Why do people take out Mortgages they can't afford?

[Rennadrel]

So it's fair that white couple across the street has 5 kids vs my 1 and we both pay the same tax on the same size house and property while they are using 4x as much resources???

Btw a 2 to 3 family house apt doers not pay anywhere near 2x 3x the tax...we should triple their taxes too???

No, that isn't fair either. That is my point, doesn't matter what ethnicity you are, if you are occupying the same property with more people as another family, you should pay higher property taxes.

[Tennis]

Because the average person is fucking terrible with math.

This has been happening for a while. Why don't we reform the education system then.

[Total Crica]

This has been happening for a while. Why don't we reform the education system then.

Because they voted in Trump, who voted in Betsy to be in charge of our Education, and she only wants to profit from it, not actually teach anyone

Sorry, unless Trump gets booted out, we have at LEAST 4 years of regression happening here in the USA. Count us out for now, Canada.

And watch your borders for the immigrants fleeing from Trump. =P

[Aori]

Buying a home is almost always better than renting unless for whatever reason you fail at maintenance or money is no object. Renting is money gone, you'll never see it again. People take mortgages out usually because they are making the money to pay for it at the time. Unfortunately, circumstances change, it is impossible to foresee the future even a month in advance.

[Unhinged]

Why do people use credit cards and not pay the entire thing off at the end of the month?
Why do people take out a loan/finance a car when they don't have the money to just buy a vehicle? (Hint: having to finance a car means you can't afford it.)
Why do people do a lot of shit that's really inefficient and illogical? Because the vast majority of people are really stupid.

Using finance/loans is can be smart choice if you can make that money work for you else where to earn nore than the interest. Also when car companies do 0.1% interet delas etc... you are evem betyer off leaving the money in the bank and paying down the loan overtime as you would have more moeny in the long. Blanket statements are stupid.

[Stormspellz]

So it's fair that white couple across the street has 5 kids vs my 1 and we both pay the same tax on the same size house and property while they are using 4x as much resources???

Btw a 2 to 3 family house apt doers not pay anywhere near 2x 3x the tax...we should triple their taxes too???

what "resources" are you talking about? the tax is on the property, not how many bodies are on it .

most utilities are pay per use, so what the fuk are you talking about.

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No, that isn't fair either. That is my point, doesn't matter what ethnicity you are, if you are occupying the same property with more people as another family, you should pay higher property taxes.

That makes no sense, property tax is on the property not how many people are on it,

[Deleted]

...

Honest question: Do you pay for your own place and do you work?

[TheCount]

I don't take loans or use my credit card for anything unless I know I have the capital to pay it off right then. Mortgages, I can see some people being a bit looser with their cash but personally I would not do anything over the top.

I also don't pay off my credit cards at the end of the month, I could but with budgeting I manage to live comfortably making reasonable monthly payments.

[xero5141]

(Hint: having to finance a car means you can't afford it.)

A very small percentage of people can actually afford to just go buy a car, financing started as a fairly innocent practice and has been bastardized into it's current form.

And if you can afford it, you probably went to college to be able to do so, which was paid for by financing. Or your parents helped you get your first vehicle, or something along those lines. Hell, entire countries are run on a series of loans.

[Zombie Chicken]

Rent is way less. A 2 bedroom is like $1000-1500 a month lets say. A far cry from what a mortgage is gonna cost. Plus the renting fee usually includes electricity, taxes and other utilities.

And you're also living on someone else's whims. If they decide they want you out then there's nothing you can do about it.

[Delana]

They'd still have to pay rent. A mortgage is no different in that regard. It's a monthly fee you need to have money to pay for. Sure, you can move out of a rental, but then you have fees you likely can't afford, and you've just broken your lease making it hard to get a new place...

Just in case somebody hasn't ever run the numbers, it's laughably more affordable to make your mortgage payments (the interest is tax deductible too) than to rent a comparable place.

If you're happy living in the place long term, it's something you really should do. The investment is also highly leveraged at the beginning, so you should check after 2 or 3 years to see if the property value has gone up. If it has, you could make huge ROI (say 20% on your money or more) by selling and just getting another place. If the value goes down, who cares. You're happy living there. keep living there.

