Danger: The risk lurking in the US mortgage market

[Chromeshellking]

I can't believe whats happened before may happen again.

I know right? like setting fire to your own dick and doing again? The sad thing is money matters more than actual integrity.

[AlphaOut]

Sure if people are living paycheck to paycheck and cannot afford maintenance costs or property taxes. But the obscene raise in rental rates means that it is actually cheaper to own a home and pay a mortgage in several rental markets.

I have to disagree. Owning a home is extremely beneficial. But the responsibility of unpredictable expenses, and the means to provide those expenses, make renting easier for some people. Even if the mortgage rate is the same, or even 15% less than your rent.

A personal example I'll give is on the first home I owned. I had the water sprinkler basically shit itself after the first year. There's $800. HOA demands good lawns and all that. Shortly after my garage door motor and springs went to shit, there's $600. HOA states no more than 1 car can be in your driveway for more than 24 hours. Then, my back patio went to shit because they seller had done it himself with stone and packed sand. Which looked nice for a couple years, but clearly wasn't a professional. I eventually remodeled my entire back area for $8,000. This doesn't include the silly small stuff a home owner has. As well as the additional remodeling to make it "your home." Renting was way easier. I provide my management with this amount of cash and I'm good to go no matter what.

Finally, I bought a bunch of land with no HOA and finally built a house to my standard. The bonus of owning a home was the money I put into it I got back in multiples; plus the growing cost of housing at the time.

[Ghostpanther]

I have to disagree. Owning a home is extremely beneficial. But the responsibility of unpredictable expenses, and the means to provide those expenses, make renting easier for some people. Even if the mortgage rate is the same, or even 15% less than your rent.

A personal example I'll give is on the first home I owned. I had the water sprinkler basically shit itself after the first year. There's $800. HOA demands good lawns and all that. Shortly after my garage door motor and springs went to shit, there's $600. HOA states no more than 1 car can be in your driveway for more than 24 hours. Then, my back patio went to shit because they seller had done it himself with stone and packed sand. Which looked nice for a couple years, but clearly wasn't a professional. I eventually remodeled my entire back area for $8,000. This doesn't include the silly small stuff a home owner has. As well as the additional remodeling to make it "your home." Renting was way easier. I provide my management with this amount of cash and I'm good to go no matter what.

Finally, I bought a bunch of land with no HOA and finally built a house to my standard. The bonus of owning a home was the money I put into it I got back in multiples; plus the growing cost of housing at the time.

I dispise HOA's. They are like dictators over your own property. One day when I get too old to stay here, I may be forced to live in a senoir's citizens condo, which will be part of a HOA I am sure. But I will not go quietly into the night. :P

[P for Pancetta]

I dispise HOA's. They are like dictators over your own property. One day when I get too old to stay here, I may be forced to live in a senoir's citizens condo, which will be part of a HOA I am sure. But I will not go quietly into the night. :P

You could prepare for such moment already, you just need a single floor house and some savings, if you're under 40 chances are by the time you need assistance there'll be robots who can help you.

[Ghostpanther]

You could prepare for such moment already, you just need a single floor house and some savings, if you're under 40 chances are by the time you need assistance there'll be robots who can help you.

My home is paid for. Has been for decades. We doubled up on our payment when I was still working and had it paid off long before I retired. Saved a ton in interest money. I plan on staying here until I can not get out of my bed without assistance. :P Maybe I will die before then.

[Voidwielder]

US is due for a recession, will start either this Autumn or next Spring.

[Low Hanging Fruit]

Do you always poison the well when making a post? Grow up.

Wow, someone is awfully sensitive. Does a tear drip down your check at least once a day? I was just talking about the topic.

[Ghostpanther]

US is due for a recession, will start either this Autumn or next Spring.

Oh guru, how long am I going to live? Does your crystal ball tell stuff like that? The problem with making predictions, a lot of posters will not be around when the prediction is suppose to take place. So no way to remind them. I mean you could be right, but you are not really going out on a limb.

