How Do People Afford Mortages? (buy homes, upfront, lending, Tulsa)
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IMHO..move to a place where houses arent so expensive and property taxes are under 500 a year. Of course not everyone WANTS to live out of the city, but its alot cheaper.
I have always believe that buying a home is like buying a vehicle. Anyone that can't save up twenty pre cent down realy is taking a risk buying either. But then I have seen peole that bought so many cars so frequently tehy could ahve bought a home instead.
ummm...get a good solid paying job.
You do realize that most people do not have rich parents and that most people do own their own homes correct????
Incorrect. Most people RENT their homes, having on average less than 47% of the value of their homes on the equity side and the rest on debt...and that's an AVERAGE (not to be confused with median) across the board, so when you normalize by standard deviation you discover that the curve is skewed way left, meaning a lot more people don't even own 25% of their house, hardly any owns half, and even less own it outright. It's called de facto renting. Said 'most' people also stay on property for less than 9 years, further perpetuating the rental cycle. If people would realistically stay in said home for 30 years it would be owning a house, for the median 'home buyer' that's just not the case, they're just paying a premium every month for a white picket fence and the belief that their dwelling will go up up and up like big money lotto.
Consider the previous example. Said couple is paying close to 1600/mo for a 208K property in North carolina, whereas I'm renting for 700/mo without needing my fiance to chip in. That's more than double my housing cost, and it doesn't even consider maintenance hassle costs. In order for me to own a house with a 700/mo mortgage, just the mortgage, and assume the same 5% down plan as said couple I'd be living in skid row in town, and now locked in for a couple of years before I can get rid of the place breaking even after transaction costs. I'm sorry but that's the economic reality. Sub 150K gets you the ghetto here, and this is the southeast not San Fran mind you, and my job is here, not in rural county wherever, so moving to the sticks is not conducive to having that solid job you speak of.
As to the regional affordability question, there's a connection to those "solid" jobs you talk about. I can find sub-100K houses about everywhere in the midwest, but good luck finding work. And if you think commuting is the answer, I'm not going to argue with the majority of america driving themselves to death on the way to work, but I think anyone who took basic economics can recognize there's a opportunity cost to commuting, and most commuters just miscalculate that cost.
People DON'T like living paycheck to paycheck, and your parents don't have to be super rich to afford you a down payment, but they have to be well off. And I disagree with the estimation that most people who enter into first-home buying do not do so without a windfall, I argue most DO have parental subsidy; people just don't like admitting it when they're out with friends rubbing on everybody "WE just bought a house" and risking being called out.
Location: Mableton, GA USA (NW Atlanta suburb, 4 miles OTP)
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Quote:
Originally Posted by TH777
How in hell can anyone afford this unless RICH PARENTS Help them out???
There's no reason to buy a house (especially in this market) unless you're older and have the money put away, or younger with the financial resources to do it. Renting works just fine.
Things change over time, believe me. And yes, the bills seem to keep up with the income to a certain extent if you're not careful, and even the most diligent saver can get slammed by circumstances (long periods without full-time work, for example, or poor health which requires costly treatment), but I have a lot more spending money now at 45 years old and 20 years into my career than I did when I was just starting my career out of college.
Of course, a glance at my current bills would probably scare the crap out of my 25-year-old self.
Last edited by rcsteiner; 05-09-2008 at 04:06 PM..
And I disagree with the estimation that most people who enter into first-home buying do not do so without a windfall, I argue most DO have parental subsidy; people just don't like admitting it when they're out with friends rubbing on everybody "WE just bought a house" and risking being called out.
I needed a subsidy to buy my first home. It didn't come from my parents, but rather from my Uncle Sam in the form of a VA loan. I had to crawl thru a few hoops and jump over a few fences to qualify for a VA loan ( 0% down ) however and it all had to be paid back when I sold my first home. Admittedly, it made the purchase of my first home alot easier than it would have been with a traditional 20% down loan.
Incorrect. Most people RENT their homes, having on average less than 47% of the value of their homes on the equity side and the rest on debt...and that's an AVERAGE (not to be confused with median) across the board, so when you normalize by standard deviation you discover that the curve is skewed way left, meaning a lot more people don't even own 25% of their house, hardly any owns half, and even less own it outright. It's called de facto renting. Said 'most' people also stay on property for less than 9 years, further perpetuating the rental cycle. If people would realistically stay in said home for 30 years it would be owning a house, for the median 'home buyer' that's just not the case, they're just paying a premium every month for a white picket fence and the belief that their dwelling will go up up and up like big money lotto.
Consider the previous example. Said couple is paying close to 1600/mo for a 208K property in North carolina, whereas I'm renting for 700/mo without needing my fiance to chip in. That's more than double my housing cost, and it doesn't even consider maintenance hassle costs. In order for me to own a house with a 700/mo mortgage, just the mortgage, and assume the same 5% down plan as said couple I'd be living in skid row in town, and now locked in for a couple of years before I can get rid of the place breaking even after transaction costs. I'm sorry but that's the economic reality. Sub 150K gets you the ghetto here, and this is the southeast not San Fran mind you, and my job is here, not in rural county wherever, so moving to the sticks is not conducive to having that solid job you speak of.
As to the regional affordability question, there's a connection to those "solid" jobs you talk about. I can find sub-100K houses about everywhere in the midwest, but good luck finding work. And if you think commuting is the answer, I'm not going to argue with the majority of america driving themselves to death on the way to work, but I think anyone who took basic economics can recognize there's a opportunity cost to commuting, and most commuters just miscalculate that cost.
People DON'T like living paycheck to paycheck, and your parents don't have to be super rich to afford you a down payment, but they have to be well off. And I disagree with the estimation that most people who enter into first-home buying do not do so without a windfall, I argue most DO have parental subsidy; people just don't like admitting it when they're out with friends rubbing on everybody "WE just bought a house" and risking being called out.
What don't you get? Because you don't make squat for money, you think everybody else is in the same boat. You dont want a $150K house but you make $80K combined. Guess what? No house for you.
Everybody looks at all of those housing expenses quoted and thinks there is no way anybody can afford it just because they can't afford it. Reality check...There are people/couples who chose a decent profession (not a job) and make more than $30-$40k each while not racking up huge debt. I made over $40K right out of college as did my wife. And that was a while back.
If your income is topping out at $30-$40k, then things will always be tough in these economic conditions and home ownership might not be in your future.
This thread and your comments clearly show the difference between people who go to a "job" every day and adults that have a career.
Just because your financial equation doesn't equal home ownership, don't think it applies to everybody else.
People DON'T like living paycheck to paycheck, and your parents don't have to be super rich to afford you a down payment, but they have to be well off. And I disagree with the estimation that most people who enter into first-home buying do not do so without a windfall, I argue most DO have parental subsidy; people just don't like admitting it when they're out with friends rubbing on everybody "WE just bought a house" and risking being called out.
I am in my late 20's so I recently bought a house, and 6 of my friends did in the past 3-4 years. NONE of us had parental assistance. We just bought what we could afford. Most people do NOT have parental assistance. They just don't buy mcmansions and fancy apartments.
Bought my first house with my fiance now husband in 1998 without help from either of our parents. Modest 1,200 square foot house. I know plenty of people that purchased there first home without "parental subsidy".
Why buy a house when you're already in debt? Why buy an expensive car when you're already in debt? Why save for retirement when you should be paying off your debts first? Who spends $320 a month on transportation alone, or $200 on food??? Surely it can seem impossible to afford a mortgage, when making a dozen other financial errors.
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