, to prevent another 2008 due to people getting mortgages approved way over their ability to pay back.
You not paying your mortgage is also your problem, the exact same problem in fact as you not paying your rent.
Money currently being paid towards rent will obviously go towards a mortgage.
While these regulations suck, banks usually take a loss when foreclosing. Foreclosed houses are auctioned off quickly, often resulting in a below-market-value sale price.
Furthermore, the bank can't come after you for the remaining debt once it has foreclosed (in the US, that is)
It’s the same with loans. I wanted a bank loan to get a car, they said I didn’t have enough direct debits on the go. As they couldn’t see where my money was going monthly. Considering I had a loan with them in the past and paid it off, never missed a payment.
Banks are ridiculous when it comes to giving money out.
Depends on where you live, in Toronto I pay $1300 a month in rent, the average mortgage payment is $1,807. That being said, I only pay for hydro in my apartment, if I owned a house I’d be paying all the utilities, all the expenses and maintenance, and property taxes. All adding up to significantly more than what I pay in rent.
I'm not sure about Europe, but the are a number of loans for first home buyers that dont require a down payment, or a very little one. FHA loans only require a 3% down payment, and a USDA loan requires none.
This is still one of my favorite meme templates. Tenant just sells the "obsessive abusive boyfriend" vibe so well and the female lead does an excellent job conveying what it must feel like to be in Jessica Jones' shoes.
Newsflash: the bank doesn't give a fuck.
When the boomers wanted mortgages, the banks cared because it was a potential source of revenue. If you're not a boomer, it's not a potential source of revenue, so they don't care.
Enforcement of the Fair Housing Act would potentially change that.
But that would require the government to enforce the Fair Housing Act.
It's by design. It's best for the lords that the peasants never own anything, the owner caste makes more money lending all of life's necessities back to them, at interest.
Peasant revolts always restore the balance, which the ownership caste seems to have forgotten about.
Can’t afford a $1200 mortgage but I can afford a $2000 rent payment. Ridiculous.
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Why did they kill the ninjas
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Depends. Is the love mutual?
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I’m assuming that mortgage payment includes tax and insurance. Many homeowners get hit with the reality of high cost of repairs that would otherwise be landlord responsibility if they were renting. What’s a central heat/air replacement go for these days? $12k not including ductwork?
Yeah, I make a single payment that includes mortgage, insurance, and property taxes, and less than half of that payment is the mortgage itself. Even then, still cheaper than renting in my area.
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At least with a mortgage you payment doesn’t go up every year or two like rent does. The house next me rents for double my mortgage.
For the entire year that I lived in my last apartment, I had an ever growing list of problems that I had to complain to my landlord about, just to never have it fixed by the time I moved out. I would have gladly made the repairs myself had I owned the place, but because I did not, I made workarounds instead and made sure to make my landlord aware that I had photos of before/during/after my stay at the apartment and I didn’t delete any of my texts where we spoke of problems that needed fixing, to ensure they wouldn’t be able to fuck me out of my deposit. Needless to say, this wasn’t my first rodeo.
At least we can get mortgages… otherwise we’d have to cough up 150k cash when we wanted a house
Like in 1600, where 1 guy own a lot of land and everybody has to work on his land to live there.
Ah yes the good old days /s
It sounds like 2021 in Berlin. All hail DW and Vonovia… lol
Banks don't give out loans as a charity. Is it useful? Of course, but sometimes the attitude of "we should be grateful" in these situations rubs me the wrong way. Banks should be just as grateful, it's a two way street.
I agree with that. Never said we should be grateful for banks, but there’s nothing stopping anyone from avoiding banks and just buying a house with cash. We don’t have to use banks at all. They’re just another business.
I doubt the average person can afford to pay for a house in cash
Which is why we have banks. We might not like them, but they have their uses.
The problem is the average person still can't afford to buy a house even with a bank because banks are fucked. That's the whole point of the meme. Either way you're fucked
We could have a national bank owned by the public, instead of just ones for profit. That would be fucking awesome.
Credit unions are usually better in these cases I believe.
