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"My monthly debt?" I was posting an example, not my personal situation.
Yes, I'm aware (or assumed, at least). When I said "your" I meant the debt amount you decided to use for your thought exercise. My point stands. I think you are well below "average" monthly debt and it has been shown you are well above "average" income for your state.
Debt is what is factored into your loan qualification, not monthly expenses from the calculator I used. And you had employer health insurance for $700 a month!?! Sounds abnormal.
I never said I had employer health insurance. I didn’t, I had to purchase it on my own because I was considered per diem even when I worked 40 hours a week. That actually would not be that unusual however. My niece pays 900 a month for her and two kids as a teacher.
Nice post, until you decided to bash Trump for absolutely no reason.
By the way, if you have 10 billion in assets, and 5 billion in liabilities (like our president) you aren't in a "messy load of debt", but are actually a billionaire... something a financially cautious person will never achieve.
Financially cautious person will not bankrupt half the people who do business with him either. Most of us pay our debts.
Our house cost about 1/3 of what we could now qualify for. Granted, we could not have qualified for a jumbo mortgage when we bought our home six years ago, but we still under-bought according to our income then. Our goal is/was to buy a home that our family would be comfortable in, that wouldn't be too big to maintain when we were empty-nesters (because the kids were already teens/almost teens at that point), and that we'd be able to pay off easily even on one income. Just because a bank says you can afford a particular amount doesn't mean that you actually can.
SO you agree that most households can afford a 300k loan?
A 300K loan wouldn't get you an apartment in many areas. Maybe a one bedroom apartment in the Bronx and definitely not any place in Manhattan or most of Brooklyn or Queens. It also leaves you out of most of areas within an hour of NYC - northern New Jersey or lower NY state. Austin, Texas or Washington DC you would be hard pressed to find anything too.
If you stay in Indiana, one out of fifty states, then okay. You would also probably find something in Buffalo NY or the older areas of Albany, NY. Probably in depressed areas like the rust belt would be around $300K.
Banks are heartless institutions. Regardless of a person financial standing, most banks will loan large mortgages. This makes financial sense for banks, but not the home owners. At the beginning of a mortgage, most of the monthly payment goes towards the interest (because you pay the interest off before, you pay off the house). This is all profit for the banks.
After the banks takes the bulk of the interest, they sell the loans to a third party. The third party makes less money over the course of the loan (because at this point, you are paying down the house) However, the third party don't pay for bank's building or staff or advertising or lawyers at a closing or etc.
Banks know what they are doing, it is up to the consumer to decide what is right for him/her.
Last edited by YorktownGal; 01-21-2020 at 09:20 AM..
Status:
"48 years in MD, 18 in NC"
(set 14 days ago)
Location: Greenville, NC
2,309 posts, read 6,103,880 times
Reputation: 1430
Quote:
Originally Posted by Berteau
SO you agree that most households can afford a 300k loan?
I didn't even come close to saying that I agree. You (or someone) asked why people aren't buying at the maximum amount that they can afford. Again, only a fool does that. I watched as a lot of my friends got lulled into believing that the price of housing would go up forever. I saw them buy houses with zero down and no interest. I saw them take out second mortgages to take vacations and buy junk. All the while I sat on my fixed rate mortgage. I saw what was happening and it didn't make sense. Like Judge Judy says: If it doesn't make sense then it's not true. Everybody was all fat and happy until the whole house of cards came crashing down. Then I watched my friends, one by one, loose everything that they had. Bridge loans? Why would a homeowner get a bridge loan to buy a house? They were hoping that they could flip it before the note came due. Opsies. Housing crash. It got very ugly.
Never buy or borrow more than you can afford to pay if things get rough. You must have a contingency plan made up for financial emergencies. And that plan had better involve more than just putting money in the bank. You have to try to see emergencies coming and get out ahead of them before they strike. Always be watchful.
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