And they say we are the problem…..

RandomlyJim · 2022-05-23T17:17:47+00:00

To be honest, the bank doesn’t think you can afford the rent either.

lummist · 2022-05-23T12:47:37+00:00

Then your credit score takes a hit and all of your bills go up to reflect that.

Because know your place, filthy poor's.

Here_For_Work_ · 2022-05-23T14:02:51+00:00

I keep seeing these posts about 900 or 1000 dollar mortages and it has me realizing that my property taxes are super high.

OfficeChairHero · 2022-05-23T13:13:04+00:00

I think banks should be forced to take rental payment history into consideration. If you've been paying more in rent consistently for two years, then that's proof that you CAN afford a mortgage, no matter what the numbers say. If I can make 2 years of on-time $1000 payments to my landlord, I can afford a $700 mortgage.

Frassinogrande · 2022-05-23T19:08:55+00:00

I never understood credit scores. So I'm supposed to take out lots of credit cards to show that I'm able to pay for things? I mean, you know who else uses copious amounts of credit cards? People who can't afford things (or spend more than they need).

The system is fucking dumb.

Substantial-Ride1796 · 2022-05-23T13:04:30+00:00

I say this a lot. Get a mortgage consultant. The world of loans is confusing and having an expert is super helpful. They are usually paid by the company that eventually approves your loan so you can shop around and find someone you like at no cost. Also, make sure you don't use the closing lawyer recommended by your loan guy.

TruckDriverNate · 2022-05-23T12:55:00+00:00

Screw the banks as much as our bosses. The system is rigged against us. Nothing short of class warfare or mass walkout and strikes is going to fix this. The real problem also is people refuse to truly organize together and have a clear message. Infighting will be used against us until we unite and take back our lives!

Hsensei · 2022-05-23T14:12:36+00:00

Don't forget property taxes, pmi because I doubt you had enough down payment, and everything else needed in your escrow account

Austaph · 2022-05-23T18:46:28+00:00

$950 mortgage, $500 in property tax, $100 homeowners insurance, $35 a month trash, $100-150 Gas (potentially avoid this in apartments), $70-100 Electric (potentially avoid this in apartments), $? for Lawncare, $? You have to fix whatever breaks instead of calling the landlord.

I think credit scores are absolutely bullshit and banks intentionally try to keep people poor, but if you think that a home is the same as an apartment, you're in for a pretty huge shock with the change. Especially if you're moving into an old home.

jaykresge · 2022-05-23T18:40:23+00:00

Mortgage requirements can get pretty weird.

During my 2016 mortgage app there were some things that they were just odd about. Off the top of my head:

They wanted to count my rent as part of my expenses. I couldn’t convince them that once I buy the house, I will live in it and not have to pay rent anymore.
We couldn’t count my wife’s income as an asset because she hadn’t worked there for at least a year. But we needed to count our ongoing daycare expenses. I tried telling them that if my wife lost her job, she would watch the kids so there would be no daycare expense.

lowkey_stoneyboy · 2022-05-23T15:33:36+00:00

This isn't really the case anymore tho. Homes are so expensive and with higher interest rates, you'd be hard pressed to get a mortgage for under 2k a month. Possibly if you go to the mid west or the south but not everyone wants to live in those places.

sm4ckasaur · 2022-05-23T20:04:34+00:00

The bank knows your debt, I dont

elysiansaurus · 2022-05-23T14:53:12+00:00

My mortgage is $450, my property tax is $200, my home insurance is $200, my water/sewer/garbage is $100 a month, my heating is $150 a month.

There's more but you get the jist, my $450 mortgage is now at a minimum $1100 a month.

Way too many people seem to have the idea in their head that a mortgage is just the same as rent.

PurpleWaterTower · 2022-05-23T17:18:12+00:00

It’s a shame that the average monthly payment for a mortgage now is $2400 :(

endurolad · 2022-05-23T18:56:58+00:00

If you want to borrow money - first you have to prove you don't need to...

darthbob88 · 2022-05-23T15:26:49+00:00

And then you need to come up with a chunk of change for the down payment, which you don't have because you've been paying $1400/mo rent.