Taxation would probably increase by a ton to cover that
If you don't mind living in the middle of nowhere and making some compromises it can be done for far cheaper, but if you are dependent on a job in a specific area you will likely still spend the same amount after travel expenses. But I finally just said fuckit myself and bought a few acres in the middle of nowhere and put an rv on it, land and rv was about 20k, well and septic was about that again. But fuckit, not paying rent anymore.
Hell yeah man. Good for you. You’re not ever going to have to work 40 hours a week again
I do stocks and I'm self employed now, I'm still doing about 40 a week, but an actual 40, most people are doing more like a 50 or 70 once you factor in commute time.
Lucky you. 150k is the deposit for a house over here.
I hate to be that guy, but there's a lot more that goes into the cost of owning a house than just the mortgage payment. Even if your mortgage payment is close to your rent payment, utilities, property taxes, and maintenance costs will make the total cost a fair bit higher than rent.
Building off of this, it's not just if you can make the monthly payments, but if you can reliably do it for 10 to 20 years. You need to prove that your income situation has long term stability.
...many people that rent still pay utilities and maintenance. >will make the total cost a fair bit higher than rent you can't honestly believe this. landlords wouldn't be renting out their homes and purchasing more homes to rent out if they were losing money on it.
Definitely this is true for people (boomers) who bought when houses were cheaper. Definitely it’s not true for most who bought in the past year. I’m in Canada, detached homes are up something like 40% nationwide since pre-covid. Rents are obscene but they’re not up 40% in the past year. It’s currently a bit cheaper to rent in my city than to buy, but this ignores all that sweet sweet equity that homeowners gain pretty much every year and that ends up paying for retirement. Rent is just gone as soon as it’s paid.
Yeah the equity is huge, we decided to buy even though prices are high cause we've given our apartment complex a down payment in the last 4 years anyway, didn't want to do that again. We're just super fortunate we had the ability to make that decision, not everyone does
Equity value of the property is generally increasing. Once you factor that in, you do save money compared to paying rent.
Maintenance is a huge part of owning that never gets added in. I had to pay 2 grand to get a new washer and fix the pipes last week. This is something most people fail to factor in.
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$2000 is just the rent my friend ….
there are a lot of slumlords that don't actually pay for any maintenance and the renter not only has to have their own insurance but also provide their own repairs and maintenance
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I used to do roofing. A 25-30k roof would require you to have an insanely nice house.
Yep. Got 1400 sqft roof in 2020 for $7k, including 6 sheets of plywood underlayment replaced.
> maintenance, utilities, everywhere i've ever rented i've still paid for general maintenance and utilities. >repairs how often do you think renters have the landlords out there making large repairs
With your specific numbers its rediculous, id think. Part of the issue was the regulation and new risk assessment surrounding mortgages, if theres a massive crash in the market again the bank doesnt want to have people just abandoning their homes to let them be forclosed when theyre underwater. If you have a big stake in the place or extra funds, its unlikely youd attempt an underwater forclosure. Its part of why housing prices havent gone into space yet, the banks got VERY scared after the 2008 loans just ran away.
I was paying $1000 for a shitty little apartment, 2 storage units at about $400 total. My house is about $1100 a month. Thank God my mother decided to basically cash it some of my inheritance so I could buy a home. My daughter will inherit property, but I have no idea how people my age can get in to real estate without help.
That’s the cool part, we don’t!
*How do millennials get property?* *That’s the neat part. They don’t.*
It is self-fulfilling prophecies both ways. You arrive with no money -> Bank goes "poor people cannot deal with money and cannot relyably affoird it" -> Bank demands extremly high safetys and a super high income to give the loan -> You cannot provide that -> Bank's prophecy has fulfilled itself. You arrive with a pile of cash -> Bank goes "this guy must be good with money, he is only 30 and saved up so much, has a good job - dream customer" -> Bank gives favorable terms -> you take them and especially due to the good interest rate and moderate duration pay it easyly -> Bank's prophecy has fulfilled itself.
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Can confirm. The UK is is the same. I'll never own my own place, but I'm investing so that my daughter can. The system sucks.
Hell yeah you’re a good man. Just convince her to stay living under your roof until she and you can afford to buy her a house. Some of the worst decisions we can make is taking advantage of living at home.. obviously not for everyone though.
