this post was submitted on 29 Aug 2023
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A Boring Dystopia
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Well I’m pretty mad that I’ll never be able to afford a house, despite having a good solid job. My parents aren’t rich, so they can’t help me. And while I’m not mad at them for not being able to help, I am mad that all other things being equal that puts me at a disadvantage.
Here’s a hypothetical scenario: Let’s say I make $60K a year, am single, with significant student debt. Let’s also say because of the pandemic payment pause, maybe I was able to save, like $5K, and I want to buy a house. Not gonna happen. Now take all the same things but add in well-off parents who could help with a down payment. That hypothetical person gets a house. They have a definite advantage. To me, that’s not just unfair, it perpetuates a system of wealth transfer that only helps part of the population. Everyone should have the same opportunity to own a home, if they want to.
Don't forget the tightening of lending rules going on. Even if you have the down payment, most will not qualify for the mortgage unless they have some one co-sign (bank thinks you can't pay $1000 mortgage, so you have to pay $2000 rent).
It is where I am, and the issue is indeed finding a house to match your income since the prices are going up everywhere. I think it is insane when families buy a 1 million $ home with a $200,000 income. But that is still cheaper then them renting and if the bank uses say a 30% of income rule then very few qualify.
What % of renter income is rent? Does anyone care?
I know of people paying 70% plus and sharing accomidation, shits rough and getting coarser.
I'm house hunting. I bought a foreclosure in 2008 and fixed it up and will have 160k for a down payment when it sells.
Despite this, my mortgage (plus taxes) will be AT MINIMUM 55% of my income. I have a very wide area I'm looking in and my requirements are small - 2+ bedrooms and a garage. The only homes in my budget need more work than I can afford.
I got pre-approved for a mortgage up to 75% of my income. Pair that with the layoffs happening around the country and we're poised for another crash which is exactly what corporate buyers want.
Sounds like the crazy lending during the sub prime boom. Not saying you are a bad bet but that seems like a crazy risk.
That's what I'm saying!! When my broker told me that I couldn't believe it. They know my income and banking balance, why on earth would they offer that loan?
But banks aren't stupid. Foreclosures are good for them in the long run and they know it.
When I was younger I worked at a bank (regional office doing loan verification of all things) 2009 ish and I can tell you banks can be and are often stupid, foreclosures are not good or wanted, but most of all the incentives for individuals don't line up with the banks overall best interest.
Good point. I’d never get approved for a mortgage on my own, so I’ll be stuck paying rent that’s more than any normal mortgage payment. It’s so clearly rigged against me and people like me.
The funny thing is if you incorporate your company can get a mortgage as long as you can show income though rent (you can list yourself as one of the renters for some reason). The rates are crap, but you can get one.
This seems to encourage more landlords over general ownership.