A conundrum
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Even just renting an apartment is full of bullshit.
"The apartment is $1300 a month."
"Perfect, I make $2000 a month."
"No. You're gonna need to make $3900 a month before we will rent to you."
you're not gonna be able to afford this apartment after a few years of 10% rent increases, and we don't want the inconvenience of evicting you when that time comes
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I saved up a big (to me) chunk a few years ago, thought I was there. Expected the red carpet to roll out. Nooooope. There were people buying houses for $100k more than the asking price, sight unseen, within a week or two of the house being listed. My little $40k deposit was adorable, in comparison. I had no chance. Then Covid, life, etc...
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The deposit is not to prove you can make the repayments.
Housing markets do, occasionally, go backwards in value.
If you have a loan for a house which is more than the value of the house you would have an incentive to just stop paying.
Thats why the bank needs a buffer, in the form of a deposit. Its not really nefarious.
you need to pay us interest because we're taking the risk. Also you need to give us a down payment to offset our risk.
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"Landlords" are probably one of the oldest grifts in the book.
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I went from an apartment that cost ~$1250/mo. To a mortgage that costs ~$4300/mo. Just got the "privilege" of owning a home (and paying for all repairs myself).
I can only afford this because of the people I'm sharing that cost with. We're all on the deed, and we all have a stake, and claim to, the house. Four of us.
My payment didn't really change.
The only way we could get to the point of a down payment is that one of the four of us has been saving for something like this since they were in highschool. Because of their effort, we had enough for a down payment.
And I'm lucky to be in this position.
What a fucking crock of shit.
Despite all of this, I'm hoping the market takes a dive so the rest of you can do the same at a much more affordable rate. I've already spent the money and I'll be spending years paying it off. I didn't buy a house up objectively save money, I bought a house for stability. I never want to move ever again. There are good reasons for that which I won't get into. I promise that I will have ZERO issues if you all get a better deal than I did. I hope you do, and I hope the housing market, specifically the rental/flipping/"income property" markets crash, hard.
In the same way, I've paid off my school debt, I'm in favor of school debt forgiveness. I also enjoy pretty good health, I'm in favor of universal healthcare. I've never caused, not been the victim of a fire, I'm in favor of fire departments.
I could go on.
Good luck everyone.
wrote last edited by [email protected]In the same way, I’ve paid off my school debt, I’m in favor of school debt forgiveness. I also enjoy pretty good health, I’m in favor of universal healthcare. I’ve never caused, not been the victim of a fire, I’m in favor of fire departments.
That's commie talk son. We pull the ladder up behind us in America.
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You live in Germany don't you
wrote last edited by [email protected]Is it a thing to find German mortgaging standards whacky?! I finally feel heard! Basically everyone here seems to pick up 35+ year mortgages with seemingly low monthly expenses, but the overall amount of interest they accumulate over that time is absolutely insane! And still, everyone says that you shouldn't pay more than 30% of your monthly income into your mortgage. It's hard to even find a bank that allows you to pay for a decent Sondertilgung each year. And don't even get me started on that whole Bausparvertrag system, because I have no idea what is going on with it or why anyone would ever do that
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Damn $4300 a month. I thought my $2600 was steep.
Right before we moved my rent had gone up to $2500 so it was a push. Now when we first started living there the rent was $1400 and the landlord had even refied so his mortgage was cheaper at the end. When we were moving out and he drove up in a brand new Rivian that I’m pretty sure I basically paid for…
Yeah, I went from $1200 rent to a $1300 mortgage but the city added $50k more value to the assesment so between taxes and insurance it's going up to $1700/mo next year so that's fun. I don't know how many more years of that I could afford cuz $2600 just isn't doable for me
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I never said it was free and I never said it wasn't a debt. Like obviously it is a debt, anyone that reads "tapping into home equity" as meaning free money doesn't understand basic finance.
It doesn't have to extend your mortgage. You can take it out as a second line of credit as an additional loan to pay back monthly. Obviously the ideal would be to have the savings to cover necessary home repairs, but if you don't this is typically the cheapest way to get a loan to do necessary maintenance.
Sounds like your sister used her equity to refinance her loan and recieved a payout for the difference. That's going to restart your mortgage and is probably not the best way to go about accessing home equity.
So yeah don't take on reckless debt you can't payback. You can responsibly use your home equity for maintenance if you need to though.
wrote last edited by [email protected]Second line of credit or mortgage, its still debt. The two are equivalent because you could also make more mortgage payments to pay it down quicker.
Your suggestion translates to "Don't worry about home repairs, just take on more debt to pay them."
