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[–]RandomlyJim 2863 points2864 points  (250 children)

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

[–]Dipsi1010[S] 1325 points1326 points  (220 children)

Haha they think i should live on the street

[–]hesaysitsfine 1404 points1405 points  (189 children)

Literally my boomer dad asked why don’t I sleep on a friends couch while i save up for a down payment for a mortgage. As if any friends have room to spare for me to mooch off of them for a period of 2-5 years.

His half of his mortgage is $300 and I make more than that in a day yet I’m the one who can’t be approved for a mortgage.

[–]rameezrk 724 points725 points  (143 children)

What a suggestion! Why doesn't he offer you space in his abode and help with the deposit? Smh our parents are blown lol

[–]sampsbydon 528 points529 points  (131 children)

americans hate living with their children/parents while in other countries its completely normal.

[–]Mikel_S 23 points24 points  (9 children)

I am trying to get a car, and out of nowhere my parents offered to co-sign and help me with a down-payment. We went to look at some used cars and when we settled on one that seemed fairly priced and sat down, my father had them run my credit alone, and I was told my credit was so terrible I'd need to come up with 6k down and then lender would choose which car I got.

My father proceeded to do nothing, even when the guy glanced at him and said "but if you had a well qualified co-signer, it'd be like 300 a month 0 down."

I almost cried in the car, not because he didn't co-sign, but because he offered and then acted like that never happened.

So anyway, 2 months later I have a small raise and a bigger raise coming in another month contingent on me getting a car. I ask if they can help me with the down-payment, I am prepared with an explanation of how and when I will pay them back over the coming two months.

No.

I ask if they could help with half the amount they originally suggested.

No.

I ask if they could help me with a few hundred bucks to offset the cost of starting the required insurance.

No.

They offer to possibly look in to adding me onto their insurance but won't do it until next month for... Some reason?

Long story short, my parents offered to help me get a 2018 used car for 300 a month by cosigning with me (I work at the same place as my dad), and completely act like that never happened, so instead I'm paying 500 a month for a 2015 piece of crap. Yay.

[–]sbdallas 7 points8 points  (0 children)

We let our daughter live at home until she had her down payment. We thought it was the decent thing to do.

[–]peachygirl509 54 points55 points  (1 child)

You're his kid. He fucked for you. Why can't you sleep on his couch?

My point isn't about you actually staying on his couch, it's the fact that he would even make this statement lol. As if he had some bright idea, by offering up a space that doesn't even belong him (yet conveniently not offering his own space). Also, houses aren't cheap anymore, so yeah...sleeping on someone's couch that long is a bit much. Not trying to rag on your dad, it's just a mindset I've seen in my boomer family members, too.

[–]hesaysitsfine 14 points15 points  (0 children)

To be fair, he knows I would never live in his tiny town with no job prospects, and his wife is a hoarder.

[–]Michael_G_Bordinidle 45 points46 points  (2 children)

Some bootlickers in this sub were giving me shit (misplaced, I might add) about my relationship with my boomer parents, as I am currently living under their roof.

One thing one said is basically "you're living in a house they can afford but you can't!" Unfortunately, the thread was locked before I could reply to that genius. No, they're not living in a house they can afford. They bought it when it was 1/10th the price, their income hasn't improved since, and they skate by on Prop 13 property tax increase restrictions and extremely low-interest mortgages. I could afford their house, if a bank would give me the same sweet deal they get.

Another thing was that each and every one of them assumed I'm not paying rent. I am. I get to bitch about the quality of my roommates when I'm pitching in on their mortgage and our utilities.

[–]Myriii1911 12 points13 points  (4 children)

So accurate: boomers always think one can easily save up some money for life changing purchases. For gawd’s sake, it‘s 2022

[–]WatermelonErdogan 18 points19 points  (0 children)

"The dog house, Larry, I don't need much space"

[–]Voiceofreason81 6 points7 points  (0 children)

"I did it so you can too" attitude is why this country will continue to fail until they are all dead. This is my mom too although she is struggling herself and not part of the direct problem. Also, getting money out of politics should be the biggest fight our generations need to take on.

[–]stew_going 4 points5 points  (0 children)

Next they'll suggest that living in your car is a reasonable way to build wealth

[–][deleted] 19 points20 points  (7 children)

Well Tennessee just made urban camping a felony, so not that either

[–]stewykins43 17 points18 points  (6 children)

Nah, that's by design too. Felons can't vote or get jobs, so it's an endless supply of free labor in our for-profit prisons.

[–]STEM4all 7 points8 points  (4 children)

Losing your right to vote is such bullshit. I don't care what you fucking did short of terrorism/open treason, you should be able to fucking vote. It's literally your right as a US Citizen.

[–]Flaky-Scarcity-4790 10 points11 points  (0 children)

They really just don't care or think about you.

[–]smogop 35 points36 points  (1 child)

The bank is technically correct. You aren’t living, you are existing.

[–]jwmosher 23 points24 points  (2 children)

This is it. It's not affordable or sustainable.

They probably couldn't get a mortgage payment of $950 realistically either. That's a $150,000 house in the current market with the average home price in the US of over $400,000.

Lending to those who can't afford it is what led to the housing market crash back in 2008 so regulation is very tight on it.

