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

[Tennis]

@Tennisace As a professional in the US banking/mortgage industry with experience in both underwriting loans and developing mortgage products there's a lot that goes into this.

Before I can even really get into it, it would help me if you could define what "they can't afford" represents. Is it strictly people facing foreclosures? Is it people getting approved with high DTI's? Is it the use of Alt A financing (mitigating factors)? Is it being unable to qualify unless you have higher than guideline reserves (basically liquid assets available to pay mortgage payments in times of hardship)?

You can get approved via a few different methods. The main 3 pieces a lender is going to review is your income, asset, and credit profiles. You can get a mortgage almost assuredly as long as you have one of these in very good standing. I.e. Very wealthy people often have significant income or assets, but have some of the worst credit scores you've seen (usually due to be very leveraged via multiple investment properties). You can barely make a payment (i.e. 45% back ratio, that represents the qualified mortgage payment (P&I, Taxes, & Insurance/etc.)), but if you have significant assets to put down you can be approved.

@Zan15 Also for those wondering institutions do often offer low down payment products that don't require PMI. These products often have other limitations (LMI census tract/Income limits, etc.), but they do exist. Typically Banks/CU will offer it as part of the CRA since they'll put the mortgage in their own portfolio rather than sell it to a GSE.

@Fastlane_hellscream Regarding the cost of interest: In your example where you saved up 250k to buy the house cash. Over the course of accruing the cash necessary to make your purchase you were paying what I assume was rent. In this situation (assuming you were previously living in a 150k appraised house, since most people move up, not down) you'd most likely be paying ~1,600 for rent, whereas the owner of the property was likely paying ~ 1,100 for his mortgage on the property. So while you were spending 1,600 a month to gain nothing, you could have purchased a house for the same price you are paying rent for, and then paid down the principal very rapidly significantly reducing the interest cost over life of loan while raking in the few tax benefits of owning a home to even further mitigate the cost. You're inevitably still going to come out worse (say 290k instead of 250k overall), but the cost of living in the home you want 5-7 years sooner might have been worth it. YMMV. Also note: Most wealthy people own significant investment grade real estate. To do this they may own 4-5 mortgages on those properties. They may pay 4% interest, but they're getting a huge ROI on the difference. Cost of debt is very low compared to the cost of capital.

This is without even taking into consideration the ability to invest that excess money you'd have and earn even more.

The assumptions are there to paint the picture based on general things seen in the industry and to portray very non-scientific math. Without knowing your financial picture back then intimately I can't provide more precise numbers (not asking for the info, just giving clarity into the context).

@zenkai I'm a little curious about your friends mortgage. 650 credit score means you're not getting approved for a standard conventional product with a 45k income (assuming her home isn't a 70k property). VA is out, FHA is out with 0 down, it's been a while since I underwrote FHA/VA loans, but last I recall was 96.5 (which meant 3.5% down was minimum, not 0). You could go USDA, but they do actually charge a fee as a down payment alternative (usually rolled into loan amount), and you're subjected to the guarantee fee (which is also usually rolled into your mortgage payment monthly (basically a form of PMI).

I'm talking about people living on the edge. Who have jobs which aren't secure. Who don't have a rainy day fund. Who don't have much family support to back them up. Who are screwed if interest rates go up. Who is advising them? Why are they even being given a mortgage?

[fiestatastic]

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.

All of this, and all of these reasons people posted. Banks hire sales people to convince people that aren't adept at arithmetic that they can or will be able to afford it and take advantage of those suckers. There is obviously an incredibly thriving industry based on suckers and clever people being able to take their money.

[Total Crica]

I'm talking about people living on the edge. Who have jobs which aren't secure. Who don't have a rainy day fund. Who don't have much family support to back them up. Who are screwed if interest rates go up. Who is advising them? Why are they even being given a mortgage?

No one in the USA is required to advise them because to get higher learning you must be able to afford to pay for it, or take out a loan in order to obtain higher learning.