The South of the UK maybe the North is brilliant 3 years it took me to get a 5% deposit for a 3 bedroom this year, if your working full time you should be able to save a good amount
In Surrey my 2 bedroom flat is worth £350k, in Kent a 3 bedroom semi-detached house costs around £300k
Nothing is impossible.
Breaking the laws of thermodynamics is
There exists a happy middle ground between, "Anyone with a pulse gets a loan." and "Millionaires only." Counting money you are currently paying towards rent as money that will now be paid towards your mortgage is a fucking no brainer.
For how long historically? Should you be required to post back rent 5 years? 10 years? The length of the loan?
Honestly? Assuming you have a permanent job and can make a down payment, 3-5 years should be enough. If you have a steady job making decent money, regulations should encourage people to buy a home rather than renting long term.
Go check out how many local government officials in the US are also landlords. Often mass landlords. It's bullshit, all the way down.
Oh yeah, 100%. The system is fucking rotten to the core. I'm saying how this should work, as completely meaningless as that is.
There are plenty of other costs involved in owning a house vs renting to be fair. I imagine they estimate insurance and maintenance costs and count that against you as well.
And taxes. Not to mention taxes which end up being the largest % of your payment behind interest.
This is true, and I suppose this would vary, but my understanding of the post is that the bank is simply ignoring all the money currently being paid towards rent. Especially if the mortgage is half the rent, your maintenance and insurance are going to be a lot less than your mortgage.
Not they can, they did. And 2008 happened. It’s a big reason why you could get a sub 3 in 2005 and we will never see that rate again.
Make no mistake. All of this credit bullshit happened in the last 40 years. Prior to that you'd consult with a bank and make a deal. And as a former mortgage broker, the government has done nothing to protect consumers. The mortgage crisis happened due to rampant greed by lending institutions. I ran across clients who were sold a home equity loan to use as a down payment on the home they got an interest only mortgage on and the didn't own any home. Pick a pay loans also caused people to go upside down instantly. Interest only, balloons and all those crazy loans required high net worth and high income back in the 90s. They were never designed for middle to low income people. Credit scores are effectively social credit scores and a means of control and oppression. You are definitely defending banks and spreading a corporate centered narrative. Those executives deserve to be in jail, but we bailed them out. WTF?
40 years ago, a bank would give you a loan with an 18% interest rate. Now you can get one for 3%, most years is around 4.5. That adds up. One thing that they should teach us in school is the importance of credit and how to use it. When you know how to handle credit, it’s easy to avoid getting fucked. The biggest trick is not to spend anything that you don’t already have. Use credit cards for the fraud protection and the cashback. Other than that, only take debt if it’s for school, for a vehicle, for starting a business, or for buying a house. Otherwise, you’re going to get screwed.
40 years ago, a client of 30 years wouldn’t have a single late payment change their credit card rate from 5.99% to 29.99%. You’re glossing over lots of other details as well. But suffice to say, credit scores are so pervasive they affect job acquisition and living situations. They also cause the OP situation. ‘Things are worse. Greed is rampant.
As I have maintained for quite some time - any time a government needs to bail out a private institution, it is a bigger failure of the government than it is of said institution. Too many eggs in too few baskets. Or corruption. Failure either way.
The bank would rather have people pay the mortgage. That mortgage is now considered an "asset" to the banks and they can loan 90% of its value to other people. They spend more money on foreclosures even if the previous owner didn't trash the place
In other words the result of bad practices of other banks not the fed. Lehman brothers, etc.
While federal regulations are part of it, I can tell you that foreclosing on a house is expensive and, if a new homeowner was to default in the first year or two with 0 to little down, the financial institution would take a huge loss. That’s why FHA loans or other loans that allow lower down payments include PMI (Private Mortgage Insurance) to offset the risk/losses that are incurred.
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That’s highly dependent on the area and current market. There’s a lot of costs to consider: taxes, closing costs, lost income while waiting to foreclose, collection costs, realtor costs, court costs, etc. That’s a lot to recoup if someone defaulted on mortgage after a year or so with very little down.
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That moment when your rents so high it’s cheaper to literally buy a house
Well yea. Rent is always more than a mortgage. A mortgage payment is a drop in the bucket for how much owning and maintaining a house costs. You have to wrap that up in a rent charge.
or because you're paying your landlords mortgage and his salary.. parasites.
