Actually i guess the bigger issue is that we’re gonna be unemployed in 15 years due to a declining demand of human labor and then who pays back what?
Today you could afford the pay-back rate, but not in the future, and the banks are well aware of that.
Joke’s on them, I have a 15-year mortgage on my condo. (Lower interest rate than a 30-year mortgage, USA, ymmv)
There is no declining demand of human labour, and there is no indication that it will ever happen. The way the labour is performed is changing, just like it always does
Right? You don’t need to exist long term. Fuck off and die, meat.
Edit: by which i of course mean ‘i dont need you to exist’. Which is the same thing, right?
And on top of that, they made any alternative illegal! You want to live in your van? Illegal, you want to build a tiny house? Illegal. It’s insane
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…
The 100k+ over asking was the big deal because that never made it into the housing data properly so prices looked like they were lower than they were and we don’t have accurate comparison data now
Was it in a desirable location? Our tourist town went out of control with our of state buyers during the pandemic, but property values have adjusted back some and the market competition is gone. If you still have some of that $40k now might be a better time. My wife and I just did the federal First Time Homebuyers class and wound up getting a USDA rural development loan, they wouldn’t even let us put a down payment to lower our payments.
I am a skidmark that cannot believe that I live in a house that I “own”(have a mortgage). And I am so much less pessimistic about anybody’s potential to do what I did. I am happy to answer some questions. I make $22 an hour and my wife makes $17, the loan officer told me I almost make too much for the program.
Yes, at the time, I was hoping to buy in the Salt Lake Valley and it just wasn’t feasible. Thank you for the tip, I will read up on the USDA loans.
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.
We probably live in different countries, but where I live it’s more like you can’t get pre-approved for anything unless you either have a large amount of money saved up, or your salary is high enough that it’s far beyond what you would reasonably need to get paid to afford the mortgage.
You live in Germany don’t you
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
Oof bruh, I am starting to doubt my earlier offer…
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
Fudging the numbers a bit, but let’s say I’m paying $3000/mo for a mortgage. Brokers tell me I can afford $10,000/mo.
I cannot afford $10,000/mo.
You can’t even get an apartment here without making a ton of money. Cheapest studio apartment here is $1,500 a month. I have to prove i make $4,500 a month just to barely qualify, which i don’t. Then they charge you so much for application fees, and then utilities they overcharge for, it’s all a scam.
I am coming to realize that my rural perspective is pretty different, and that lots of people live in way higher cost of living areas than I do. My biggest suggestion is if you don’t like expensive housing, get out of the city.
The problem is some jobs are only inside the city
We know.
There are a number of people that have a home in the country with their family, and they travel to the city to work. Sometimes they are homeless during the work, or rent a small room.
No, it is not the ideal solution, but it is a solution. Fixing the housing situation is beyond most people’s power, and it will take a long time for those trying to fix it to actually fix it.
Very dependent on the field. A lot of jobs are concentrated in a handful of major cities, mostly very HCOL but with high salary. That’s why remote work becoming bigger partially caused the housing surge nationwide.
If city folk starts coming to rural area, they will start complaining that city people are jacking up property prices.
I tried and here are some places I have looked where the average home is $810,000 come to find out.
Pinedale, Wyoming, USA Ennis, Montana, USA
These are in the mountains about 1 hour from the nearest big city of Jackson, Wyoming and Bozeman, Montana. I guess I need to look in the deep sticks.
Are you really confused why those properties are expensive? Those are both desirable locations in regions with quickly growing populations. How about Livingston, or Butte?
I am as there isn’t anything here. Cows and mountains. I am staying here passing three and it’s just nothing. Normally you would get water front and community features to set the price but none of that is here. I guess the confusing part is what is attracting people here. It can’t just be the mountains.
This really isn’t as easy as it sounds. Moving means you lose your support system of friends and family etc. Some people have children and need the grandparents to help watch them during the day as just one example. Job opportunities are likely not the same. While their current city job may not pay a lot the opportunities from that job could lead a lot higher but of course life choices can be a gamble. On top of all of that, moving long distance is difficult and expensive.
I have a highly intelligent friend from a small southern town and he moved out of there because he recognized there weren’t any opportunities for someone with talent but no capital. Sure he could have stayed and bought a cheaper house but he’d still struggle to make the payment on his small salary.You realize the headquarters of Walmart are in Arkansas? There are plenty of very high paying jobs in significantly more affordable places. Also if you pay 1/4 less for a house, and add daily childcare it’s still gonna be cheaper. People literally do it all the time, the whole concept of the suburbs was created so that people could afford houses.
I moved to the small town. I’m a college drop out, there’s always labor in the country, and I guess I just don’t want as much from life as other people. I’ll be happy working maintenance the rest of my life of it keeps providing.