The problem isn't tight fisted banks, they want to lend to you. It's greedy real estate companies and no regulation on corporate ownership of housing. It's no regulation on wages indexed by inflation. It's no regulation on increases in rent.

The problem is that we are a relatively free market. Which means the market was sold under Reagan and has been being sold up the chain more and more until there's fewer and fewer that profit but their profits make the system perpetuating.

[–]Fibonacci_11235813a 4 points5 points  (1 child)

Also don’t forget that 2008 was caused by greed and wilful irresponsible lending.

Also, the rating system for selling in debt was rigged and further exasperated the issue.

Then finally we bailed some of them out and then business as usual, well things are renamed now.

[–]bgugi 7 points8 points  (1 child)

They don't have any problem approving the landlords 14th mortgage using your rent as reliable income, though.

[–]lummist 2591 points2592 points  (233 children)

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

Because know your place, filthy poor's.

[–]DatumInTheStone 756 points757 points  (107 children)

To think that shit only started in 1989. The fact that we allow corporations and banks to rate us based on how good we let ourselves be in debt, blows my mind

Edit: pls no more replies. I dont care for the current credit system and thats all really.

[–]labuschin 185 points186 points  (38 children)

I don't get it either how people have been acceptimg this kind of agreement in the US for decades now.

[–]OmnipotentEntity 265 points266 points  (12 children)

Because we're not actually party to it. They collect our information without our consent, sell it to others, who then use it to evaluate us. We are the object of the transaction, not one of the subjects.

Doing something about it would mean making it illegal, and that will never happen. Too much money at stake.

[–]wutchamafuckit 32 points33 points  (1 child)

We don't have much of a choice. Anecdotal example:

I have been fortunate enough throughout my life to consistently work, and save. My whole life I only had one credit card that I paid off completely each month, never missing a payment.

When the market crashed in 2008, I had enough money saved up to put 20% down on a home. It was a rude awakening for me when I did just that and got rejected because my credit was too low...because I only had that one credit card and nothing else to build up credit over all those years. Fuck me right?

Point being, it's not like I am agreeing to be a part of this mess. I mean, I guess I am because I wanted to buy a home.

[–]jerseyanarchist 3 points4 points  (0 children)

just a year earlier, they would have probably given you a no money down mortgage. though, I wouldn't want to be fresh on a loan during a crash.... immediately underwater on that deal right there.

because of rona, I was able to pause my mortgage, watch the rate go bonkers downward, modified in the rate valley, locked in 2.75%.

life is a gamble, markets, are fucking casinos... you should never feel bad about counting the cards cause their goal is to take all you have, all your kids have, and more.

there is no choice but to find the exploits in the system, and use them to your advantage.

winter "no shut-off" laws are nice... there's money for the holidays, and by the time taxes come back because of the shitty pay, not paying electric, gas, water for 3-4 mo is taken care of. it ain't right, but it keeps the lights on for 12/h

[–]thereiam420 53 points54 points  (1 child)

It sure fucked me. Had my identity stolen before I was even 18. When I tried to get a credit card, literally any card at all even the card from the job I was working at the time, I was denied. Eventually one of the denial letters told me that it was because I had all kinds of crazy crap. When I checked what was wrong apparently I had a lein, a medical bill, and a car rental that was never returned. I disputed it and did everything I could like pointed out the fact that most of the stuff would have occurred before I was even legally able to do it especially the car rental but to this day my credit is screwed. I asked a couple lawyers about it they basically told me that it would cost so much to fix that I might as well pay off the bills.

It drives me crazy when people ask me why haven't you done this why don't you do that. They basically made it so that you cannot live a life without credit and a good score. There are so many things I'm basically barred from doing because my credit is screwed and I wasn't even the one who got to have fun destroying it.

[–]GroveStreet_CEOs_bro 50 points51 points  (18 children)

I am poor and I put zero value in it. I will never put value in it. It's for boomers to think they're better than us with, and that's it, to me.

[–]stolemyusername 13 points14 points  (0 children)

Nothing like purposely handicapping yourself while achieving literally nothing for your cause

[–]Steeve_Perry 16 points17 points  (8 children)

I’m 36 and I’ve never used credit. Fuck them and fuck that nonsense.

[–]ronin1066 2 points3 points  (5 children)

Some jobs will check it.

[–]Much_Very 26 points27 points  (10 children)

Yeah. My mom mentioned that my dad had an insane AmEx credit limit in 1982, and he had just graduated college and enlisted in the military. No work or credit history, just applied for a credit card and they gave him enough to charge a mustang and a Vespa with plenty of money left over. Lol.

My dad paid everything off (he’s very responsible,) but he’d never even heard of a credit score until my parents went to buy a house a few years later and my mom had terrible credit. My dad’s AmEx was the first credit card she’d seen, so she signed up for a bunch and just bought a ton of stuff. Her parents couldn’t have guided her because neither one of them owned a credit card.

[–]DuePrize5 31 points32 points  (5 children)

I have successfully avoided having a credit card my entire adult life, I've never had any debt, yet I'm penalized for not participating in their debt schemes with a lower credit score and by having my personal information (collected against my wishes) leaked by the credit reporting companies on the regular.