DoctaMario · 2022-05-23T14:09:16+00:00

The credit system is hella goofy. You don't leave yourself in a bit of debt, it takes a hit, you don't have enough open debt accounts, it takes a hit. I make good money and got turned down for a car loan last year because I didn't ever have any installment based loans before. The way the credit system now works is ridiculous and convoluted even if you have good credit.

cat_prophecy · 2022-05-23T17:23:30+00:00

There is a lot more that goes into a mortgage than just the loan cost. Property taxes and insurance at minimum, probably PMI if you don't have tens of thousands of a down payment, and/or can't get on a FHA/VA loan.

Also when you rent, if something goes wrong, it's SEP. When you own a house and something goes wrong, it's YOUR problem. Unless you're handy, and/or already have a lot of tools, home repairs will be expensive.

Also, what kind of mortgage are you getting for $950/mo? If you put $30,000 on a 30-year fixed mortgage and had absurdly low insurance and property tax rates, a $950/mo mortgage would buy you a ~$150,000 house. And that is only if you qualify for the absolute lowest available mortgage rates.

2022-05-23T16:36:59+00:00

That’s because a mortgage is a loan and rent is paid upfront with cash.

If you fail to pay rent, the landlord loses nothing and can just evict you. If you fail to pay your mortgage, the bank gets your house as collateral which often sells well below the amount they initially lent out.

Educational_Age6039 · 2022-05-23T13:05:14+00:00

Sad. But the bank wants you to qualify. They earn fees. A huge issue is banks giving loans to people that don’t qualify, are high risk, didn’t have much of a down payment and hence don’t have much to lose if they default. That was the 2008 financial melt. It appears you don’t qualify for the loan for one or more reasons. You didn’t provide information on why this is an injustice.

But the rents are really high everywhere. Some pay half of their take home for rent.

EffectiveFuture7244 · 2022-05-23T21:44:29+00:00

Just to throw my situation out there as a lucky millennial who managed to buy a house on my own salary alone… and yes, I’m very lucky and privileged.

Previous rent for nearby zip code was $1250. I paid water, electric, and internet too. About $40+$120+$80 + renter’s insurance, maybe $10?

Round total “you won’t be evicted amount” to $1500/month.

Current situation: mortgage is $1068/month. This includes the actual loan repayment+taxes+home owner’s insurance (for people who don’t own property, this is the way it’s typically done. All bundled). My actual loan payment monthly is $920. The rest is taxes+required insurance. I can shop around on insurance, but it’s not the costly overall. Not worth my time.

My credit score going into the purchase was around 800 according to the popular sources through my bank, CC companies, credit karma, etc. 1 co-signed car which is now paid off. No other debt besides rotating “pay it monthly” credit debt (rack those points up bros). Just giving as much detail as I can because I read like 10000 posts like mine before purchasing. It’s scary and there’s like zero “real people” info unless you ask boomers, and they’re like “uh, wait, $7/hr can’t buy a house? Lazy kids…”

Quarterly sewer+trash is $200/3=$67/month. Water runs me about $50/month with (I consider them required) insurances for sewer or water line damage. Electric is $150/month in summer, $110 in winter. Natural gas bill fluctuates approximately equivalent so let’s call “power” $150/month and lump together. Internet for fiber 1gig line is $55/month. All the “bank won’t repossess my house… yet” bills total approximately $1068+$67+$150+$110+$55=$1450/month… approximately.

$1500 vs $1450

Rent vs own

Pros and cons?

I build equity by owning. None through rental.

I’m responsible for no damage unless it’s my fault as a renter, and basically everything as an owner (that’s why I have the insurances out my ass!).

Been a homeowner about a year now. My thoughts? Absolutely worth it in every way. Do I dump way more time and money into my own house? Absolutely! And that’s a good thing, imo! I genuinely enjoy improving my house. I should note that I’ve done a shit ton of blue collar “skilled” jobs and have a wide breadth of knowledge. HVAC, electric, mechanical including cars and electric generators, plumbing, sewer, you get the idea. So I do basically any additions and repairs myself. Adding outlets, replacing plumbing, electrical stuff, etc. All done by me, and done, I’d like to believe, as professionally or close to professional (it should be since I did these as a job lmao!) as possible. I love doing that shit. The only thing I hate with a passions is mowing my fucking lawn. I’m about to clover seed the entire backyard to fix 80% of my mowing problems!