Betsy is going to ensure this happens to basic learning as well. /sigh

[A dot Ham]

If you think about it logically, you should only be taking out a loan if you can make the payments. If you are cutting it so close that if rates rise, you can't make payments, then don't take out a mortgage.

Whatever happened to restraint and living within your means?

If you can't afford to purchase a home then rent or move elsewhere.

Good question.

The answer is the banks don't want you to.

They would much rather foreclose and own your property, paying far less than what its worth.

My little experience:

In 2010 my wife and I decided to take advantage of the lower market that was created as a result of the 2008 stock market crash. We did everything by the books, we got pre-approved for a loan and started looking. Admittedly the excitement of the pre-approval had us looking in a much higher price range than we had previously. But hey... they're the banks... they know what we can afford.

Bottom line between 2008 and 2010 the behavior of the banks and the lenders didn't change one bit. They like to try and convince the public that new policies were put in place, more stringent regulations... but it just isn't so. It isn't even in 2017. The housing market is now as closely controlled as the diamond market. Your the value of your home is just like the diamond. Its true value is nothing more than the depreciated materials. Its controlled value is the fake supply and demand created by the banks.

The housing market will crash again... its just a matter of time. Why? Because nothing changed.

[Jinpachi]

I'm not complaining, I'm happy with my current job.

But you said "Everyone needs to do this" and I'm pointing out that what's written in that blog is simply impossible to do for the vast majority of people.
There is nowhere in this country I can move to where I can get a job paying nearly 3 times my current salary while simultaneously having housing prices as low as 100k.
I'd have to be a part of the 1% of top earners to get a ratio anywhere close to that, but at that point you have enough money not to worry about mortgages anyway.

Ok, so me using the word "everyone" is pretty strong. I'm more referring to people who want to get out from underneath bank control. Not being a slave to a house payment is a very liberating feeling, and is one of the true ways to increase your personal wealth. Yeah, i failed to see you were in Finland as well. I have zero idea what economics in that country are like, so ill take your word for it.

[chazus]

http://www.bankrate.com/finance/mort...ey-down-1.aspx

LOL. Just LOL.

Did you even read the article you linked? The 'no down payment' ones are for military... The only one that's not is for getting stuff that isn't anywhere near civilization... And the 'low' ones are still a payment. 5k to 10k is not something most people can just cough up.

[zenkai]

LOL. Just LOL.

Did you even read the article you linked? The 'no down payment' ones are for military... The only one that's not is for getting stuff that isn't anywhere near civilization... And the 'low' ones are still a payment. 5k to 10k is not something most people can just cough up.

I did, but apparently you didn't. It's always good to have smartass mods on the team who don't know what the fuck they are talking about. If you can't save up 3-6k for a home loan then you are either too poor are too irresponsible with your money to buy a home. Also it's not my fault you don't understand what first time home buyers or PMI is.

[Wrecktangle]

I'm talking about people living on the edge. Who have jobs which aren't secure. Who don't have a rainy day fund. Who don't have much family support to back them up. Who are screwed if interest rates go up. Who is advising them? Why are they even being given a mortgage?

Again, the issue here is what defines a secure job? I'd argue I have a secure job, but I could lose mine at any minute for any reason ya know? It's really hard to define a secure job. I understand what you're saying though (say a barber with no clientele is probably a lot riskier than an IT business liaison), but it isn't quite as simple as you're implying it is/

The issue here of a rainy day fund is another tough to define situation. I have 20k liquid in my rainy day fund. To me that's enough (mtg payment incl taxes/HOI is just a hair over 1k, I'm otherwise debt free). To me that's a healthy fund, but I haven't had a need to use it so I couldn't say if it was enough or not ya know? Your average mortgage requires 6 months reserves to qualify. That means you need to have liquid assets of at least 6 months to cover your back ratio (back ratio is defined as all income divided by all debt payments including your new mortgage payment (taxes/ins included). Would you say that 6 months is a fair value from a risk perspective or should that guideline be raised? Say to 1 year? 5 years? If so why?