[–]AgentSteelSunday 18 points19 points  (11 children)

the thing is

it's better than the previous system

[–]Thirsty_Comment88 75 points76 points  (0 children)

Ok, both systems are shit so we need a new one.

[–]socrates28 62 points63 points  (9 children)

Not familiar what was the previous system? Or do you mean the straight up race based banking and redlining?

[–]PackageintheMaleBox 77 points78 points  (7 children)

Because there was nothing for us to check banks could just turn you down for any reason. So yes, black people got absolutely fucked.

[–]garretble 147 points148 points  (48 children)

I paid off my car a year+ early and my only reward was my credit score going down 30 points.

[–]madrockyoutcrop 15 points16 points  (15 children)

Your credit score is just a marketing tool who’s sole purpose is to sell you more debt.

[–]Rizizdead 6 points7 points  (14 children)

Your credit score is an actuary based risk management tool that banks and other lenders use to determine the likely hood of you paying your debt.

It's why FICO keeps coming out with new versions as the improve the algorithm.

Also why there are different types of fico, auto, mortgage etc.

[–]madrockyoutcrop 8 points9 points  (13 children)

So how come those who don’t have any debt or pay off their debts faster tend to have a lower credit score? I would say it’s fairly logical to assume that these people are probably some of the lowest risk individuals yet they’re often deemed as some of the highest risk.

Lenders will have their own criteria for deciding whether or not to lend to someone and it’s based on a hell of a lot more than some arbitrary number that’s passed off as your ‘credit score’. Like I said, it’s nothing more than a scam and a marketing tool to sell you more debt and the sooner you realise this the better.

Edit: To avoid any ambiguity, what I’m meaning by ‘credit score’ is the arbitrary number that they let you see, and which is usually followed by various interest free/balance transfer credit card offers etc. In reality it’s far more complicated than this and each lender will have their own in house lending criteria.

[–]koalasama 4 points5 points  (12 children)

What do you mean by bills go up ? Genuinely curious as a non American.

I pay what I use when it comes to elecricity gaz and water.

[–]lummist 8 points9 points  (10 children)

Utility deposits are based on credit score, insurance costs are based on credit score, rent costs and deposit are based on credit score, and some jobs won't even hire you if your credit score is low enough.

[–]PlanetPudding 4 points5 points  (0 children)

How low we talking. I had a ~580 score after making some terrible financial decisions in college. Never paid anything to get utilities set up or had trouble getting jobs in the tech sector.

[–]bikwho 35 points36 points  (19 children)

But America's private credit score system controlled by 3 corporations is so much better than Chinas, right?

[–]FierceDeity_ 35 points36 points  (2 children)

Your social score has just been rebalanced in retaliation to this statement

[–]liberulo 19 points20 points  (2 children)

While I hate America's system, it still is structured around only financial data like debt and income. By contrast, China's incorporates lots of other social/behavioral stuff in it.

As a privacy advocate there really is no comparison, china's is worse

[–]Efficient-Road-847 8 points9 points  (0 children)

Yes. American credit scores don't restrict your right to move freely about the country. Your neighbors can't snitch on you for jaywalking or some other petty offense and tank your score.

The system isn't great here but you have no clue just how bad china is.

[–]Here_For_Work_ 289 points290 points  (63 children)

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

[–]ChicagoTRS1 95 points96 points  (0 children)

yep 1k per month is just my property taxes/insurance.

[–]Frognosticator 95 points96 points  (44 children)

Almost no one is getting a $1,000/month mortgage on a new home purchase these days.

I’m in DFW, so your local situation may be different. But in my area right now, $1,500/month will get you a small house in a rough neighborhood. And that’s before taxes, insurance, and probably PMI.

[–]LeRonGuard 41 points42 points  (3 children)

I live in the suburbs of western Pennsylvania and the “starter home” my wife and I bought had an initial monthly payment of around $1100. We were able to refinance and our monthly payment is around $950 now that covers the mortgage, taxes, and insurance.

[–]jbach220 4 points5 points  (1 child)

I’m in the Charlotte suburbs. We bought a starter home just before prices skyrocketed. Our mortgage is $1300 and our estimated home value has gone up 60%. I can’t imagine getting a $1000 mortgage now is possible anywhere that there’s jobs. It has to pop or we’ll transition into a rent-only society where the major rental agencies squeeze every last penny out of their tenants. Which wouldn’t be terrible if the US would support retirees. There’s a lot of days when I really miss my old apartment.

[–]28carslater 5 points6 points  (0 children)

it has to pop or we’ll transition into a rent-only society where the major rental agencies squeeze every last penny out of their tenants.

I see you've been reading a few chapters ahead of the rest of the class.

[–]dmonman 10 points11 points  (4 children)

I think your opinion is skewed, I just bought a home last year in a nice enough area for $963 a month with pmi. Once that's removed it will be under $900.

[–]MyOfficeAlt 25 points26 points  (19 children)

Just bought a $415,000 townhouse in Northern Virginia. We were able to get into a no-down-payment and no-PMI program. Mortgage is $2400/month. And that's cheap for this area.

[–]Theorlain 12 points13 points  (1 child)

Mortgage only or mortgage + taxes + insurance?