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The first time I applied for a loan, I didn't have a credit card yet. And they were like:
How can we know you're responsible with money?
Because I haven't needed credit in the past and I'm still alive, idk? Having enough liquidity to not need credit would seem to suggest I'm good with money.
But maybe your parents are paying for everything
Ok? How does using a credit card change that?
Considering how much data they can get on anyone, this process seems pointless and outdated, except to give them somewhat arbitrary power over who can get a loan.
Not that I like such private data to be available at any institutions fingertips, but so it is these days. -
"Landlords" are probably one of the oldest grifts in the book.
Mao did nothing wrong.
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Second line of credit or mortgage, its still debt. The two are equivalent because you could also make more mortgage payments to pay it down quicker.
Your suggestion translates to "Don't worry about home repairs, just take on more debt to pay them."
wrote last edited by [email protected]Once again everyone knows that is debt. Of course it is debt. Once again if you don't understand that taking out a loan = debt you don't understand basic finance.
It just so happens to be the lowest interest form of debt you can take and even when added with an existing mortgage payment is still insanely cheaper than comparable rents for the same property.
My statement is "yes homes have maintenance and that can come at unexpected costs. However you can access low interest debt if you need to. And even if you do you'll still pay less than renting a comparable property for the same amount of time"
Please consider the whole and dont just take snippets out of context. Homes come with costs, still way cheaper than renting. You don't have to take out a loan for home maintenance. You can, but you don't have to.
One final note, debt doesn't necessarily have to be bad. You should never take on debt you cannot afford but if utilized wisely you can maintain cash reserves for emergencies and build your credit. Credit scores are made up bullshit, but it's a system that we're trapped in. With a better credit score you can get much better terms on certain things that we need to survive. It's better to take on a manageable debt that at least gives you some benefit than to dump your money into some landlords profit margin.
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Braindead take? This is just the reality of the situation for a lot of people
I know that it is why why would you be entitled to own a home just because you can make rent payments? Do you think the bank should give you a mortgage with $0 down? There are enough people buying who can save a down payment just fine
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Mortgage payments are almost never lower than rent unless you are seriously downgrading
Mortgage is lower than rent in BC but of course it is, you need like minimum $100k down payment to own
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My issue wasn't getting pre-approved, it was being able to actually afford the mortgage amount I was pre-approved for. A lot of these companies don't give a damn if you can actually afford the mortgages they offer, because they know you'll either figure it out or go homeless trying.
Yeah that was my experience as well. Mortgage companies were happy to pre approve me up to like 75% of my monthly income. Not even close to enough to buy even cheap food.
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"Landlords" are probably one of the oldest grifts in the book.
if you can't afford to own a home would you rather have no options to use one temporarily while you get back on your feet?
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Or any country with responsible lending rules.
Lenders are not your friends. They'd take your organs as payment if they were allowed. The rules are there to stop them doing bad lending and then hounding you to your death.
yes, as any good for profit company should
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Yes, if it fails, they will either repair or replace it at least.
so it's betting that the water company will get harder water
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I don't know how this works in US but where I live when you owe bank money they will simply garnish your wages and benefits. No one is defaulting on their mortgage to save money. That's just not a thing. I personally know people who were paying their mortgages for many many years even though their house was worth way less then the mortgage. You just suck it up and hope the price will eventually go up. If it doesn't it's still better then living on the street.
clearly you've never heard of under the counter income
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The first time I applied for a loan, I didn't have a credit card yet. And they were like:
How can we know you're responsible with money?
Because I haven't needed credit in the past and I'm still alive, idk? Having enough liquidity to not need credit would seem to suggest I'm good with money.
But maybe your parents are paying for everything
Ok? How does using a credit card change that?
wrote last edited by [email protected]They are NOT looking to see if you are responsible with money. They are looking to see if they can make money off of you, so they want you to be a heavy credit user. Before I bought my house I made sure to take out two credit cards and just buy random shit on them for a few months because that boosts my credit score drastically which then made it easy to get the loan. Banks HATE people with limited debt because it means you are not a loyal customer that they could make money off of. Yes, it makes no sense but that's just how the economy works. Even if you don't have any reason to buy things on credit, you still should. Even if you are very financially responsible, you should always have "stupid debt," by that I mean debt for the sake of debt, because banks love that shit and it'll help you out if you ever actually do need a loan for something.
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clearly you've never heard of under the counter income
That may work for some minimum wage jobs. No serious company is going to pay you under the counter. At least not in Europe. I'm not even sure what are you suggesting. You clearly don't know how any of this works in Europe.