The only people who do ARM's are typically people who know how to use the benefits of them. In my years of underwriting very few inexperienced mortgagee's buy into the allure of a low variable rate mortgage (ARM) so the rates rising piece is largely null.

The mortgage transaction itself is fairly well protected from putting people in bad situations based STRICTLY from the mortgage payment perspective. What a lot of people aren't aware of when getting a mortgage is that there are other non-debt bills one has to pay every month.

Cable, Gas, Electric, Water, Sewer, (maybe septic/well fees if you're in that situation) Phone, Internet, TV, FF14 , Food, Gasoline, Maintenance, etc. These all cost money. A lot of money sometimes, but it isn't debt so the ratios don't account for it. For reference my total utilities bill per month is roughly $300 USD, a little higher in the summer, a little lower in the winter. My utilities are roughly 30% of my mortgage payment so you can see how an uneducated borrower could miscalculate. You don't even want to see my food bill. Most people who are just buying a home have no idea what they spend on food a month, let alone things like entertainment, etc. This is before you even get to closing when most people get surprised that they need to come up with some extra cash to pay taxes in arrears, maybe they need to escrow taxes and insurance (which requires you to have 2 months in reserve sitting in an account doing absolutely nothing for you), or maybe there's just other fees they weren't completely aware of.

When you factor all of them in you can see where people get a bad situation. Me personally, I already had a budget designed and underwrote my own scenario prior to applying so I knew exactly what I was walking into.

All of this, and all of these reasons people posted. Banks hire sales people to convince people that aren't adept at arithmetic that they can or will be able to afford it and take advantage of those suckers. There is obviously an incredibly thriving industry based on suckers and clever people being able to take their money.

That's not true. Banks do hire sales people, but sales people have 0 control over whether someone is approved/can afford a home. That's the underwriting department. Also no mortgage originator (a sales person) wants to put a loan in that is guaranteed to be declined (i.e. outside of your affordable realm).

They would much rather foreclose and own your property, paying far less than what its worth.

My little experience:

In 2010 my wife and I decided to take advantage of the lower market that was created as a result of the 2008 stock market crash. We did everything by the books, we got pre-approved for a loan and started looking. Admittedly the excitement of the pre-approval had us looking in a much higher price range than we had previously. But hey... they're the banks... they know what we can afford.

Actually, that's the LAST thing banks want to do. They do not want a house on their books at all. That means that they have to sell the house for pennies on the dollar and every second it sits on their books they're losing money.

The issue in your scenario was that you and your wife were ignorant of your own financial picture and didn't understand how the mortgage transaction works. The bank will measure the risk and what you can afford based on debt. Not all expenses in this world are debt. The bank isn't going to tell you maybe you should go for a smaller house, that's a decision you need to make. The bank will tell you if you're approved for a dollar amount. You NEVER want to use all that you're given. That's a fools mistake.

For what it is worth my townhome cost me 165k. I was pre-approved up to 240k. That would have put my payment around 1,800 or so. I could easily afford that when speaking to strictly debt (i.e. car payment, student loans, mortgage payment, etc.). I probably wouldn't be shopping at whole foods anymore, or going to the movies, or thinking about buying a new car anytime soon though. it's not the banks responsibility to measure those aspects, its yours as the borrower.

Ok, so me using the word "everyone" is pretty strong. I'm more referring to people who want to get out from underneath bank control. Not being a slave to a house payment is a very liberating feeling, and is one of the true ways to increase your personal wealth. Yeah, i failed to see you were in Finland as well. I have zero idea what economics in that country are like, so ill take your word for it.

Not entirely true. I covered this earlier so I'll say it again. You'll find that some of the wealthiest people have numerous mortgages across their investment properties. If they're paying 4% interest and making 20% ROI that's a HUGE gain. Remember that the cost of debt is almost always less than the cost of capital (your own money).

Let's say that you had 200k to play with. You could buy a house cash and live mortgage free. You could buy that house with a mortgage @ 4%, rent it to make a 20% ROI, then invest that 200k intelligently.

In which situation would more wealth be generated?