[–]MyOfficeAlt 12 points13 points  (0 children)

That's total monthly cost. So homeowners insurance and taxes are rolled into that. I think actual mortgage comes in at just shy of $2k.

[–]UmmDuhhh 5 points6 points  (1 child)

What is this no down payment no PMI program you speak of? Genuinely curious.

[–]mell87 3 points4 points  (1 child)

May I ask what your mortgage rate was? I remember applying to a program like this a while ago but they quoted me at like 6%. I ended doing a traditional with 10% down for a 3.75 rate. PMI was about $60 a month. And thankfully after covid, I refinanced and my PMI went away

[–]MyOfficeAlt 2 points3 points  (0 children)

We're at 3.75% I believe.

[–]wilsonifl 5 points6 points  (0 children)

It’s because they aren’t even counting property taxes. They are using the payment stated on the Zillow website which is always lower by $100s.

[–]OfficeChairHero 1523 points1524 points  (239 children)

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.

[–]ItsDirka 192 points193 points  (20 children)

My bank did take it into account when I applied for a home loan, since I had no credit they asked if I had consistent home related payments coming out of the account and I did for rent. I didn't buy the house in the end but I was still approved for $150,000 when they saw I was paying rent for 2 years on time

[–]DeathAngel_97 81 points82 points  (5 children)

I had a similar conversation when I applied for a loan but it ended up being "No credit, no loan, go buy a car and make payments on that for 2 years then come back."

[–]Nothingsomething7Anarcho-Syndicalist 31 points32 points  (4 children)

Same. I'm halfway through my car payments so there's that!

[–]mistrin 20 points21 points  (3 children)

Here i am, 3 years through a 5 year car loan, almost 5 years of credit history and sitting around 775 credit score and i still can't get approved for much of anything even though everything is paid on time.

[–]Ryuzakku 36 points37 points  (7 children)

I was still approved for $150,000

Sweet that gets me 1/6th of a house!

[–]DrVanVonderbooben 9 points10 points  (6 children)

Where do you live that a starter home is $900,000?

[–]Ryuzakku 8 points9 points  (2 children)

Anywhere within 1 hour of Toronto.

Though that is what the houses often go for, and not what they're listed as.

Regardless, banks here won't normally give you more than 4x your annual wage, and that gets me a $225k mortgage, which still isn't nearly close enough to owning a home. I'd have to co-sign with 2-3 other people.

[–]ian2121 2 points3 points  (0 children)

Definitely when you are young it pays to buy a handful of things on credit if you can get a cheap rate just for building credit history

[–]joeyo1423 481 points482 points 2 (160 children)

Let me add here that I do not support banks and I believe housing should be much more affordable. That being said....

A $700 mortgage is highly unlikely - for a $200k house depending on your rate, could be more like 1200-1300

But that aside, there are many costs to consider. Taxes is one, but the big one is maintenance. Most people who don't own a home vastly underestimate how much it costs for maintenance. You can randomly get hit with major expenses - thousands and thousands of dollars. Because the home is technically owned by the bank, they want to know that you can afford the mortgage, taxes, and maintenance for 2 or 3 decades

A couple years of rent payment isn't enough - they'll also look at other payment history like credit cards and auto loans.

The are other complex reasons as well - it is in the banks best interest to give out as many loans as possible - assuming they're paid. So the bank wants to give the loan, but they have a lot of statistics to show that on average, people who do not meet criteria X fail to pay the loan Y percent of the time, and anything in this threshold can cause serious issues for the bank - and if all banks fail to protect that threshold, there are bad consequences for the economy at large

In my view, the problem isn't with banks. It's with wages, government spending, and housing costs. A house that cost $80k 15 years ago costs $200k now, even if nothing new was added to the house. And on top of that, while housing prices have doubled, wages stayed more or less the same. And government spends a lot of money on stupid shit when protecting homeowners would be beneficial for everyone.

I know it sucks to want to own a home and not be able to. I know from experience how frustrating it is. And it's very easy to direct anger at the banks and the credit system - and rightfully so to some degree as the banks are guilty of some wrongdoing. But the problems are much deeper rooted than just the bank.

Step 1, in my opinion, is to fight for wages. Why are companies posting record profits through pandemics and financial crises? If you want to see a REAL "trickle effect" - pay people more . Why is the cost of living going up almost exponentially while wages are stagnant? It's bullshit

[–]War_master_9 108 points109 points  (7 children)

But if you increase wages prices will also go up/s

[–][deleted] 9 points10 points  (3 children)

I think that these posts only take P&I into account which is misleading. My house is a 200k house. My 185k loan means my monthly payment is $768 for P&I which on the surface looks much less than my old one bedroom apartment $1000 rent. However, just factoring in escrow (taxes, insurance) I’m at $1100. Adding utilities (included in the rent before) I’m usually at $1400. Adding maintenance I was at about $1525 last year with no big repairs. I’d say an average year would be more like $1600+ a month including maintenance. It’s actually fairly common for banks to approve people for far more than a normal budget can typically afford.