I mean people such as Al Gore can be reminded of his predictions of the polar regions being totally free of of ice in 7 years, when he made the prediction in 2005. And many of the celebrities and famous people predicted Trump would never be elected President. We do not even know what the interest rates will be next week, let alone months or years from now.

[Dug]

Oh guru, how long am I going to live? Does your crystal ball tell stuff like that? The problem with making predictions, a lot of posters will not be around when the prediction is suppose to take place. So no way to remind them. I mean you could be right, but you are not really going out on a limb.

I mean people such as Al Gore can be reminded of his predictions of the polar regions being totally free of of ice in 7 years, when he made the prediction in 2005. And many of the celebrities and famous people predicted Trump would never be elected President. We do not even know what the interest rates will be next week, let alone months or years from now.

Only you and your fellow Trumpsters still harp on about Al Gore, a non scientist. Get over it already.

[Ghostpanther]

Only you and your fellow Trumpsters still harp on about Al Gore, a non scientist. Get over it already.

Lol! Hit a nerve?

[morbidari]

I am sorry that you do not have any overview of the finances.
It's alright! Not many people understand it

Simply said:
"I want a Spectral Tiger from you. But I do not have the gold."
You: "Ok, you will pay me with interest."
"I am currently paying X in interests to Y people."
You: "Yeah, let's wait with the trade until you are actually able to pay ME."

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That's why we must MAKE the people to follow those rules "You won't get any money until:"

See WoW analogy: "I won't heal you unless you actually stop standing in fire."

You know so little about how finances and credit work that it gives me a headache. Your spectral tiger analogy doesn’t work, because it lacks one key point of finances: repossession. Missed too many payments on the tiger? I’ll be taking it back and selling it to the next person.

Take me for example. I have a small balance on my credit card that will be paid off in a week, I have a car loan that is very small because I got a cheap car. Technically I’m in debt so I wouldn’t qualify for a loan according to you? See what you didn’t take into account, something that anyone with even a 5 second long education into finances would have done, is look at my current debt and rate of pay, and decide based on expenses and history of payment, how much and if I should be given a loan. This is how credit ratings work. It’s almost like a bunch of people who know what they are talking about made a system to determine these thing!

[Dug]

Lol! Hit a nerve?

It's annoying to see yeah because you know its a disingenuous point to make. Aren't you like a much older than average poster around here? Why do you argue like some child? Make valid points and stop trying to get a rise out of people. It's immature.

[Ghostpanther]

It's annoying to see yeah because you know its a disingenuous point to make. Aren't you like a much older than average poster around here? Why do you argue like some child? Make valid points and stop trying to get a rise out of people. It's immature.

So are you for getting so upset over a gaming forum comments. It's immature. Any which do, place them on ignore and move on. Unless you are the type which likes to stroke your ego.

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You know so little about how finances and credit work that it gives me a headache. Your spectral tiger analogy doesn’t work, because it lacks one key point of finances: repossession. Missed too many payments on the tiger? I’ll be taking it back and selling it to the next person.

Take me for example. I have a small balance on my credit card that will be paid off in a week, I have a car loan that is very small because I got a cheap car. Technically I’m in debt so I wouldn’t qualify for a loan according to you? See what you didn’t take into account, something that anyone with even a 5 second long education into finances would have done, is look at my current debt and rate of pay, and decide based on expenses and history of payment, how much and if I should be given a loan. This is how credit ratings work. It’s almost like a bunch of people who know what they are talking about made a system to determine these thing!

Well said. This is how credit works.

[Antiganon]

So, OP is horribly misinformed.

For FHA loans (the easy to get ones, where you only need like 3% down and good credit) require less than 50% debt-to-income ratio.

Meaning if you are making $5k per month, and your monthly bills INCLUDING YOUR POTENTIAL MORTGAGE are over $2500, you literally can't get a mortgage.