Now with that said I cannot discount the liberating feeling of being debt free. It truly is a wonderful thing. I enjoyed it quite a bit before buying my home (paid off car/student loans).

[A dot Ham]

Actually, that's the LAST thing banks want to do. They do not want a house on their books at all. That means that they have to sell the house for pennies on the dollar and every second it sits on their books they're losing money.

The issue in your scenario was that you and your wife were ignorant of your own financial picture and didn't understand how the mortgage transaction works. The bank will measure the risk and what you can afford based on debt. Not all expenses in this world are debt. The bank isn't going to tell you maybe you should go for a smaller house, that's a decision you need to make. The bank will tell you if you're approved for a dollar amount. You NEVER want to use all that you're given. That's a fools mistake.

Which explains why people take out mortgages they can't afford...

IF the banks were truly concerned about you actually making payments. One might think they would want to give you an accurate picture. So to tell someone they are pre-approved for a certain amount is true... if that person doesn't plan on paying for utilities, food, a car, gas, entertainment.

Here is where banks gain on the scheme.

Banks are now real estate investors (by default *no pun intended*) when the stock market crashed in 2008 and millions of Americans lost their homes. Banks became owners of a lot of real estate they didn't want. They're in the finance business, NOT the real estate market. Per GAAP they are supposed to sell this property in a timely manner. There are 2 problems with that. (1) It isn't worth what they have it at on the books (2) In a buyer's market where the inventory is above demand... prices should be driven down... not up. Bad news for someone who just found themselves thrown into the real estate market.

So what do you do? You control the market. You can't suddenly release all these homes at once (home sale prices would hit rock bottom). So they hold the inventory. Creating a false demand. By creating a demand, it drives prices back up (in the hopes of getting back to book pricing).

One way you know that banks don't care if you can make payments is they AREN'T working with home owners ANYMORE. Originally shortly after and a few years following the crash. They were working with people to refinance, to pay SOMETHING on the mortgage. Now they prefer to release homes at a steady rate, and people that are ACTUALLY in the business of real estate are buying these bank owned homes.

So yes... if you can make the payments... Great! The bank earns interest on the note. If not... its not a huge loss as your sale is helping to create and inflate the market. The number of homes being sold to real estate investors > number of homes being sold to families/homeowners.

[Wrecktangle]

Which explains why people take out mortgages they can't afford...

Banks are now real estate investors (by default *no pun intended*) when the stock market crashed in 2008 and millions of Americans lost their homes. Banks became owners of a lot of real estate they didn't want. They're in the finance business, NOT the real estate market. Per GAAP they are supposed to sell this property in a timely manner. There are 2 problems with that. (1) It isn't worth what they have it at on the books (2) In a buyer's market where the inventory is above demand... prices should be driven down... not up. Bad news for someone who just found themselves thrown into the real estate market.

So what do you do? You control the market. You can't suddenly release all these homes at once (home sale prices would hit rock bottom). So they hold the inventory. Creating a false demand. By creating a demand, it drives prices back up (in the hopes of getting back to book pricing).

One way you know that banks don't care if you can make payments is they AREN'T working with home owners ANYMORE. Originally shortly after and a few years following the crash. They were working with people to refinance, to pay SOMETHING on the mortgage. Now they prefer to release homes at a steady rate, and people that are ACTUALLY in the business of real estate are buying these bank owned homes.

So yes... if you can make the payments... Great! The bank earns interest on the note. If not... its not a huge loss as your sale is helping to create and inflate the market. The number of homes being sold to real estate investors > number of homes being sold to families/homeowners.

Not sure what you do for a living, but someone who's intimately familiar with both the banking and mortgage industry I can say the scenario you're outlining is not real.

Banks will do everything in their power to prevent foreclosure because it is worst case for them. If you were truly underwater you'd use a HARP loan. This would HOPEFULLY put you in a better situation (this is being phased out in a few years though). Not everyone can be cured by HARP. For those that can't, if you're unable to negotiate with the bank for some level of debt relief a short sale would be your next option. Then lastly foreclosure.