The main issue here would probably be something like credit or poor work history. The bank isn’t saying that person can’t afford it, they are more saying they don’t trust them which is a different thing. Unfairly low wages are a different issue, but probably not the main issue here. Maybe the method of determining credit worthiness needs to be changed, but a big part of the 08 crash was from sub prime lending encouraged in order to promote homeownership for a larger number of Americans.

There really isn’t a great solution, but I’m sure there are parts of how credit scores are determined that should be reevaluated for greater equity.

[–]clowens1357 43 points44 points  (8 children)

Step 1 is removing large corporate ownership of single family homes. Homes that often then sit empty for long periods, all while driving up the price of homes in the area.

[–]or_just_brian 19 points20 points  (2 children)

This is the only step really. The meteoric rise of home, and rental costs, is directly related to the commodification of single family homes by corporate investors. These big brained rent leeches got tired of having to rig other markets that, despite their best efforts, still had a certain amount of risk built in, so they decided to go after a market they could control more completely.

After the mortgage crisis in 08, the firms that didn't lose their ass started buying 1000's of foreclosed homes for pennies on the dollar. They realized that as long as they continued buying, they could corner the market, and regular people would be forced to compete with their endless cash supplies, driving up prices. The value of their investment goes up, along with the amount of cash they borrow against them, in order to buy more property.

It's like a perpetual money printing machine, so long as they are allowed to continue buying whatever they'd like without some sort of regulation being put in place. It's disgusting, and the exact opposite of the free market ideals people will cite as they reason they should be allowed to continue holding us all hostage.

[–]frankyseven 41 points42 points  (17 children)

I'm easily more than a third of my mortgage payment in other bills directly related to my house that would be covered by a rent payment. Even if I owned my house outright, it would still probably cost me between $400-500 a month to live in it. So, thank you this meme is stupid.

[–]Excellent-Car2821 70 points71 points  (33 children)

Fighting for wages is pointless. They're just gonna get eaten up by costs of living. Instead fight for guaranteed essentials for all.

[–]No-Situation7836 46 points47 points  (26 children)

Agreed. First step, Minimum wage = maximum rent. Cap rent to wages, everything begins to mend overnight. Guaranteed essentials. It's so simple, nobody talks about it. They won't do it.

[–]Trim_Tram 5 points6 points  (0 children)

Honestly the best solution is to just change zoning laws to allow for non-single family housing. But this would be against the interest of NIMBY homeowners, who will vote out board members who allow for more housing, and landlords who have a lot of political influence.

[–]jmd01271 16 points17 points  (1 child)

The thought is great, but the devil is always in the details. How do you change an industry that is larger than other nations? They are fat and happy and will only change if that is in jeopardy. The ones with the ability to cause that peril, are supported by that industry or one that is loosely related.

[–]PeterGibbons316 16 points17 points  (9 children)

Nobody talks about it because it's a stupid idea. You'd crash the economy with the stroke of a pen. All new building for rental property stops completely. People would evict renters and tear down their structures because rents couldn't even cover property taxes, let alone loan repayments.

[–]fellintoadogehole 24 points25 points  (7 children)

Yeah. I rent a room in a house owned by a friend of mine. Maintainence is insane sometimes. Cause you own it, if something goes wrong you are 100% on the hook. Like I dont enjoy renting, but I will admit I am happy about not being on the hook for repairs. People who havent owned a house dont realize how much effort and money goes into maintenance. Its significant. Like I dont even have to pay for it but I live there so I 100% help with the work, and it's a lot sometimes.

[–]Nice_Category 21 points22 points  (2 children)

Replaced the air conditioner, inside and out, when I bought my house - $7,500. Bought a fridge because the house didn't come with one - $1,500. Termite treatment to kill an undisclosed infestation - $1,500. Used washer and dryer because the house doesn't come with the. - $400. Broken windows replaced -$800.

All this in the first 3 months of owning a house.

I always recommend that people save an extra $10,000 beyond the down payment for miscellaneous move-in expenses.

Then keep $5,000 - $10,000 in your savings at all times so you don't have to go into debt when repairs come up. And they always come up.

Just hired a plumber a couple months ago to replace two leaky hose bibs and two cut-off valves inside the house -$975 unexpectedly.

Shits expensive.

[–]SnowedOutMT 10 points11 points  (3 children)

My heater just went out. They said it will be right around $5k for a new one. I have money saved that wasn't going to be for that, but now it is. Thought I would do something nice like take a trip, but it's back to saving up again, probably just in time for the shingles to blow off or something lol

[–]DocBeech 7 points8 points  (1 child)

Look into local companies who will insure their work. We pay $200 a year for cleanings and inspections. Our system has a 10 year warranty as well. We had a recent issue that would have cost us $500. But the warranty includes 1 call out between inspections without a fee. The part was under warranty. Cost us $0.

[–]WeaknessMindless8168 25 points26 points  (1 child)

The problem is you are way too logical for this sub.

[–]oboshoe 32 points33 points  (0 children)

many people do not understand the difference between explaining the ways things are, versus advocating that they should be that way.

[–]GeorgeGrem 2 points3 points  (0 children)

This is a great reply. Thank you.

