Actually i guess the bigger issue is that we’re gonna be unemployed in 15 years due to a declining demand of human labor and then who pays back what?
Today you could afford the pay-back rate, but not in the future, and the banks are well aware of that.
Joke’s on them, I have a 15-year mortgage on my condo. (Lower interest rate than a 30-year mortgage, USA, ymmv)
There is no declining demand of human labour, and there is no indication that it will ever happen. The way the labour is performed is changing, just like it always does
Right? You don’t need to exist long term. Fuck off and die, meat.
Edit: by which i of course mean ‘i dont need you to exist’. Which is the same thing, right?
I’ve never paid a mortgage, but £500 seems pretty low. Do mortgage payments tend to be that much cheaper than rent prices?
Definitely not as low as £500… but mortgages are generally cheaper, sometimes much cheaper than rent. Example: we own a 5-bedroom house with a mortgage of $1,900, my step-son just moved into a 2-bedroom apartment for $2,200 rent.
I was paying $3,300/mo rent back in 2020. Got a mortgage at the low rates of 2021 and got a $2,800 monthly rate. So it seems like it’s cheaper. But once I add the property tax (~$1,000/mo), HOA ($500), home insurance (~$300), it’s not at all cheaper to own than to rent. Plus paying for maintenance on our own (had to replace both the fridge and the washing machine in the time since we moved) adds up too. Not saying it was better to rent, but it was definitely cheaper.
Our home insurance and property tax are escrowed and included in the $1,900. And no HOA. But the maintenance is real, something is always breaking. Had to buy washer and dryer, replace the stove and the dishwasher. I would still much rather own than rent though.
£100,000 over 30 years at 4.5% would be £506 a month. That plus the stipulated £25,000 deposit will get you a bungalow or terraced house near me as of about 18 months ago. Rent in my area starts at around £700 for a house outside of town or a single room in town.
So yes, £500 mortgage is possible. Rent being twice the cost of a mortgage for a similar property is fairly common. Banks and landlords being shitheads is guaranteed.
I think most of the people disagreeing with the post are from the USA, which has completely different costs/taxes/prices etc.
In the UK (as the original post is), it depends where you live - our mortgage is about £350 per month (5 bed terrace), but if would have been almost £500 a month without the deposit. Rent in the area is about £600 - £1500 per month, for similar or smaller properties.
Note that this is in Northern UK, in the sort of town sometimes described as “a bit of a shithole”. I could get a train to a town an hour away and the prices would literally double - but the ratio between mortgage and rent would be pretty much the same.
Even with the cost of repairs, and a tiny bit on insurance etc, it’s a significant saving. Also, the repairs actually get done, which was not the experience I had in rented accommodation.
Anecdotally I pay over 200% the cost of my father’s mortgage to rent a home in a lower cost of living area.
And on top of that, they made any alternative illegal! You want to live in your van? Illegal, you want to build a tiny house? Illegal. It’s insane
500 Vs 1000? What year is it?
You can’t even get an apartment here without making a ton of money. Cheapest studio apartment here is $1,500 a month. I have to prove i make $4,500 a month just to barely qualify, which i don’t. Then they charge you so much for application fees, and then utilities they overcharge for, it’s all a scam.
My issue wasn’t getting pre-approved, it was being able to actually afford the mortgage amount I was pre-approved for. A lot of these companies don’t give a damn if you can actually afford the mortgages they offer, because they know you’ll either figure it out or go homeless trying.
We probably live in different countries, but where I live it’s more like you can’t get pre-approved for anything unless you either have a large amount of money saved up, or your salary is high enough that it’s far beyond what you would reasonably need to get paid to afford the mortgage.
You live in Germany don’t you
Or any country with responsible lending rules.
Lenders are not your friends. They’d take your organs as payment if they were allowed. The rules are there to stop them doing bad lending and then hounding you to your death.
yes, as any good for profit company should
Oof bruh, I am starting to doubt my earlier offer…
Is it a thing to find German mortgaging standards whacky?! I finally feel heard! Basically everyone here seems to pick up 35+ year mortgages with seemingly low monthly expenses, but the overall amount of interest they accumulate over that time is absolutely insane! And still, everyone says that you shouldn’t pay more than 30% of your monthly income into your mortgage. It’s hard to even find a bank that allows you to pay for a decent Sondertilgung each year. And don’t even get me started on that whole Bausparvertrag system, because I have no idea what is going on with it or why anyone would ever do that
Fudging the numbers a bit, but let’s say I’m paying $3000/mo for a mortgage. Brokers tell me I can afford $10,000/mo.