Bank's don't ever want to hold real estate on their books to control the market. They lose more money this way. Every second they hold that property they are bleeding cash. That's why you see Banks neglect a lot of REO (real estate owned) properties putting as little money in it as possible in hopes that they drop it quickly.

[A dot Ham]

Not sure what you do for a living, but someone who's intimately familiar with both the banking and mortgage industry I can say the scenario you're outlining is not real.

Banks will do everything in their power to prevent foreclosure because it is worst case for them. If you were truly underwater you'd use a HARP loan. This would HOPEFULLY put you in a better situation (this is being phased out in a few years though). Not everyone can be cured by HARP. For those that can't, if you're unable to negotiate with the bank for some level of debt relief a short sale would be your next option. Then lastly foreclosure.

Bank's don't ever want to hold real estate on their books to control the market. They lose more money this way. Every second they hold that property they are bleeding cash. That's why you see Banks neglect a lot of REO (real estate owned) properties putting as little money in it as possible in hopes that they drop it quickly.

I am an accountant for one of those real estate firms that buys out those bank owned properties once a month.

So as someone who is equally intimately familiar with the process I know what I am talking about. It does happen. Its the only reason my company exists, and the only way I get a paycheck.

In your fantasy world no one should/would ever buy a home they can't afford. Which essentially fails to even recognize the OPs question.

IF what you are saying is true. Then this wouldn't be a large enough problem for the OP to recognize and ask questions about. It is... so all or part of what you say CAN'T be true.

[Rasulis]

I am an accountant for one of those real estate firms that buys out those bank owned properties once a month.

So as someone who is equally intimately familiar with the process I know what I am talking about. It does happen. Its the only reason my company exists, and the only way I get a paycheck.

In your fantasy world no one should/would ever buy a home they can't afford. Which essentially fails to even recognize the OPs question.

IF what you are saying is true. Then this wouldn't be a large enough problem for the OP to recognize and ask questions about. It is... so all or part of what you say CAN'T be true.

At least according to this article, the standard for getting a loan is too tough for most people now.

http://www.msn.com/en-us/money/reale...BJVW?li=AA4Zjn

From talking to my advisor, he told me that his bank won’t make real estate loans under 100k. Between the low interest rate, and the rigorous loan application review process, they don’t make money doing small loans. Not much of a problem in San Diego, or for that matter the coastal cities, but a big problem in other part of the US.

[A dot Ham]

At least according to this article, the standard for getting a loan is too tough for most people now.

http://www.msn.com/en-us/money/reale...BJVW?li=AA4Zjn

From talking to my advisor, he told me that his bank won’t make real estate loans under 100k. Between the low interest rate, and the rigorous loan application review process, they don’t make money doing small loans. Not much of a problem in San Diego, or for that matter the coastal cities, but a big problem in other part of the US.

Ya well in Escondido north county SD (even some of the bad parts) I don't know where you'd find a home for less than 100k anyway.

I will concede that California may be an anomaly.

[Wrecktangle]

I am an accountant for one of those real estate firms that buys out those bank owned properties once a month.

So as someone who is equally intimately familiar with the process I know what I am talking about. It does happen. Its the only reason my company exists, and the only way I get a paycheck.

In your fantasy world no one should/would ever buy a home they can't afford. Which essentially fails to even recognize the OPs question.

IF what you are saying is true. Then this wouldn't be a large enough problem for the OP to recognize and ask questions about. It is... so all or part of what you say CAN'T be true.

Oh good, I'm actually glad that you do have some insight into this. It actually brought a very good point to my attention I didn't think about.

All of my expertise lies in the process BEFORE you ever see an REO. All of your expertise is drawn from post bank operations. That explains why I didn't understand what you're talking about, and that explains why you think what you do. You're looking at the banks portfolio after they've exhausted all options. That means to you, the only option you see is them throwing in the towel. I wasn't looking at anything once it leaves our hands.