This is an unpopular take, but that is reality. It really is affordable out here! If you want more income, learn to repair reliable japanese beaters and commute a little. It’s less busy than the city, and it may bore some, but it keeps the bills paid, the kids fed, and the 401k growing.
They don’t actually need regular payments for 10-30 years. They need you deposit that down payment cash ASAP so they can lease it to billionaires and crypto exchanges.
The deposit is to cover expenses/losses that arise out of defaults. Housing loans have been lile this forever. Not everything is a conspiracy.
the deposit is the keep young, inexperienced and glowy-eyes people from making commitments they don’t have the stamina to handle.
it happens a lot that 20 year olds want to buy a house with their new partner that they think they’re gonna be together with for the rest of their lives, only to have it all fall apart 5 years later. forcing to you save up a bit before actually buying the house means you go through a lot of experiences before you actually buy a house, which makes it more likely that you’ll have the far-sightedness that’s needed to actually buy a house. :)
Not necessarily young but inexperienced yes
That’s one thing, but there’s definitely a factor of “if there’s a market downturn AND we have to foreclose, we don’t want to lose too much”.
The house you’re buying is the collateral for their loan. If you took out a loan for 100% of the value of the house and are immediately unable to make payments, the bank then owns the house. For them to simply break even, they’d have to sell the house for more than you paid for it to cover the various costs (lawyers, agents, etc.) If the reason you’re unable to make payments is that the economy crashed and housing prices tanked as a result, the bank couldn’t hope to break even on their loan.
The down payment is basically a way to ensure that in the bank’s worst case scenario they still don’t lose money. In theory, the bigger the down payment, the lower the risk for the bank, and the better a rate you should get on the loan. Multiple banks should all be trying to be the one to give you a mortgage, and should be trying to compete by shaving their margins as tight as possible given their risk tolerance. Of course, it doesn’t always work out that way, but there’s a reason for what they’re doing and it’s not just to screw over their customers.
They can’t really ensure a positive worst case scenario. 15% is the minimum down payment where I live unless you use extra collateral, but a home could lose half its value if there’s a major economic downturn.
They’re just mitigating bad scenarios, not anything close to the worst case.
The worst case scenario is that the Earth is hit by a giant asteroid. At that point what does a little risk hedging in a financial transaction matter?
Idiocy.
The bank doesn’t get the down payment. The person selling the house does.
You pay that person the down payment, and the bank pays them the rest.
Honestly there’s loads of great reasons to hate banks but lots keep it real and avoid making up nonsense.
Banks typically ask for you to have cash in hand (deposited), or equivalent leverage, to qualify for loans in the first place.
The bank I used actively tried to get me to go with less down payment, and subsequently take out a larger loan.
But yes it is the height of idiocy to say, ‘down payment deposit’ when ‘qualifying assets’ is a more accurate term for the transactions function.
They need you deposit that down payment cash ASAP so they can lease it to billionaires and crypto exchanges.
No, this is patently false and borne of a misunderstanding. Idiocy.
When providing a mortgage, how does a bank get money to lease to billionaires and crypto exchanges?
Banks do leverage mortgage debt. Essentially the same process, in turn.
But how do they lease your deposit to billionaires and crypto exchanges?
Come back with some inheritance and then we will talk.
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.
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.
I’m glad I don’t live in America then.
aren’t you lucky
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 :/
To be fair, it’s a pretty large home. I’m living with my SO, my brother and his wife and there’s a couple of offspring that needed space too. Our house has ~5 ish bedrooms. Considering the number of people who live here, it can feel small. If it was just me and my SO, this would be humungous.
But that also means that we have four fully grown adults helping with the mortgage. So my share of the mortgage is around $1100 ish, per month, and we split most of the household bills, so I usually throw in about $400 more to help with that. I personally pay about $1500/mo.
My SO does the same, and we’ve encouraged my brother and his wife to also do the same. If everyone pays $1500 towards the house every month, we have more than enough to cover all the bills (electric/gas/water), as well as shared things like the Internet. Also that’s enough to cover the house insurance.
Yeah that actually sounds a little better than me. I’m the main bread winner and I’m responsible for almost all of it. It can be a little stressful at times
I’ve never paid a mortgage, but £500 seems pretty low. Do mortgage payments tend to be that much cheaper than rent prices?
Definitely not as low as £500… but mortgages are generally cheaper, sometimes much cheaper than rent. Example: we own a 5-bedroom house with a mortgage of $1,900, my step-son just moved into a 2-bedroom apartment for $2,200 rent.
I was paying $3,300/mo rent back in 2020. Got a mortgage at the low rates of 2021 and got a $2,800 monthly rate. So it seems like it’s cheaper. But once I add the property tax (~$1,000/mo), HOA ($500), home insurance (~$300), it’s not at all cheaper to own than to rent. Plus paying for maintenance on our own (had to replace both the fridge and the washing machine in the time since we moved) adds up too. Not saying it was better to rent, but it was definitely cheaper.