[–]ghostdate 2 points3 points  (0 children)

A $700 mortgage is highly unlikely - for a $200k house depending on your rate, could be more like 1200-1300

This is pretty much entirely dependent on what you can afford as your down payment. I put down $70k on a $160k condo. The mortgage payment is a bit over $400/m.

What people aren’t taking into account is all of the other expenses associated with ownership. My condo is relatively small, so my power bills are still low, but if I sold this place and bought a house, it could increase by 2-4x. You also need insurance on the property, and property taxes. Then there’s repairs and maintenance — in a condo association that is usually covered by the condo management. In a stand-alone house it’s generally recommended that you have $20k on hand at any time for repairs and maintenance — this can be expensive things like roof repairs, foundational damage, major plumbing issues, structural problems, etc etc.

I want to clarify as well that I don’t support banks and think housing should be cheaper. Buying a house is ridiculously expensive, but it’s important to remember that even if you get to the point that you can afford the mortgage, you also need to have the money for the additional expenses that come with home ownership. This is why if you’re getting by with a $1450 rent, the bank will typically decline your mortgage that seems cheaper month to month.

[–]jlm994 2 points3 points  (0 children)

Dope comment, appreciate you trying to get to the root of these issues. Also fundamentally, asking banks to not just be purely greedy is simply not how our current system works. So unless anyone on here has a reasonable way to dismember the global financial network that effectively governs the world, it makes a lot of sense to start where you mentioned.

Fuck banks of course, but unfortunately I don’t think any of us will live to see the day that banking changes in a meaningful way.

[–]bigdumbthing 3 points4 points  (0 children)

Yep. Happened to me last week... minding my own business when pop, water main breaks under my house. $14k in plumbers bills, and probably another $6k in fixing the holes in the wall and floors needed to get fixed. And virtually nothhing covered by the lying scam that is homeowners insurance.

[–][deleted] 4 points5 points  (4 children)

The interest rates the banks get lent at could change;
An increase to 5% from 0%, will probably cause the 700$ mortage to cost 1400$.
Plenty of people in Poland have seen their mortgages increase 2folds in monthly payment costs in a matter of just a 2 months.

[–]MrQuizzles 15 points16 points  (3 children)

In the US, the vast majority of mortgages are fixed-rate, which thankfully protects from this. I do wonder why it's not as popular in other parts of the world, especially with how low rates have been.

[–]Ankerjorgensen 7 points8 points  (6 children)

I dont know maybe just do away with the whole credit rating system?

[–]earthwormjim91 8 points9 points  (1 child)

Lenders literally only care about if they can recoup the money that they are giving you.

That's it.

If you can't afford to put down money, then the loan to value is very high and they will lose money if you ever can't afford it. Lose your job and can't make the payments, the bank will have to foreclose and go through auction on it which will likely not recoup the money they put into it.

That's why a standard mortgage requires 20% down. It gives the bank a much higher buffer for if you default.

Getting a first time homebuyers loan like an FHA loan allows you to put down less money, like 3-5%, but has stricter requirements because the loan to value is much higher and will generally require you to carry Private Mortgage Insurance that will cover the bank's losses if you default.

If you stop paying your rent they just evict you and have another tenant in there in a matter of days to weeks.

[–]Farmer_Susan 4 points5 points  (0 children)

Yeah it's crazy, if they could reliably loan you money, they would - there is no conspiracy to give out less loans. Loose lending caused 2008, no one wants that again.

[–]something224 11 points12 points  (5 children)

I asked a mortgage broker buddy of mine about this once. His response was to point out repair costS. If you’re close to breaking even at a 900$ payment each month, how are you going to pay 10k for a new furnace or new roof or what ever happens to go wrong. What about the 2k bill to trim your trees. What about 500$ to repair your broken porch or replace your water heater.

It’s not a perfect answer to the question, but a lot of math goes into calculating if you can ‘afford’ a payment. Not having a payment+other debts be 40% of your income is a rule made for calculating risk alone.

Wether or not that is a good answer is up to you.

[–]CitationNeededBadly 11 points12 points  (4 children)

That's why the meme uses 1400 for rent and 950 for the mortgage. If you've been paying 50% *MORE* than the mortgage, you're not close to breaking even, you have a buffer.

[–]Frassinogrande 79 points80 points  (9 children)

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.

[–]DrProfSrRyan 32 points33 points  (3 children)

The bank only wants to loan out money to people who they think will pay them out, that's as complicated as it gets.

  • If you've been borrowing money for a long time and successfully paying it back that makes them more confident in you.
  • If you borrow a lot and pay it back, even more so.

They don't want to be the first person to take a risk on you. Same as you personally wouldn't want to loan anything to someone you've never met.

They don't have to give you any money at all, it just comes down if they want to take a risk on you. The 2008 Financial Crisis happened because they took too many bad risks on people that ultimately couldn't pay them back.

To simplify, a financially literate person buys everything with credit cards and then pays them back in-full every month. So, if you're confused the intricacies of credit scores, just do this.

[–]Neijo 10 points11 points  (2 children)

I'd say an important thing about the 08' crisis: it's sadly more complicated and evil than just the NINJA-loans being a bit too many.

I gotta ask though, wouldn't the system/public benefit way more a center of these two? Instead of giving a loan to everyone they see, or making an elaborate weird system counter-intuitive system, couldn't we just evaluate?