I think that you're confusing your operations with what a bank is doing. I don't doubt that as an REO company that buys properties off balance sheets that you would possibly hold them and release them at different times (afterall if you purchased 2 foreclosed homes in the same block, you wouldn't put both on the market at the same time)/

My entire point in response to you was that banks do not engage in this activity like you're saying. They don't try to price fix or sit on non performing assets.

My fantasy world? Not sure where that comment is coming from. I don't live in a fantasy world. I actually gave very clear mechanical examples of the facets of the mortgage transaction that people don't consider when taking out a mortgage. I then even asked for clarification as to the definitions of the OP to better answer the question.

[Tennis]

Again, the issue here is what defines a secure job? I'd argue I have a secure job, but I could lose mine at any minute for any reason ya know? It's really hard to define a secure job. I understand what you're saying though (say a barber with no clientele is probably a lot riskier than an IT business liaison), but it isn't quite as simple as you're implying it is/

The issue here of a rainy day fund is another tough to define situation. I have 20k liquid in my rainy day fund. To me that's enough (mtg payment incl taxes/HOI is just a hair over 1k, I'm otherwise debt free). To me that's a healthy fund, but I haven't had a need to use it so I couldn't say if it was enough or not ya know? Your average mortgage requires 6 months reserves to qualify. That means you need to have liquid assets of at least 6 months to cover your back ratio (back ratio is defined as all income divided by all debt payments including your new mortgage payment (taxes/ins included). Would you say that 6 months is a fair value from a risk perspective or should that guideline be raised? Say to 1 year? 5 years? If so why?

The only people who do ARM's are typically people who know how to use the benefits of them. In my years of underwriting very few inexperienced mortgagee's buy into the allure of a low variable rate mortgage (ARM) so the rates rising piece is largely null.

The mortgage transaction itself is fairly well protected from putting people in bad situations based STRICTLY from the mortgage payment perspective. What a lot of people aren't aware of when getting a mortgage is that there are other non-debt bills one has to pay every month.

Cable, Gas, Electric, Water, Sewer, (maybe septic/well fees if you're in that situation) Phone, Internet, TV, FF14 , Food, Gasoline, Maintenance, etc. These all cost money. A lot of money sometimes, but it isn't debt so the ratios don't account for it. For reference my total utilities bill per month is roughly $300 USD, a little higher in the summer, a little lower in the winter. My utilities are roughly 30% of my mortgage payment so you can see how an uneducated borrower could miscalculate. You don't even want to see my food bill. Most people who are just buying a home have no idea what they spend on food a month, let alone things like entertainment, etc. This is before you even get to closing when most people get surprised that they need to come up with some extra cash to pay taxes in arrears, maybe they need to escrow taxes and insurance (which requires you to have 2 months in reserve sitting in an account doing absolutely nothing for you), or maybe there's just other fees they weren't completely aware of.

When you factor all of them in you can see where people get a bad situation. Me personally, I already had a budget designed and underwrote my own scenario prior to applying so I knew exactly what I was walking into.



That's not true. Banks do hire sales people, but sales people have 0 control over whether someone is approved/can afford a home. That's the underwriting department. Also no mortgage originator (a sales person) wants to put a loan in that is guaranteed to be declined (i.e. outside of your affordable realm).



Actually, that's the LAST thing banks want to do. They do not want a house on their books at all. That means that they have to sell the house for pennies on the dollar and every second it sits on their books they're losing money.

The issue in your scenario was that you and your wife were ignorant of your own financial picture and didn't understand how the mortgage transaction works. The bank will measure the risk and what you can afford based on debt. Not all expenses in this world are debt. The bank isn't going to tell you maybe you should go for a smaller house, that's a decision you need to make. The bank will tell you if you're approved for a dollar amount. You NEVER want to use all that you're given. That's a fools mistake.

For what it is worth my townhome cost me 165k. I was pre-approved up to 240k. That would have put my payment around 1,800 or so. I could easily afford that when speaking to strictly debt (i.e. car payment, student loans, mortgage payment, etc.). I probably wouldn't be shopping at whole foods anymore, or going to the movies, or thinking about buying a new car anytime soon though. it's not the banks responsibility to measure those aspects, its yours as the borrower.