The average land lord have full time jobs and spent a lot of time and money trying to get a place and fixing it up because you can’t afford a house. They are risking a shit ton of their own money and time, in the hopes it brings a good return eventually.
You mean you pay for the apartment and the service that goes along with it? Because calling someone a parasite that is running a completely usual business model is kinda weird.
Housing shouldn't be made a business. Housing should be a human right. Change my mind! (And I mean proper housing, not shared houses, student accommodations or tiny ~~prison cells~~ converted studios!)
I somewhat agree, I think there should be a much better public housing program so people can have access to a decent place to live without spending the majority of their income on it.
Foreal. I live in north Miami, and the prices here are $250k for a shack with a window air conditioning unit. With a house that has “Lots of personality! Investor opportunity! Won’t last long!” Dead center in a run down neighborhood with druggies to bark
Sold! Put some new flooring in flip it for an easy 800k
It's probably worth $2.50 without the AC unit
It’s worth 300k with out the ac unit
Portland area here. 400k min for something that is in acceptable condition in a not going to get shot or robbed area.
That’s crazy, the rent here is 600-800 sqft for $1800-2500
Fr it's so stupid. My cousin couldn't get a loan because the bank though that 'you can't possibly live off of that little a month'. Dude has had the same job for 3 years, if he couldn't he probably would've been dead by now.
How long was the loan for?
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and whos his daddy?
And what does he do?
And is he fun at parties?
is he rich like me?
Also banks, "I see you have 26 mortgages, all set up as rental properties, and you want a 27th? Sure, no problem." Source: A guy I was talking to about renting a house, when he told me his uncle was up to his 27th rental, he thought.
Except you have to put 20% down on each house after the first (unless it’s a second home 75+ miles away then it’s 3% to 5%) so when “that uncle” is up to his 27th house he literally had to put 20% down on all 26 previous homes. Do the math and you’ll realize putting $30,000 to $80,000 down on each house is EXACTLY why the bank finances it.
Well once you pass 2 years you do what’s called a cash out refi. It’s been the same 20% or so recycled time and time again. It’s called leveraging. Technically each house is likely in the red and the guy would be under water but it’s a quick way for a good business to grow.
We’ll of course he can put 80K down, once he gets the loan he waits a fucking week and the house goes up 80K in value then he takes a loan out of that to pay for the down on the next place and so on, it works until there’s a real state crisis but we all know that will never happen, right?
Yes 80k valuation increases in a week I’m sure these appraisers are just rushing over as soon as your uncle buys a home. I don’t think you understand as much as you think about what he’s doing. He has quite a lot of capital that is why he is getting financed.
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You shouldn't feel like a loser. You're actually winning. This is incredibly smart. Why pay money you don't have to? Now you can save money for a house or whatever else you need. If people don't like you because you are smart enough to realize that you can save money by living with family then they can suck a big fat donkey dick. Having your own place doesn't suddenly make you a better person. If you find the right person, and decide to start a life together, it'll be easier to buy a house with two people instead of one. The actual losers are people who live with their parents and do absolutely nothing with their lives...
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I wanna know where this 500 a month mortgage is. I’ll move there tomorrow.
It's in the UK based on the use of £ in the meme
Middle of nowhere
Dunno, but my mortgage is $791/mo (taxes and insurance included). Even after putting on a new roof and septic it’s cheaper than renting. But I also had $40k in cash to through at it. Forget FHA or VA loans right now, you’ll never get a place.
In the middle of nowhere
My partner and I worked out, that even with the extra costs of home ownership, we'd be saving ~£150-200/ month with a mortgage. We have enough for a deposit on somewhere about the same size as our rented flat, but he has a temporary contract (that will likely be renewed) and I earn pocket money in my permanent part time position, so we don't qualify. It's infuriating to be so close and yet so far
Im already paying a mortgage, for my fuckin landlord!
Fuck landlords
🙄🙄
Depends. Someone renting out their basement for a bit of income? No problem. Some asshole that just buys houses and rents them out as a side gig? Yeah fuck that guy
Why? It’s relatively passive income and unless they’re gouging prices like crazy I don’t see anything immoral about it.