Requiring zero debt is ridiculous. Nobody who has made any investments into themselves (like higher education, buying a car, or taking out a mortgage on an income property) would be able to get a mortgage.

Requiring a massive down payment is also ridiculous. Nobody who hasn't invested into themselves would be in a position to have that kind of cash lying around, excepting people who inherit large amounts of wealth.

Let me put down 3% and get screwed with interest fees for the next 30 years if I want. So long as the value of my home doesn't drop, the bank will make money on the mortgage regardless, even if I default in 10 years.

I pay $1200 in rent on a monthly basis. I can afford a $1200 housing payment (so about $950 mortgage, plus property taxes, plus homeowner's insurance, plus PMI), given that I have credit cards with large limits and low minimum monthly payments that I can use for maintenance and emergencies.

That way, rather than my $1200 paying my landlord's mortgage, I am spending $1200 to build equity in my own home. Then in 6 years when I have built about 20% equity, I can refinance to a lower rate, drop the PMI, and pay less to live in the same house, pay the same and roll in some other debt to my mortgage, or pay the same and pay less in interest over the term of the loan.

Or, I can build some equity, then move out, sell the house, and rent somewhere cheaper, and have a nice little nest egg built up.

[Dug]

So are you for getting so upset over a gaming forum comments. It's immature. Any which do, place them on ignore and move on. Unless you are the type which likes to stroke your ego.

I'm upset because I'm calling out your point? Okay then. Your last point here doesn't even make sense. I don't put you on ignore because you're usually not trying to be a troll. Was I mistaken?

[Ghostpanther]

I'm upset because I'm calling out your point? Okay then. Your last point here doesn't even make sense. I don't put you on ignore because you're usually not trying to be a troll. Was I mistaken?

I try not to be. But it is ok. I am not upset. *hugs.

[LMuhlen]

You know so little about how finances and credit work that it gives me a headache. Your spectral tiger analogy doesn’t work, because it lacks one key point of finances: repossession. Missed too many payments on the tiger? I’ll be taking it back and selling it to the next person.

Take me for example. I have a small balance on my credit card that will be paid off in a week, I have a car loan that is very small because I got a cheap car. Technically I’m in debt so I wouldn’t qualify for a loan according to you? See what you didn’t take into account, something that anyone with even a 5 second long education into finances would have done, is look at my current debt and rate of pay, and decide based on expenses and history of payment, how much and if I should be given a loan. This is how credit ratings work. It’s almost like a bunch of people who know what they are talking about made a system to determine these thing!

In his system, if your current debts are so small, you would just pay them before applying to a mortgage. He did ask for a 30~45% starting fee, so if you could pay that, another small direct expense or two wouldn't hold you back. If his idea is to significantly reduce loans, it would surely work. Now, if reducing loans is a good idea, that's another story.

[cubby]

http://money.cnn.com/2018/03/08/news...ngs/index.html


Clearly, adjusting the market will advace it!

This is pretty disturbing. I saw a couple movies that laid out the events (the big short; margin call). Frightening that this is happening again. However, The Big Short, at the end, called out that CBO's were already starting to come back into the financial trading game. And this was in 2012-13.

[Voidwielder]

Oh guru, how long am I going to live? Does your crystal ball tell stuff like that? The problem with making predictions, a lot of posters will not be around when the prediction is suppose to take place. So no way to remind them. I mean you could be right, but you are not really going out on a limb.

I mean people such as Al Gore can be reminded of his predictions of the polar regions being totally free of of ice in 7 years, when he made the prediction in 2005. And many of the celebrities and famous people predicted Trump would never be elected President. We do not even know what the interest rates will be next week, let alone months or years from now.

There are several indicators and several analysts who have said this - Mauldin, Friedman, Khan. Others.

[Dug]

I try not to be. But it is ok. I am not upset. *hugs.

Talk about stroking your own ego


Peace