Author Topic: Loan officer: I’m seeing middle class homebuyers take on $7,000 mortgages thinking they can ‘always  (Read 696 times)

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Offline GtHawk

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https://finance.yahoo.com/news/loan-officer-m-seeing-middle-000641114.html

I can barely afford my own $2000 mortgage. It's at 3.5% so I'm not refinancing either.
Seems to me we have seen this before wen lenders were forced to give loans to people who weren't even close to being qualified and the only ones that made out were the bankruptcy attorneys and the the big banks while the taxpayer payed for all the failed S&L's and banks. It was difficult enough when my wife and I both worked to pay our house in California and once Bammy killed the economy it was impossible. My daughter and SIL bought a nice little 3bdrm+2bath and a pool end of last year in a good zip code and cost $1.1 million I don't ask what their payment is because it has to be choking **nononono*

Online DefiantMassRINO

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With any luck, I'll have my mortgage paid off by the end of this year.

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Offline Cyber Liberty

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This is early 80's mentality.  I knew people at the time who swore their payments would come down when they streamlined their mortgages.  I told them they were being stupid because they would never be approved for a new mortgage. 

I was correct, and they all fell into foreclosure.
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Offline LadyLiberty

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Is there any mention of housing prices possibly being in a bubble? If that's the case and prices come back to more reasonable levels, they had better have a good bit of equity if they expect to refi. That home that they paid $700k for may appraise at $550K or $600k by the time the interest rates come down, so without a good equity cushion on the original loan the payoff of that loan could be higher than the amount lenders are willing to finance on a new mortgage.

Online Polly Ticks

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This is early 80's mentality.  I knew people at the time who swore their payments would come down when they streamlined their mortgages.  I told them they were being stupid because they would never be approved for a new mortgage. 

I was correct, and they all fell into foreclosure.

Exactly right.  Never base financial decisions on "hope".  Live under your means and don't take on a house payment that isn't at least 95% comfortable.
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Offline sneakypete

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I have 13 acres on an Island,and  mine is the only house here. After elevating a couple of acres to avoid tidal floods during storms and putting in a new septic tank for my house and another for my workshop,I bought a repossessed  double wide that  was 2 years old and had it set up to live in. This  was in the early 80's,and I am still living in it.

IIRC,I paid 13 grand for the old,rotten house that was already here on the land,around 15 grand for the repo doublewide,including getting it hauled here and set up,a couple of grand for fill dirt to raise the lot,a couple of grand for two new septic tanks,and a forgotten amount for to buy a 25x50 quonset hut workshop with a cement floor,electric 14x14 foot garage doors at each end,AC,heat,hot water heater,toilet,and shower stall.

I did it all on over a period of time as I had the cash money to do it,and have never had a house payment.

The downside was I had to drive right at 100 miles a day,round trip,to get to work and then get back home,after working the maximum amount of overtime I could get,6 days a week. I did cut back on the overtime after getting all this done,but still had that long round trip drive every day.

Been retired for over 20  years now,so I haven't had a daily trip anywhere I haven't wanted to go for all that time.

Sometimes you just have to do what you HAVE to do to "live free",not what you WANT to do. There were some very nice neighborhoods in the city  where I worked that I could have lived,but chances are I would still be paying a mortgage payment every  month if I had done that. Which was a price I was not willing to pay.
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Online DefiantMassRINO

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It would take mass layoffs to pop bubbles in some real estate markets.

In Greater Boston, the supply of residential housing has not kept pace with population growth.
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Offline Hoodat

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I just bought a house last month.  I had to pay a $2,100 penalty for having good credit.
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Online DefiantMassRINO

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Damn, I forgot about the Chump Tax.
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Offline sneakypete

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I just bought a house last month. I had to pay a $2,100 penalty for having good credit.

@Hoodat

Say WHAT????
Anyone who isn't paranoid in 2021 just isn't thinking clearly!