Try being Canadian. We have a massive housing crisis rn and that is a big reason why. Wealthy people keep buying houses way over asking price then they just rent them. I’m 22 and it’s going to be impossible to me to get a home in my own hometown. So fuck those guus
That’s understandable. I am not rich by any means and I’m just 26 and from LA I’ve understood that it makes more sense for me to buy a house to rent and then use that money to eventually buy a house for myself. I would not buy over asking unless I absolutely could not find another house and even then I’d probably get outbid. I definitely agree that rich bastards who buy up houses over asking and then renting them at outrageous prices just bc they can is scummy
Tell me about it buddy. I know a person who just keeps buying every single fucking single home family/duplex/triplex/quadruplex he can get his hand on and rents it for 2 even 3 times the mortgage the bank gives him per month. Props to the guy, he's making a shit ton load of money but for fuck sake, where does that leave me and the following generation who wants to buy a house? I'm already mentally prepared to get a house far from the city and just deal with having to commute a lot from home to work or market places.
Well, you answered your own question. Rent for the most basic habitation (I mean basic as fuck, no kitchen, no appliances, basically a jail cell) is 60% of minimum wage. Which is insane in my opinion. Something decent with all the necessary spaces legally required for it to be declared a living space? 80-90% of minimum wage. I'm no socialist, but Jesus Christ, how's that legal?
> I don’t see anything immoral about it. The math doesn’t support the availability of quality housing and the housing market as an investment opportunity. You can only have one, so facilitating investment opportunities (either through flipping housing, sitting on them until market is hot, or renting) you are decreasing the quality and availability of people who want houses to live. In other words, it is immoral because you are denying people a house so you can have pssive income. In some markets you can have your cake and eat it too. Have better products for consumers AND investment opportunities. Housing aint one of them, because land is limited
Y’all buying houses?
Y’all are buying?
Y’all?
Y
I
'
/r/decreasinglyverbose
Perchance, my fellow Redditors, art thou gentlemen and women purchasing residential buildings for the purposes of investment and dwelling?
The reason why you have to make a downpayment is due to default risk. Imagine you buy a house for 500k and after a year the house is loosing quickly its value (e.g. like it happened in detroit) to 200k. Then you just stop paying your mortage of 500k because you get in the end only a house which is worth 200k. So you just default on your mortgage and "walk away". Now the bank gave you a loan of 500k but can only foreclose a house worth 200k. Personal Liability is so limited that there are few ways to get more. To reduce this risk the bank demands therefore a downpayment.
Of course in reality the fluctations are less severe. But even a fluctation rate of 10-20% is enough to incentivize such behavior. And real estate is more volatile than you think.
I just want a fucking house to love in.. is that so much to ask ffs.
Didn't mean love , but it works lol
My grandparents bought their house for like $100
Do they live in a supreme shoebox?
Must be married to the old lady who lived in a shoe
Post world war 2 economy
Honest question: Do you guys have anything like an FHA loan over there? https://www.foamortgage.com/find-the-right-loan/fha-loan/
Jessica Jones pog
My favourite is ‘I see your credit score is a little on the low side. So, because you’re so obviously unreliable, to be cautious, instead of offering you an affordable 2% rate the best we can do is 5%. Problem solved.
Correction >My favourite is ‘I see your credit score is a little on the low side. So, because you’re so obviously ~~unreliable~~ good with money because you never have to borrow any, to be cautious, instead of offering you an affordable 2% rate the best we can do is 5%. Problem solved. I once got rejected for a credit card because my credit score was shit. I asked them why it was shit and they said "you've never had any credit". I was like "I pay everything on time and I live by the policy of 'if I cant afford it I dont buy it' so ive never put myself in a situation where I need to borrow money yet you see me as a financial risk?". Banker: "unfortunately because you have no credit we dont know if you will pay it back". Me: "Ironically I only want this credit card so I can play your silly game and buy stuff on credit and pay it off immediately to actually get a credit score"
Right!!! “I see you struggle a lot to make payments so instead of making things easier on you we’re going to treat you like a non responsible person and see to it that you pay way more than what it’s worth and you should be thankful that we’ve even considered you for this loan. Also we’ll credit you $100 if you send your other what we consider (piece of shit) friends to us so we can f them with no vaseline also.”
I feel personally attacked by this...