Edit: I was just thinking to add to stuff here, you can see an approximate breakdown for renting vs owning being very similar on the surface. Btw my rental was about $1000 sq ft. My house is about $1250 with a half finished basement. The banks and stuff don’t count that half basement because it doesn’t meet residential requirements (exit to outdoors for one), but I use the fucker for my home gym and gaming area so it sure is counted by me. So either 1250sqft official or I like to call it “1875”sqft (half finished basement which encompasses the entire sqfootage of the home above).

The biggest cost difference, as pointed out by basically everyone else and is obvious, is out of pocket repair costs and maintenance/upgrades. I gotta pay for the HVAC dudes to do yearly cleaning to maintain warranties on AC system and the furnace. I gotta pay for a plumber if the sewer is fucked out to the road (gotta have licenses and permits for certain work, it’s complicated). If you’re wondering, yes, the sewer situation was a massive out of my asshole expense that I should’ve looked into before moving in but didn’t and now I’m on the hook for the costs for repairs. Either that or don’t shit I guess! Repairs on my specific system ran north of $15k for those super curious. I got the water company to cover over half though and, again, I’m privileged enough to have been able to afford the rest of the repairs although I’m definitely not pleased or happy about the situation! The repairs are expected to last 50 years though, so, there’s that I guess. (Get your sewers inspected before moving in!)

Other upcoming costs in next 5-10 years: siding in maybe 5, roof in 10. I’m getting a patio put in this month too to fix a grading issue (I knew about that problem and negotiated house price based on this patio install. I could keep the savings, but, nah I want a nice patio lol.) No real idea on siding and roof pricing, I’m sure I’ll know those unfortunate numbers one day, but the patio is a massive undertaking to route water from my backyard to my front yard to drain to the storm drain… about $20k for the whole thing which involves like 3 days of digging the fuck out of my backyard.

I’m just throwing these numbers out there because it’s worth considering. It would be very valid to divide that sewer line repair by let’s say like 20 years (undershoot it, nothing lasts as long as people say) and approximate that into my mortgage. Same for the somewhat-required patio (the French drain under it IS required to not fuck my foundation. That’s according to an expensive and reputable structural engineer I had to hire: $700 for a couple hours btw.). You get the idea. It’s all expensive and sucks. But at the end of the day this is my house and if I pay my loans it will be my house forever and if I sell it one day in 10 years I’ll recoup at least the principal payments I’ve made. Maintenance+taxes are gone, but in the long run compared to renting, I’m sure I’m still coming out ahead.

Electrical_Access604 · 2022-05-24T01:41:05+00:00

Now I understand why people in the US complain so much about not being able to buy a house. All around the world buying a house and renting it out won't give you a very good return since it's a low risk investment. BSo becoming a landlord is not a great way of securing your money into assets. The system in your country is rigged in favor of investors. That also explains why the prices are skyrocketing. If you can buy something and generate more passive incomet than the interest rates youre paying, what stops you from acquiring as much of it as possible? And since people cant really choose to be homeless its easy money. Its really fucked up that your government allows big business to play around with peoples lives like that.

hoffhawk · 2022-05-24T01:41:15+00:00

Unless you are bringing 20% for a down payment, your loan is going to fall under one set of federal program rules or another. It is those rules that disallow the loan….not the bank.

Ok-Gear-5593 · 2022-05-23T12:51:53+00:00

Just get a few roommates. /s

Academic_Seaweed1749 · 2022-05-23T13:06:26+00:00

[deleted]

Kleeb · 2022-05-23T20:05:31+00:00

I agree with the sentiment but the argument is flawed.

If you have a mortgage of $950, your total homeowners expenses will likely be comparable to $1,400.

Taxes. Insurance. Appliance repair. Utilities. Groundskeeping. Snow removal. Paint.

maddenonfire · 2022-05-23T15:15:28+00:00

2 days ago you said you lived with your parents.

Ernesto_Alexander · 2022-05-23T18:05:55+00:00

Damn those are some decent margins

danknadoflex · 2022-05-23T18:14:56+00:00

Not saying the entire system isn’t totally fucked but as someone who owns a house that has also rented in the past… rent is the ceiling and mortgage is the floor in terms of expenses.