Our home insurance and property tax are escrowed and included in the $1,900. And no HOA. But the maintenance is real, something is always breaking. Had to buy washer and dryer, replace the stove and the dishwasher. I would still much rather own than rent though.
£100,000 over 30 years at 4.5% would be £506 a month. That plus the stipulated £25,000 deposit will get you a bungalow or terraced house near me as of about 18 months ago. Rent in my area starts at around £700 for a house outside of town or a single room in town.
So yes, £500 mortgage is possible. Rent being twice the cost of a mortgage for a similar property is fairly common. Banks and landlords being shitheads is guaranteed.
Anecdotally I pay over 200% the cost of my father’s mortgage to rent a home in a lower cost of living area.
I think most of the people disagreeing with the post are from the USA, which has completely different costs/taxes/prices etc.
In the UK (as the original post is), it depends where you live - our mortgage is about £350 per month (5 bed terrace), but if would have been almost £500 a month without the deposit. Rent in the area is about £600 - £1500 per month, for similar or smaller properties.
Note that this is in Northern UK, in the sort of town sometimes described as “a bit of a shithole”. I could get a train to a town an hour away and the prices would literally double - but the ratio between mortgage and rent would be pretty much the same.
Even with the cost of repairs, and a tiny bit on insurance etc, it’s a significant saving. Also, the repairs actually get done, which was not the experience I had in rented accommodation.
They did this before it worked out really well around 2008
Lemmy: blames capitalism for making loans too hard to get.
Also Lemmy: blames capitalism for making loans too easy to get.
More like blaming capitalism for the fact that it’s necessary to get a loan just to afford something as basic as shelter
I mean, imo people should be allowed to buy a piece of land and then live in a tent there as long as they arent dumping raw sewage on the ground in a metro area. But you can’t do this almost anywhere due to a number of factors which aren’t capitalist, so much as they are just bad ideas. Eg, minimum lot sizes, which mandate you must buy a lot of land, rather than only the amount you need. Or setback requirements, which mandate that you waste a substantial portion of that land, increasing the incentive to buy more land so a larger percentage is useable. Or absurdly low maximum occupancy limits (eg, in my city it is illegal for more than 2 unrelated people to live in the same home). Or sfh zoning, which restricts dense housing development to an absurdly small portion of land. Or using property taxes rather than georgist land value taxes, which allow speculators to sit on land indefinitely, waiting for the value to go up, rather than selling it to someone who would put it to good use. Or auto oriented infrastructure, which ensures that you will have to own a car to get from one part of town to another.
Remove these barriers, and basically everyone would be able find an apartment to live in, or can buy a small patch of land. On these small patches of land, individuals could start living rent free with just a walmart tent, a jug of water, and a 5 gallon bucket to poop in. Homelessness would be solved almost overnight, and it would cost basically nothing. From there, individuals unburdened of the need to pay rent or mortgages, could save money to put towards paying the city to install water, sewer, and electric infrastructure; pour home foundations; build framing, roof, and siding; etc. And once a minimal home was built, they could build additions over time, also without taking out loans.
This process would replicate the way cities were traditionally built for the last 5000 or so years, and after about 30 years or so, we would start to see these areas become some of the most attractive and desireable parts of our cities.
You’re describing slums, favelas, and shantytowns.
I’m describing the way humans lived and built cities since the dawn of civilization. Start small. Improve over time.
Hwy. How dare you blame systems. Only proximal causes can be addressed!
It’s almost like capitalism is bullshit
What we have isn’t capitalism those banks should have gone under
I would agree. Or really, those banks shouldn’t have existed in the first place in that form - a “too big to fail” institution should be broken up before they can fail with a prudent economic policy.
But to lemmings, it’s still capitalism.
Whatever system America is, is capitalism.
I know a lot of you are urbanites, but for anyone who isn’t, check out the USDA 502 direct loan program
My house was literally like 100 yards from being eligible for one.
Front or back yards?
First one, then the other.
That’ll take forever but I’m prepared to play the lawn game.
my municipality fought the USDA redistricting in the 1980s and kept the hamlet where my house is in the program.
People don’t want to twerk anymore!
We have back problems now, Lauren.
At this point, yeah I would twerk on OnlyFans just to get a mortgage…
Going to be wild when people just give up on society and just start eating the ruling and ownership class. I tried warning these assholes if they didn’t give something. Then they would doom their existence. And now you have more people radicalizing everyday because they are being put on the streets.
The problem here is inability to read between the lines. The [bank?]'s message is pretty clear: “Stop polluting my sight, you filthy poor.”