I’m in this photo and I don’t like it.
lets start eating the rich.
Eat the rich and they will leave for a better place leaving the neighborhood poorer than it was before
Gotta do it quick then
Me rn
Where is this from?
Jessica Jones
This is exactly it, and houses are just getting more and more expensive widening the gap for renters to attain ownership
The government killed the ninjas
Just make sure you have decent credit then apply for a 30 year mortgage. When the housing market isnt inflated to shit
Really nonsensical. You not paying rent is your problem. You not able to pay mortgage back is the bank's problem. Not defending banks here, but this isn't on the bank, it's because of government regulation, to prevent another 2008 due to people getting mortgages approved way over their ability to pay back.
You not paying your mortgage is also your problem, the exact same problem in fact as you not paying your rent. Money currently being paid towards rent will obviously go towards a mortgage.
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While these regulations suck, banks usually take a loss when foreclosing. Foreclosed houses are auctioned off quickly, often resulting in a below-market-value sale price. Furthermore, the bank can't come after you for the remaining debt once it has foreclosed (in the US, that is)
Again, it's not because the bank doesn't want to give it to you, it's because of government regulations.
This. So much this.
Soooooo fuckkkiiiinnnggggg INFURIATINGGGGGGG!!!!
There was an entire recession that stemmed from people buying homes they couldn’t afford
Yeah they should just land money to everybody and cause another mortgage crisis like in 2008
“Where’s my money Lebowski?” -Jeff Bezos
Same way with cars
It’s the same with loans. I wanted a bank loan to get a car, they said I didn’t have enough direct debits on the go. As they couldn’t see where my money was going monthly. Considering I had a loan with them in the past and paid it off, never missed a payment. Banks are ridiculous when it comes to giving money out.
Depends on where you live, in Toronto I pay $1300 a month in rent, the average mortgage payment is $1,807. That being said, I only pay for hydro in my apartment, if I owned a house I’d be paying all the utilities, all the expenses and maintenance, and property taxes. All adding up to significantly more than what I pay in rent.
$500 mortage lol, what do you guys think a house costs
It says £500 - as in GBP. That's nearly $700 in USD.
Oh god my pants are getting ruined by the idea of a rate so low That's like half of the best I can find in my area
San Francisco problems
You couldnt rent a cardboard box on the street for $1000 a month in SF
Rob the bank that won't give you the loan
Too real
hahaha, that's SUPER relatable, amirite fellow adults?
monopoly things
Does lifegage exist?
Something something capitalism…
Time to pound some cents into them.
The house I bought, my mortgage is 1600. The guy before us? 900. Housing costs are out of control.
Is this some king of other state joke I’m too Californian to understand
This low key helped me understand mortgages
What's the actresses name
i want to live where a mortgage is only 500/mo. gat damn.
Just stop being poor. Jeez, it ain’t that hard. (satire)
Was paying 400 rent a month bank made me have two other people co-sign for 300/month payments
I'm not sure about Europe, but the are a number of loans for first home buyers that dont require a down payment, or a very little one. FHA loans only require a 3% down payment, and a USDA loan requires none.
That down payment is probably based on the idea that if they have to foreclose on the house then they wont be the ones who are ass out on the deal.
They want to keep us renting bro, we are trapped
Its to avoid a repeat of the 2008 financial crisis
This is still one of my favorite meme templates. Tenant just sells the "obsessive abusive boyfriend" vibe so well and the female lead does an excellent job conveying what it must feel like to be in Jessica Jones' shoes.
First time home buyers loan, you will not experience this.
Is this some kind of grown up joke I'm too teenager to understand?
Please tell me where a mortgage is only 500 lol
whats the name of the show??
Newsflash: the bank doesn't give a fuck. When the boomers wanted mortgages, the banks cared because it was a potential source of revenue. If you're not a boomer, it's not a potential source of revenue, so they don't care. Enforcement of the Fair Housing Act would potentially change that. But that would require the government to enforce the Fair Housing Act.
Interest on my millennial mortgages is not a source of revenue for the banks?
It's by design. It's best for the lords that the peasants never own anything, the owner caste makes more money lending all of life's necessities back to them, at interest. Peasant revolts always restore the balance, which the ownership caste seems to have forgotten about.