[Independent voter]

Half of American poor own their own homes.

[jcf190]

...Renting is money gone, you'll never see it again...

So is homeowners insurance, property taxes and home maintenance and repair. (All of which go up as your property increases in value). You also have to actually sell your home to see a return on your investment...which leaves you without a place to live. Owning a home isn't a big (or wise) investment like it was in the good-old-days, especially with the current housing market. You really need to consider your options before buying. A lot of people in good financial shape might see a better return over 20-30 years if they rent and use the money saved to invest elsewhere.

[Aori]

So is homeowners insurance, property taxes and home maintenance and repair. (All of which go up as your property increases in value). You also have to actually sell your home to see a return on your investment...which leaves you without a place to live. Owning a home isn't a big (or wise) investment like it was in the good-old-days, especially with the current housing market. You really need to consider your options before buying. A lot of people in good financial shape might see a better return over 20-30 years if they rent and use the money saved to invest elsewhere.

It is like people are comparing $600 a month rentals to million dollar mortgages.

Maintenance and repair is cheap as long as you keep up with it, the expense is very minor, can be a pita when it happens but minor cost wise. Mortgage+taxes are the biggest cost factors, I mean I live in Illinois, taxes suck. Lets take a $150,000 home which is medium/highend for this area, mortgage+taxes+insurance is going be around $1,000 a month. You're not going to rent that kind of home for $1,000, not in my city. Sure you have other expenses like maintenance but it isn't huge, a lot of rentals require you to manage yard work and the like on your own. Many rentals also require you to have renters insurance.

I could find a decent home for $40-50k on a quarter/half acre plot. Paying everything for it is going to be cheaper than renting. I don't know where you get this misconception that renting is going to leave people with money to invest.

I also don't know why people keep bringing up people not having a place to live if they can't pay their mortgage for whatever reason.. as if renters can't be evicted for just about anything.

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Half of American poor own their own homes.

Because it is cheaper or they were handed down.

[Mormolyce]

Sometimes it's because they could afford it but unexpected things happened in their lives.
Or... some people are really bad at managing money.
Or... some people act like there's no tomorrow.

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Half of American poor own their own homes.

Is said home an apple barrel with leg holes cut in the bottom?

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Predatory Lending

https://www.debt.org/credit/predatory-lending/

Mmmm. That too.

Sincerely, someone who used to work in credit cards :P

[Captain N]

Did this thread go into a place asking why some people buy their houses instead of rent? Depending on the cost of the house + utilities and the length of the mortgage it can be a whole lot cheaper to buy your own home than to rent. In most cases the trade-off is being unable to leave that residence for a long period of time unless you can get someone else to buy your home at the cost of your mortgage or higher.

For me personally I'm much more comfortable paying a $3000+/month mortgage than I am paying it to a landlord. At least with the property being mine I can make all the proper changes to it I want and make the house worth more than when I initially bought it. Huzzah for foreclosures in affluent neighborhoods!

[Glorious Leader]

This question is framed incredible poorly. A mortgage is a negotiation between two groups. Usually an individual or couple and a financial institution. The financial institution is usually the more powerful of the parties. Once this is understood the question then becomes why are banks allowed to make such shitty mortgages?

[Total Crica]

This question is framed incredible poorly. A mortgage is a negotiation between two groups. Usually an individual or couple and a financial institution. The financial institution is usually the more powerful of the parties. Once this is understood the question then becomes why are banks allowed to make such shitty mortgages?

Because they are more powerful then the average person financially. It is literally why anyone is allowed to do anything that poor people are not.

[Glorious Leader]

Because they are more powerful then the average person financially. It is literally why anyone is allowed to do anything that poor people are not.

The strong do what they will and the weak do what they must

[schwarzkopf]

A lot of people took out mortgages on houses that have since devalued significantly - this was the GFC in action.

When you borrow to buy a house, you are comparing the mortgage vs rent. So a lot of people will have mortgages that were stable pre GFC that are not now.