Not entirely true. I covered this earlier so I'll say it again. You'll find that some of the wealthiest people have numerous mortgages across their investment properties. If they're paying 4% interest and making 20% ROI that's a HUGE gain. Remember that the cost of debt is almost always less than the cost of capital (your own money).

Let's say that you had 200k to play with. You could buy a house cash and live mortgage free. You could buy that house with a mortgage @ 4%, rent it to make a 20% ROI, then invest that 200k intelligently.

In which situation would more wealth be generated?

Now with that said I cannot discount the liberating feeling of being debt free. It truly is a wonderful thing. I enjoyed it quite a bit before buying my home (paid off car/student loans).

Then that's not a secure job. If you're working as a temp, it's not secure. If you're working in a field where people are laid off often. That ain't secure. A industry which is on shaky ground. It ain't secure.
Me on the other hand. I'm in a heavily unionized field so I am pretty confident of job security.

It's time for the government to regulate this better. Higher downpayments for one. Enough of pushing people to own homes when they aren't in the position to.

[Wrecktangle]

Then that's not a secure job. If you're working as a temp, it's not secure. If you're working in a field where people are laid off often. That ain't secure. A industry which is on shaky ground. It ain't secure.
Me on the other hand. I'm in a heavily unionized field so I am pretty confident of job security.

It's time for the government to regulate this better. Higher downpayments for one. Enough of pushing people to own homes when they aren't in the position to.

So you want them to raise the down payment requirements? Allow me to ask you this:

If a person is struggling to afford $1,100 USD rent, would them getting a mortgage that only costs them ~$800 monthly be the smarter financial move or not? Think if you were in the position of your income is $2,000 net after taxes (roughly 34k annually). Your existing rent situation costs you a hair over 50% of your take home pay. In this situation a person is likely living very close to paycheck to paycheck, would it be better for them to try and get a mortgage to reduce their monthly obligations? y/n? Would raising the down payment requirements hurt this individual assuming that living paycheck to paycheck has preventing them from saving enough for a 20% down payment?

With regards to temp employment there are 2 specific scenarios that are relevant in case you're not aware. There are 1099 contractors (i.e. you're your own boss and are hired on an as-needed basis). The other is that you are employed by a temp agency, and sent to a specific company for assignment.

Just because you work in a temporary setting doesn't mean you're always more risky. In fact, the Nursing/IT/Finance industries are all very stable and heavily utilize temp employee hierarchy and are expected to grow (I checked IBIS to confirm this).

As long as a lender can verify and trace consistent placement and income you're treated no differently than if you were employed permanently. It is as if you perceive these people as less than you for working in a different way than you are accustomed to, despite the fact that a lot of these people make more money than say, you or I. Some people like the 1099 life because they get to make the rules and get to pick their schedule. Some like the temp agency life because it keeps the job fresh by getting new assignments whenever you want and they do the legwork for you.

[Total Crica]

Then that's not a secure job. If you're working as a temp, it's not secure. If you're working in a field where people are laid off often. That ain't secure. A industry which is on shaky ground. It ain't secure.
Me on the other hand. I'm in a heavily unionized field so I am pretty confident of job security.

It's time for the government to regulate this better. Higher down-payments for one. Enough of pushing people to own homes when they aren't in the position to.

There NO job that is secure.

Just because you have a union doesn't mean that you will always have a job.

If someone doesn't want to pay for the job you are doing anymore, you don't have a job until you find another job that someone wants to pay you for.

How do you want the government to regulate places to live when no matter where you live you MUST pay to live there?

Are you advocating for the government to own all of the land and everyone pay the government rent?

[Kristry]

It is always a good idea to keep track of your monthly expenses. I saw a list of expenses online that you don’t necessarily have to pay monthly payments for. Taking a look at the list I think that most of them are pretty true. It is not a good idea to pay for something that is not important especially if you have a limited salary. Life is all about keeping priorities. Prioritize your needs and choose what is most important to you first. We can’t deny the fact that money is important. Just think.