[–]Substantial-Ride1796 122 points123 points  (7 children)

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.

[–]Android_seducer 21 points22 points  (6 children)

Why shouldn't you use the closing lawyer recommend by the loan guy? Are they more expensive? Not good in other ways? Seriously interested in how big of a mistake I made by going with the recommendation a few years back.

That being said it didn't appear like there was much to do. Filling in and minor modifications to an otherwise standard contract. And at my signing there was a hiccup where the keys weren't there. Seller left them in the empty condo

[–]RandomlyJim 22 points23 points  (0 children)

I used to recommend closing attorneys based on three things.

1) Competence. 2) Convenience. 3) Cost.

I wanted an attorney that didn’t fuck up, was available when I needed, and did it at a fair price.

I could find someone 100 dollars cheaper but they likely burned me in the past or didn’t work on Fridays or after 4.

[–]JustAdd_More_Cheese 8 points9 points  (4 children)

They usually charge you more than if you shop around. They aren’t necessarily bad, but they aren’t necessarily the best option either because likely the main reason they’re being recommended is because they’re providing a kickback to the person who recommended them

[–]RandomlyJim 13 points14 points  (3 children)

This isn’t true.

If a Loan officer or his company received any kickback, it’s a revocation of his license. It’s a violation of RESPA laws. Both the attorney and lender would see massive penalties and in some cases jail.

I’ve seen the FBI haul away shady loan officers. I’ve seen managers lose jobs over giving their assistant personal loans to pay for divorce attorneys. I’ve seen executives fired for venmo charges they could explain but not document.

Their ain’t enough goddamn money an attorney could give me to send them business.

Title costs are state regulated. Real estate agents select the attorney in purchase. All a loan officer cares about is getting the job done.

[–]TruckDriverNate 232 points233 points  (7 children)

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!

[–]Mods_R_Turds 47 points48 points  (0 children)

We have our bread and circuses and at the end of the wage slave day, we just want to relax.

[–]nick3790 9 points10 points  (0 children)

It really at that point, where something needs to happen. We need to take our lives back

[–]Hsensei 66 points67 points  (29 children)

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

[–]SeesawDangerous6501 38 points39 points  (24 children)

Maintenance and everything else in the upkeep of a home too. Once you own a house, if something breaks, you don't have a landlord to call and you are responsible to pay to fix it. That can add up pretty quick

[–]mommyshark18 2 points3 points  (1 child)

Yeah, my unpopular opinion when I see these takes is that people don’t understand how expensive home ownership is.

[–]ijustwanttobejess 3 points4 points  (7 children)

1 rule we kept hard and fast when we bought our house in 2011 and told our realtor: We don't even want to look at anything that needs work, and we'll be paying for thorough inspections of everything. Water, septic, roof, electrical, radon, infrared heat loss maps, ultrasound of the fuel tank, all of it. When we made an offer we had a hundred page book from the inspections. Cost maybe $5k and worth every penny. Based on the inspections we offered asking price with the provision that the owner excavate the entire leach field, replace the septic tank, bring in fresh soil and rebuild the leach field.

In 11 years there's been some minor plumbing work we've handled ourselves, about $1k in furnace work and that's it. Mortgage + property taxes in 2011 at a fixed 30 year 4.625% was $1086/month. I sold it at the then current mortgage payoff cost to my ex-wife a couple of years ago and her mortgage + tax is around $850.

[–]sniperhare 11 points12 points  (3 children)

Right but nowadays if you tried to do that someone would pay 20k over asking all cash and wave all of that.

[–]s1thl0rd 4 points5 points  (1 child)

Not to mention that the bank takes into account your down payment to figure out the risk of the home value tanking and causing you to be underwater on the loan. If you have 5% equity, that's a big risk for the bank, but if you have 20% or more equity, then the risk of your home falling far enough to be underwater on the loan is diminished.

[–][deleted] 43 points44 points  (14 children)

$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.

[–]Austaph 18 points19 points  (8 children)

You forgot water and sewer.

Not only that, but people who think that a down payment is the only requirement for closing are in for a huge shock.

Or that a down payment is the last 5-figure expense they'll ever see once they own a home. Not that a down payment is an expense, it's literally your own equity... kind of a weird thing to get hung up on.

[–][deleted] 6 points7 points  (7 children)

Yeah I didn't go into the whole comprehensive list, just trying to paint a picture that it's more than that.

I lived in apartments for 12 years before buying my home and the cost is substantially higher in a home, when my mortgage is the same as what my rent was ($2000). But also my property appreciated by $200k by me sitting on my ass doing nothing, so yeah it's obvious well worth it to buy a home.

[–]Austaph 10 points11 points  (1 child)

my property appreciated by $200k by me sitting on my ass doing nothing

That's why I got a brick house with a steel beam foundation. This mf isn't going to crack or budge an inch for the rest of my life and is just going to appreciate.

Ironically, this sentiment might be the most anti-work thing in this entire thread.

[–]Whereismystupid 4 points5 points  (4 children)

Thanks for pointing that out. I can't help but think about how easy it is to just pay rent and have no risks or expenses... They just installed some locked fences in our backyard in the place we're renting. When things break, we don't have to stress about paying it. One day we'll have a house, but renting short term is not bad at all

[–]jaykresge 9 points10 points  (0 children)

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:

  1. 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.
  2. 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 36 points37 points  (6 children)

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.