I cannot afford $10,000/mo.
Yeah that was my experience as well. Mortgage companies were happy to pre approve me up to like 75% of my monthly income. Not even close to enough to buy even cheap food.
I am coming to realize that my rural perspective is pretty different, and that lots of people live in way higher cost of living areas than I do. My biggest suggestion is if you don’t like expensive housing, get out of the city.
The problem is some jobs are only inside the city
Very dependent on the field. A lot of jobs are concentrated in a handful of major cities, mostly very HCOL but with high salary. That’s why remote work becoming bigger partially caused the housing surge nationwide.
We know.
There are a number of people that have a home in the country with their family, and they travel to the city to work. Sometimes they are homeless during the work, or rent a small room.
No, it is not the ideal solution, but it is a solution. Fixing the housing situation is beyond most people’s power, and it will take a long time for those trying to fix it to actually fix it.
If city folk starts coming to rural area, they will start complaining that city people are jacking up property prices.
This really isn’t as easy as it sounds. Moving means you lose your support system of friends and family etc. Some people have children and need the grandparents to help watch them during the day as just one example. Job opportunities are likely not the same. While their current city job may not pay a lot the opportunities from that job could lead a lot higher but of course life choices can be a gamble. On top of all of that, moving long distance is difficult and expensive.
I have a highly intelligent friend from a small southern town and he moved out of there because he recognized there weren’t any opportunities for someone with talent but no capital. Sure he could have stayed and bought a cheaper house but he’d still struggle to make the payment on his small salary.You realize the headquarters of Walmart are in Arkansas? There are plenty of very high paying jobs in significantly more affordable places. Also if you pay 1/4 less for a house, and add daily childcare it’s still gonna be cheaper. People literally do it all the time, the whole concept of the suburbs was created so that people could afford houses.
I moved to the small town. I’m a college drop out, there’s always labor in the country, and I guess I just don’t want as much from life as other people. I’ll be happy working maintenance the rest of my life of it keeps providing.
I tried and here are some places I have looked where the average home is $810,000 come to find out.
Pinedale, Wyoming, USA Ennis, Montana, USA
These are in the mountains about 1 hour from the nearest big city of Jackson, Wyoming and Bozeman, Montana. I guess I need to look in the deep sticks.
Are you really confused why those properties are expensive? Those are both desirable locations in regions with quickly growing populations. How about Livingston, or Butte?
I am as there isn’t anything here. Cows and mountains. I am staying here passing three and it’s just nothing. Normally you would get water front and community features to set the price but none of that is here. I guess the confusing part is what is attracting people here. It can’t just be the mountains.
This is an unpopular take, but that is reality. It really is affordable out here! If you want more income, learn to repair reliable japanese beaters and commute a little. It’s less busy than the city, and it may bore some, but it keeps the bills paid, the kids fed, and the 401k growing.
To be the devil’s advocate here. Rental payments vs mortgage payments is not an accurate comparison of the true financial burdens.
With many rentals some if not all utilities are included in the price of rent, whereas homeowners must pay the full cost of utilities. There is also the additional cost of home insurance and property taxes. Most rentals have the majority of their maintaince covered whereas the homeowner is responsible for lawn cutting, gutter cleanings etc. The cost of repairs and maintaince is not negligible. While renting if the heat quits or an appliance breaks, the landlord is supposed to cover the cost but owning means you must take that full cost.
In the posted example, having double the mortage payment in rent payment is probably adequate to cover the additonal costs but the comparison of renting vs owning is not black and white. Several financial managers have even studied that depending on your needs and income, you can actually be getting ahead financially by renting if you don’t actually need the full benefits of owning and are able to maintain a store of wealth through other investments. This is especially true if you are in a rent controlled unit.
It seems like you are assuming an apartment rental and not a home rental. In my experience home rentals work very differently. Utilities are not included and you do end up paying quite a bit to maintain the home.
I went from an apartment that cost ~$1250/mo. To a mortgage that costs ~$4300/mo. Just got the “privilege” of owning a home (and paying for all repairs myself).
I can only afford this because of the people I’m sharing that cost with. We’re all on the deed, and we all have a stake, and claim to, the house. Four of us.
My payment didn’t really change.