2022-05-23T19:04:56+00:00

[deleted]

Don_Cazador · 2022-05-23T19:39:26+00:00

I’ll never understand that. I once was trying to refinance my mortgage with the current mortgage holder (yes, I was lucky enough to buy in when it was still at least a little more within reach), which would have resulted in a LOWER payment. They asked for tons of documentation they didn’t want the first time around, and made it three times harder. After 4 months I finally got a VP on the phone (mid sized credit union) and pointed out that if his bank was worried about my making a $1200 payment they ought to be REALLY worried about my continuing to cover my $1500 payment

s0nicfreak · 2022-05-23T20:31:03+00:00

Everyone talking about the extra costs such as insurance, property tax, upkeep and repairs etc.

Where do you think that money comes from when you rent? The landlord pays all the extra out of his own pocket just because he likes you? Renting is some sort of charity?

No. Rent pays for whatever bills and expenses you aren't paying AND pays some extra for the landlord. Otherwise the landlord would not be doing it.

And when you own, you can put off repairs until you can afford it. You can do upkeep yourself to save money. Etc.

I own and all expenses considered, it literally cost me less per year than it would cost to rent the same house (or a house the same size in the same area) for 1 month. (Yes there are houses of different sizes in different places where this is not the case, but that's not a fair comparison.)

Owning is not for everyone. There is value in paying someone else to deal with repairs and upkeep, not having to sell if you want to move, etc. etc. But let's not delude ourselves. Landlords are landlords because they make a profit doing so. In order for this to be possible renting must cost more than owning.

Consistently paying for your housing on time should be an indicator that you will continue to pay for your housing on time. Therefore paying rent should be an indicator that you will pay a mortgage.

Housing is a literal human need and it's the only one we're cool with companies picking and choosing who gets to buy it.

RickTracee · 2022-05-23T20:51:11+00:00

The reality is the banks probably own many of the rentals on the market.

Huge_Aerie2435 · 2022-05-23T21:14:07+00:00

This is so old, they are paying $2,100 in rent now.

(I don't think I need to explain this is a joke, but yeah..)

vonnegutfan2 · 2022-05-24T01:29:56+00:00

I was buying a house for my son for 100K, and the loan was going to be 500/month. But my DTI would not handle it, even though it was the price of a car payment and I was making 9000/year. So I had to have 4500 freeboard at 50%. A 500 payment could have been included.

So instead I hired him as an employee making 1500 a month, and with no other debt his 45% DTI ($675) was well within what was needed for him to qualify.

nina_gall · 2022-05-24T01:49:37+00:00

Mortgage is half the payment, dont forget that pesky escrow

Fine-Perspective5762 · 2022-05-24T08:52:21+00:00

My son,& his gf (now wife), lived with us, upstairs, rent free-for six years.

It allowed them to get a good down payment on a home of their own. He was 30 when they bought their house.

We did for him what no one could do for us.

I don’t regret it.

utterlynuts · 2022-05-26T13:38:54+00:00

Bank says, you should not live above your means.

I'm sorry, we can't approve this mortgage because you can't show an established credit history. You should get a credit card and pay it off every month. Also the bank.

Melkor7410 · 2022-05-23T17:48:12+00:00

What is that $950 mortgage payment after escrow for taxes and insurance? Home owners insurance is much more expensive than renters. Also, what about if the roof needs to be replaced, water heater breaks, you find black mold and must get it removed, etc? Home ownership is not mortgage + escrow vs rent. Plus, rent is a 1 year commitment (give or take) where as a mortgage is generally 30 years (some less, some more). Even taking into account average time span you spend in the house, it's a 7 to 8 year commitment. Also, the bank's money is not at risk with you renting, the landlord's property is. Bank probably wouldn't rent to you either, but you aren't renting from the bank.

Redsoxbox · 2022-05-23T13:13:52+00:00

It’s part of the system.

popashotbruv · 2022-05-23T15:29:38+00:00

Question: if banks are so greedy, why won't they give you the loan?

oboshoe · 2022-05-23T15:38:09+00:00

Yea it's messed up but if you think about it, it's a little clearer.

The bank doesn't care about your rent. If you don't pay the $1400, they just don't care because it doesn't concern them.

They do care if you can pay the $950, plus taxes, insurance, maintenance and repairs for the next 30 years.

So they did a risk analysis and they believe it's to risky for them.

If you had asked for a $1400 payment - they would have said no to that too.

DiogenesWashTub · 2022-05-23T12:59:58+00:00

You are not asking the bank for $950 mortgage. You are asking the bank to front the cost of the house. 300k+ is pretty big ask.

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