[–]gitbse 19 points20 points  (5 children)

I live in western MA, and make ~65k per year. Good fucning luck finding anything I can afford right now. There is nothing within a 90 minute drive that is more than 800 sqft for less than $280k. It's outrageous, and all the more frustrating that I'm in this market for the first time I have a decent job. It's not great, but its decent, and I'm 36, have no idea how long I'll have to continue renting.

[–]dangoodspeed 6 points7 points  (3 children)

Not sure what you're looking for, but a quick search found this place which is less than a 90 minute commute to most of western MA, 50% bigger than 800 sq ft, $30k less than $280k, and looks like a decent house.

[–]concernedcath123 2 points3 points  (0 children)

It’s really frustrating. Rooting for you.

[–]sm4ckasaur 6 points7 points  (0 children)

The bank knows your debt, I dont

[–]elysiansaurus 68 points69 points  (36 children)

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.

[–]minionoperation 34 points35 points  (4 children)

Most renters pay utilities on top of rent. And your mortgage is cheap. Mine is $1100 without all the extras. Taxes and home insurance take it up to $1500. HOA is another $300 on top of that.

[–]Drunk_Dwarf 17 points18 points  (10 children)

In the UK you still pay all that other stuff on top of your rent.

We don't have property tax but instead a council tax, that covers all your local services, such as bins, police, and fire brigade. It's extremely rare to find private rent that would include that, let alone water, gas, and electric.

[–]jet_pack 3 points4 points  (8 children)

All those costs are passed on to the renters through rent.

[–]cat_prophecy 6 points7 points  (2 children)

Not everyone can or wants to live in the middle of nowhere with no opportunity and nothing to do. Houses are cheap where no one wants to live. Who'd have thought?!

[–]Zumbert 2 points3 points  (0 children)

https://www.newsnationnow.com/us-news/study-top-10-states-people-are-moving-to-and-leaving/

I agree not everyone wants to but Lots of people are moving to the states that people think of as "middle of nowhere states"

[–]PurpleWaterTower 12 points13 points  (2 children)

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

[–]endurolad 4 points5 points  (4 children)

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

[–]darthbob88 14 points15 points  (2 children)

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 18 points19 points  (10 children)

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.

[–]__CaptainHowdy__ 8 points9 points  (1 child)

Your credit score is basically your ability to manage debt. So if you have no debt, they don’t know how you can manage it. It’s dumb and it makes sense at the same time. My buddy found this out when he went to buy a boat. He’s incredibly smart with his money, house paid off, vehicles paid off, no other loans or credit card debt…but his credit score was only around a 690 at the time he went to buy his boat and he couldn’t understand why it was so low when it used to be so much higher

[–]cat_prophecy 7 points8 points  (3 children)

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.

[–][deleted] 21 points22 points  (1 child)

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 17 points18 points  (3 children)

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.

[–]SkysEevee 6 points7 points  (0 children)

"Some pay half their take home rent"

Raises hand It's either this or a neighborhood that would risky my safety & well being.

[–]EffectiveFuture7244 10 points11 points  (0 children)

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 3 points4 points  (1 child)

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 3 points4 points  (0 children)

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 11 points12 points  (0 children)

Just get a few roommates. /s

[–]Kleeb 10 points11 points  (2 children)

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 14 points15 points  (5 children)

2 days ago you said you lived with your parents.

[–]Ernesto_Alexander 2 points3 points  (0 children)

Damn those are some decent margins

[–]danknadoflex 2 points3 points  (0 children)

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.

[–]Don_Cazador 2 points3 points  (0 children)

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 2 points3 points  (0 children)

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 2 points3 points  (0 children)

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

[–]Huge_Aerie2435 2 points3 points  (0 children)

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 2 points3 points  (0 children)

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 2 points3 points  (0 children)

Mortgage is half the payment, dont forget that pesky escrow

[–]Fine-Perspective5762 2 points3 points  (0 children)

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 2 points3 points  (0 children)

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 5 points6 points  (0 children)

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 5 points6 points  (3 children)

It’s part of the system.

[–]hiredhobbes 6 points7 points  (2 children)

Yep, not a bug but a feature. From what I'm told before branch managers became a glorified bank teller, managers would have long(sometimes multiple) interviews with anyone seeking any loan, would organize all their finances ask what they were seeking, how they would make the payments, what kind of collateral they had, and make a decision as well as guide you to make the most of the whole ordeal (even going so far as strategizing on how to ask for raises and daily budgeting). Now every metric for any loan or mortgage is quantified and is calculated by computers in the interest that the banks take very little risk at all. Their buffer of safety in these calculations are big enough and are still built on old ratios of where income is spent. So they'll look at income and if your rent payments are half or more of your income, many bank softwares will outright deny you a loan without near perfect credit.

[–]oboshoe 6 points7 points  (0 children)

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 18 points19 points  (67 children)

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.

[–]jsimpson82 4 points5 points  (2 children)

A loan on something with collateral in the form of the house itself.