How can you afford the condos in Chicago (Cicero, Winnetka: low income, insurance)

[BRU67]

Originally Posted by Lookout Kid

I don't think this was very common on the North Side of Chicago, however. I don't know anyone living in a $300K condo who makes so little money. Heck, two CPS teachers who are married are well into the six figures, so $300K isn't THAT unattainable.

Not in those markets but on the south and west side and inner-ring suburbs, heck yes. It was common during the boom years to see the "Beverly Hillbillies" rolling up to a $350k house and unloading their stuff in trash bags. You knew there was no way they realistically afford what they were buying, and they couldn't, so there are a lot of foreclosures in areas where this was more commonplace.

[j33]

Those of us in the 40k market (I'm one of those people) are much better off renting a cheaper apartment than paying 60-70% of our monthly income on a stupid condo we can't afford, that way we can actually save some money and not find ourselves on the brink of doom if we miss a few paychecks due to losing a job.

The obsession with owning property has cause much financial ruin with some of my lower income friends. I stayed away from the whole rush to buy a condo on my income even though I was encouraged to, because I knew I couldn't afford it. Since then, I've know more than a few people who have lost their condos, and a couple who had to refinance at a much higher rate, and are now stuck with a very expensive one-bedroom condo, and a child who sleeps in the front room.

[Drover]

Originally Posted by Sally in Chicago

I'm just curious. I've been here 20 years and never made more than 40,000....that's another story....but I just wonder, who's buying the condos on the north side? What kind of money are people making to afford $300K-$400K?

If you've lived here for 20 years, then you've been here long enough to remember when you could barely give away property in most parts of this city. A lot of people with modest incomes living in pricey homes or condos have been property owners since before the run-up in real estate values. Either they bought their house back when you could pick one up in what is now a decent neighborhood for under a hundred grand, or they took the equity from the real-estate run-up and used it to upgrade to a bigger place. Plus some live in family hand-me-downs.

[BRU67]

Originally Posted by j33

Those of us in the 40k market (I'm one of those people) are much better off renting a cheaper apartment than paying 60-70% of our monthly income on a stupid condo we can't afford, that way we can actually save some money and not find ourselves on the brink of doom if we miss a few paychecks due to losing a job.

The obsession with owning property has cause much financial ruin with some of my lower income friends. I stayed away from the whole rush to buy a condo on my income even though I was encouraged to, because I knew I couldn't afford it. Since then, I've know more than a few people who have lost their condos, and a couple who had to refinance at a much higher rate, and are now stuck with a very expensive one-bedroom condo, and a child who sleeps in the front room.

Obviously, much of the blame is going to the financial institutions, mortgage brokers, and realtors. But what about the people who signed on the dotted line? I mean, my wife and I would have have loved to have tacked a "0" on to the end of our household income and bought a mansion in Lake Forest. But we didn't, and bought a house that cost considerably less than what we could afford -- for a higher potential upside down the road and, God forbid, should one of us ever lose our job, get sick, whatever. Guess some just didn't have that kind of foresight.

[ajolotl]

Whose fault it is and the inevitably of it happening are two different things. The system that depends on the kind of foresight you describe will fail. Unfortunately, there need to be regulations to substitute for what appears to some of us to be basic common sense.

Originally Posted by BRU67

Obviously, much of the blame is going to the financial institutions, mortgage brokers, and realtors. But what about the people who signed on the dotted line? I mean, my wife and I would have have loved to have tacked a "0" on to the end of our household income and bought a mansion in Lake Forest. But we didn't, and bought a house that cost considerably less than what we could afford -- for a higher potential upside down the road and, God forbid, should one of us ever lose our job, get sick, whatever. Guess some just didn't have that kind of foresight.

[Lookout Kid]

Originally Posted by BRU67

Obviously, much of the blame is going to the financial institutions, mortgage brokers, and realtors. But what about the people who signed on the dotted line? I mean, my wife and I would have have loved to have tacked a "0" on to the end of our household income and bought a mansion in Lake Forest. But we didn't, and bought a house that cost considerably less than what we could afford -- for a higher potential upside down the road and, God forbid, should one of us ever lose our job, get sick, whatever. Guess some just didn't have that kind of foresight.

Yep. The responsible ones are getting screwed in this crisis. I'm now jobless, but we are still paying our bills quite comfortably because we didn't stretch too much to buy our place. I think the penalties for foreclosure need to be worse than two-years of wrecked credit and five years of no new mortgages. But we'll see if I still think that way after my wife loses her job!

[BRU67]

Originally Posted by ajolotl

Whose fault it is and the inevitably of it happening are two different things. The system that depends on the kind of foresight you describe will fail. Unfortunately, there need to be regulations to substitute for what appears to some of us to be basic common sense.

Yea, I know. We should have bought the mansion instead of trying to be fiscally and environmentally responsible and live below our means (before you call me unpatriotic here, I did serve in the military -- does that make up for my attitude?). Then we could have gotten bailout money and all these other goodies that may well have allowed us to carry through.

[Humboldt1]

Back in 2003, I only made $42,500. I qualified for up to $350,000 loan. I ended up getting a loan for $172,000, with 20% down on $215,000 purchase.

Good thing I didn't get the larger loan amount. It is ridiculous that I even qualified for that much. Granted this is as a single guy with no car or school debt and no dependents, but still, way too much money for how much I made.

Those making $40K in the city should remain renters unless they find the right foreclosure or shortsale that will enable them to join the ranks of homeowners. In the suburbs, home ownership is much more attainable, though many should have remained renters who bought in 2004-2007.

[Gelasia]

Originally Posted by sukwoo

I don't know, if I lived in the city (even without a kid), I'd want at least a two bedroom. That way we could have a guest room/office. Plus when I **** off my wife, I could have somewhere to sleep!

lol
Yeah well the reason I dont want a 1 bedroom is because we plan on starting a family in 3-5 years so we will need the extra room and of course I would like a place for my guests to sleep.

BTW whenever my husband is kicked out of bed he hits the couch and usually wakes up soaking wet from sticking to the leather all night lol
Not sure why he doesn't use the guest room.

Anyways I am hoping we get approved for at least 250k
We have excellant credit but together we only make 80k

Are trust funds considered as income when applying for a loan?

[PokerPlayer1]

Originally Posted by Humboldt1

Back in 2003, I only made $42,500. I qualified for up to $350,000 loan. I ended up getting a loan for $172,000, with 20% down on $215,000 purchase.

Good thing I didn't get the larger loan amount. It is ridiculous that I even qualified for that much. Granted this is as a single guy with no car or school debt and no dependents, but still, way too much money for how much I made.

Man, it sure was amazing back then, wasn't it?

In 2006, I qualified for about that much with my only income being that of a full time poker player. Talk about the least verifiable income of all professions That's when I knew something was really rotten in Denmark, with the whole mortgage system.

Not only should I have had to provide a HELLUVA lot more documentation than I did (I went in there with mounds of bank statements to prove liquidity and consistent deposits, they didn't ask to see any of it) but they offered me a loan that was way more than I could afford- not even factoring in the unfortunate truism that poker income isn't exactly 'stable' and some months, you actually lose money.

It was just awful and a recipe for disaster. I remember going home and telling my then girlfriend "Good god, they're down there giving away free money and the only reason I didn't take it is because I realize I eventually have to pay it back. There are a lot of people taking it who don't stand a chance of paying it back..."

Wish I put 2 and 2 together and had the foresight to short the everloving **** out of every bank and mortgage stock in the country.