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The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in just the past week. As mortgages get more expensive, more would-be homeowners are priced out of the market — a threat to the fragile recovery in the housing market.
Just saw this article and came on here to see what you all would say about it
I have to wonder if I should kick myself, because we got a great rate on this house but we will outgrow it in 3-5 years and compared to this rate we will probably puke at how much it will cost us to "move up" at that point
Remember that the new rates are still low. 20 years ago the rates wee 18% or so...It's still a good time: rates are STILL low, home buyer credit until end of the month, still inventory to pick from...
Remember that the new rates are still low. 20 years ago the rates wee 18% or so...It's still a good time: rates are STILL low, home buyer credit until end of the month, still inventory to pick from...
20 yrs ago mid class could afford their mortgage, now barely anybody can.
20 yrs ago mid class could afford their mortgage, now barely anybody can.
Mid-class COULD afford it, but chose other things to spend their money on. I have a home and we can afford it but we could be much better if we cut out
eating out: $250 a month
Crazy Cable/phone/internet $150 a month
Entertainment $100 a month (movies, parks, etc.)
Coffee Runs $50 or so a month (WE have cut this out!)
Trips to Target just for fun $100 plus a month
Cell plan $100 a month
Just those items alone total $750. Our mortgage is about $2400 a month...If I took that money and applied it to the mortgage that would be $1650.
Last edited by ShannonMilligan; 04-07-2010 at 06:46 PM..
the article had an example of a certain monthly payment that at one interest rate would afford a loan of $300k, but one point higher interest they could only borrow $270 for the same monthly payment. So the choice would be that you'd have to choose a cheaper house or save up a higher down payment.
after recently closing on this house and now paying our bills for a few months and getting to see our current budget at work (or not work, lol), and thinking about the math, if our income isn't higher in a few years, but interest rates are, we will not be able to afford to "move up" much at all. Maybe we can get something bigger if/when we need it, but not nicer. Bummer. I probably should've just started with that after all. I'll go back and read that "buyers remorse" thread now
Mid-class COULD afford it, but chose other things to spend their money on. I have a home and we can afford it but we could be much better if we cut out
eating out: $250 a month
Crazy Cable/phone/internet $150 a month
Entertainment $100 a month (movies, parks, etc.)
Coffee Runs $50 or so a month (WE have cut this out!)
Trips to Target just for fun $100 plus a month
Cell plan $100 a month
Just those items alone total $750. Our mortgage is about $2400 a month...If I took that money and applied it to the mortgage that would be $1650.
Anyway...its about choices.
+1 for you.
Couldn't agree more!
I can add another one to your list....
I know of a family that pays for all these pricey extra curricular activities (sports, etc) for their kids, but is always late on their mortgage. I cannot even comprehend that
Hint: Discretionary income is what you have LEFT OVER after the bills are paid.
the article had an example of a certain monthly payment that at one interest rate would afford a loan of $300k, but one point higher interest they could only borrow $270 for the same monthly payment. So the choice would be that you'd have to choose a cheaper house or save up a higher down payment.
after recently closing on this house and now paying our bills for a few months and getting to see our current budget at work (or not work, lol), and thinking about the math, if our income isn't higher in a few years, but interest rates are, we will not be able to afford to "move up" much at all. Maybe we can get something bigger if/when we need it, but not nicer. Bummer. I probably should've just started with that after all. I'll go back and read that "buyers remorse" thread now
I deleted that last sentence...It was too general.
Enjoy your current home and I bet things will work out
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