The only way we could get to the point of a down payment is that one of the four of us has been saving for something like this since they were in highschool. Because of their effort, we had enough for a down payment.
And I’m lucky to be in this position.
What a fucking crock of shit.
Despite all of this, I’m hoping the market takes a dive so the rest of you can do the same at a much more affordable rate. I’ve already spent the money and I’ll be spending years paying it off. I didn’t buy a house up objectively save money, I bought a house for stability. I never want to move ever again. There are good reasons for that which I won’t get into. I promise that I will have ZERO issues if you all get a better deal than I did. I hope you do, and I hope the housing market, specifically the rental/flipping/“income property” markets crash, hard.
In the same way, I’ve paid off my school debt, I’m in favor of school debt forgiveness. I also enjoy pretty good health, I’m in favor of universal healthcare. I’ve never caused, not been the victim of a fire, I’m in favor of fire departments.
I could go on.
Good luck everyone.
In the same way, I’ve paid off my school debt, I’m in favor of school debt forgiveness. I also enjoy pretty good health, I’m in favor of universal healthcare. I’ve never caused, not been the victim of a fire, I’m in favor of fire departments.
That’s commie talk son. We pull the ladder up behind us in America.
I’m glad I don’t live in America then.
aren’t you lucky
Damn $4300 a month. I thought my $2600 was steep.
Right before we moved my rent had gone up to $2500 so it was a push. Now when we first started living there the rent was $1400 and the landlord had even refied so his mortgage was cheaper at the end. When we were moving out and he drove up in a brand new Rivian that I’m pretty sure I basically paid for…
Yeah, I went from $1200 rent to a $1300 mortgage but the city added $50k more value to the assesment so between taxes and insurance it’s going up to $1700/mo next year so that’s fun. I don’t know how many more years of that I could afford cuz $2600 just isn’t doable for me :/
To be fair, it’s a pretty large home. I’m living with my SO, my brother and his wife and there’s a couple of offspring that needed space too. Our house has ~5 ish bedrooms. Considering the number of people who live here, it can feel small. If it was just me and my SO, this would be humungous.
But that also means that we have four fully grown adults helping with the mortgage. So my share of the mortgage is around $1100 ish, per month, and we split most of the household bills, so I usually throw in about $400 more to help with that. I personally pay about $1500/mo.
My SO does the same, and we’ve encouraged my brother and his wife to also do the same. If everyone pays $1500 towards the house every month, we have more than enough to cover all the bills (electric/gas/water), as well as shared things like the Internet. Also that’s enough to cover the house insurance.
Yeah that actually sounds a little better than me. I’m the main bread winner and I’m responsible for almost all of it. It can be a little stressful at times
Going to be wild when people just give up on society and just start eating the ruling and ownership class. I tried warning these assholes if they didn’t give something. Then they would doom their existence. And now you have more people radicalizing everyday because they are being put on the streets.
The first time I applied for a loan, I didn’t have a credit card yet. And they were like:
How can we know you’re responsible with money?
Because I haven’t needed credit in the past and I’m still alive, idk? Having enough liquidity to not need credit would seem to suggest I’m good with money.
But maybe your parents are paying for everything
Ok? How does using a credit card change that?
Considering how much data they can get on anyone, this process seems pointless and outdated, except to give them somewhat arbitrary power over who can get a loan.
Not that I like such private data to be available at any institutions fingertips, but so it is these days.They are NOT looking to see if you are responsible with money. They are looking to see if they can make money off of you, so they want you to be a heavy credit user. Before I bought my house I made sure to take out two credit cards and just buy random shit on them for a few months because that boosts my credit score drastically which then made it easy to get the loan. Banks HATE people with limited debt because it means you are not a loyal customer that they could make money off of. Yes, it makes no sense but that’s just how the economy works. Even if you don’t have any reason to buy things on credit, you still should. Even if you are very financially responsible, you should always have “stupid debt,” by that I mean debt for the sake of debt, because banks love that shit and it’ll help you out if you ever actually do need a loan for something.
That’s the impression I get too
But it’s plausibly deniable enough because you can still get decent credit score if you pay off your credit before you pay interest. It’s a numbers game for them, I expect, but still.
Because people that quickly pay off their principal and avoid accruing interest don’t make the Credit Card companies as much money. They prefer people that are bad with money, sort of like how police departments don’t accept applicants that do too well on the tests.
Not buy a house, inherit a house from our boomer parents.
They’ll sell it to pay for the elderly homes.
You’ll only inherit the clay ashtray that you made for them in 3rd grade.
Boomer parents: emotionally abuses you for your entire childhood/teenhood
Me: Has severe depression
Boomer parents: “WHY ARE YOU SO LAZY AND UNGRATEFUL, USELESS EATER, BURDEN ON SOCIETY” then proceeds to threaten to leave me out of the will.
Funny thing is, she also threatens to leave my older brother out of the will. Basically she tries to make us hate each other, and we do hate each other. My entire family is dysfunctional. They are all conservatives, racists, LGBT+ phobic, has the toxic masculinity mentality, ableist af. They think anyone with a slight disability deserves to get executed because its “a waste of resources”. This is why I dislike my ancestral homeland, it reminds me of hatred and intolerance.
Edit: Technically they aren’t boomers, but I’ll still call them boomers because they share that same boomer mindset.
Who didnt reverse mortgage it to pay for extravagant vacations. Taking the last spots to see shit like the coral reefs they murdered.
Three kids, one house, we hunger gaming this shit?
'Cos two of us are married, there’s kids and that house only has three bedrooms and no land for extensions
(I kid of course, my sister is inheriting my house when I inevitably explode)
I saved up a big (to me) chunk a few years ago, thought I was there. Expected the red carpet to roll out. Nooooope. There were people buying houses for $100k more than the asking price, sight unseen, within a week or two of the house being listed. My little $40k deposit was adorable, in comparison. I had no chance. Then Covid, life, etc…
The 100k+ over asking was the big deal because that never made it into the housing data properly so prices looked like they were lower than they were and we don’t have accurate comparison data now
Was it in a desirable location? Our tourist town went out of control with our of state buyers during the pandemic, but property values have adjusted back some and the market competition is gone. If you still have some of that $40k now might be a better time. My wife and I just did the federal First Time Homebuyers class and wound up getting a USDA rural development loan, they wouldn’t even let us put a down payment to lower our payments.
I am a skidmark that cannot believe that I live in a house that I “own”(have a mortgage). And I am so much less pessimistic about anybody’s potential to do what I did. I am happy to answer some questions. I make $22 an hour and my wife makes $17, the loan officer told me I almost make too much for the program.
Yes, at the time, I was hoping to buy in the Salt Lake Valley and it just wasn’t feasible. Thank you for the tip, I will read up on the USDA loans.
The problem here is inability to read between the lines. The [bank?]'s message is pretty clear: “Stop polluting my sight, you filthy poor.”
I hate to break it to you, but mortgage payments are not cheaper then rent anymore. Obviously depends on your mortgage and money down and all that, but if you expect to pay half as much for mortgage payments as you did for rent, you’re going to have a very bad time.
This isn’t true in my experience at all. Either rent is cheap where you are or you’re looking at expensive houses or not for a 30 year period. The rate currently is around 6-9%. It would only be more expensive if the house is. No other hidden fees
Well in my very recent experience it is extremely, painfully, unavoidably true. That’s why I said it. We just bought a house, 150k less than we qualified for, and our monthly payment is 33% higher than we were paying in rent. Rent is far from cheap, there’s just no such thing as an inexpensive house unless you want one in a terrible neighborhood or an hour drive outside the city. In the first case, not only is it a bad idea just to live in these neighborhoods, the chances of making money on the resale are next to nil. The burbs option of course offers more for your money, but that comes with more maintenance, yardwork, housework, gas money, transit stress, etc. We worked with very knowledgeable, trustworthy realtor and mortgage brokers and there’s simply no math in the current market that gets mortgage payments lower than the rent we were paying without buying a literal, active crack house.
And to claim there’s no extra fees involved with buying and owning a home compared to renting is either utter delusion or repugnant gaslighting.
Parents and brother went in on a house together so he could live near work. Rents out the main floor for $3750 a month (3 bedroom) and that covers the mortgage so he can afford to pay the utilities and lives in the basement.
Surely, this depends a lot on what market you’re in. If you’re in a very expensive area and need to take a big loan with a high fixed rate, I can see that being the case but renting the equivalent place would probably be extremely expensive too.
renting the equivalent place would probably be extremely expensive too.
Right, like I said, mortgage is not cheaper, certainly not half as cheap. The market I’m in is a metropolis, it contains every range of the market, it just depends how much gun violence you prefer.
