no way! me too
Easier to replace a renter who stops paying than foreclose a home occupant that stops paying.
Mortgage is more expensive because you are paying the premium for flexibility of becoming homeless with less hustle.
Well yeah, that $1400 rent is paying your landlords mortgage, which the bank also owns. So you see, they would make less money if you get out of there.
I will play devil’s advocate and note that when you own a home you are responsible for all the costs of the house, not just the mortgage. I’ll see myself out.
And I’ll just note that any landlord is going to charge enough in rent to cover all the costs of the house, not just the mortgage, as well as profit for themselves. Otherwise they’re not going to be a landlord for long.
Good point, but I think we all know that’s not the reason.
Devil’s advocate…it’s not the $950 monthly mortgage, it may also be the $15,000 down payment?
There’s the $3000 roof, $5000 for the leaks in the basement. If you don’t fix the roof or the basement, the house is worth less to them if you default.
The bank really does not give a fuck, it’s just a risk to them.
Also the loan they’re making you on $950 is tiny. They want a hell of alot more money.
your credit rating also has to be higher for a mortgage. OP may have massive debts already so they can’t really sustain more.
Ain’t that the truth. In the past 2 months my garage door spring, water heater, and dryer unit all decided to take a shit. Drained my savings pretty quick.
Same. It’s a good thing I pay hundreds less per month on a mortgage instead of the going rent rate, which enables me to have savings in the first place. Not being forced to move every year and incur the equivalent costs of an appliance or two also helps.
For me the biggest reason to buy is simply quality of life. On paper, sure, renting comes with ease of mind. You don’t have to do maintenance and the landlord takes care of everything. However, the responsible landlord is the personal finance analog of the physicist’s spherical cow. Landlords are in the business to make a buck. They never do any maintenance unless absolutely forced to do so by either the law or market conditions. If the city isn’t going to condemn the property, and as long as they can keep it rented, they don’t give a damn. However, when something at the landlord’s house needs fixing, it’s undoubtedly fixed quickly and properly.
I like owning a house because it ensures that I can actually have a pleasant place to live. Landlords have no incentive so keep their properties actually livable rather than just inhabitatable.
Dryer is often tenant owned anyway. Spring is cheap if you’re brave. Water heater you can get for the difference in this posts’s rent and mortgage.
Doesn’t muddy the waters a bit.
Spring is cheap if you’re brave.
What a beautiful epitaph
I don’t recommend everyone do it but it’s not rocket science. Follow proceedure and respect the danger. Most of you operate multi tonne motor vehicles, you can do it.
Isn’t it the second most common method of losing fingers, right after table saws?
Sure, but I don’t stand on a ladder, stick a screwdriver into the flywheel, and then tell my friend to fire it up.
I understand that is exaggerated and oversimplified, but having an old garage door spring miss my face by inches because it failed as I walked below it was a terrifying experience. In a car, the car is a crumple zone. In a garage door spring, your skull is the crumple zone (assuming that you’re interacting with it in such a way. I also tend to not put my face in front of cars that are prepared to accelerate.)
Oh yes. Big springs are dangerous, respect them or get sprung.
My poor poor anaconda…
When I was younger we had one of the older-style “2 big springs” doors and needed to replace the springs. The new ones were a bit shorter, so we had to close the doors a little harder. No problem.
About 20 minutes later there was a sound like an explosion in the garage. One of the new springs broke where the hook went into the door from the strain of being stretched so tight, and it shot across the room and was sticking out of the man-door on the other side of the garage.
Don’t fuck with garage springs.
I had my grandparents’ house inspected before buying it, and the inspector said that a couple of the springs (same type) were not installed correctly; that the extra cable coming from the door to the track was supposed to be routed through the spring to hold it in place in case there was a failure. The garage doors were already concerning me, so I hired a garage door company to take a look, and update the springs.
The technician told me that an inspector pointing that out is really strange, because that’s an incredibly niche detail for an inspector to know. The tech looks at the spring, checks out the garage door, etc. All the while, I’m standing under the track. The tech was about to open the garage door, and said, “hey, take a few steps back. No reason to risk standing under that, in case it fails.” I took three steps back, and then there was a loud bang, and the spring suddenly whipped across in front of me, bounced back once, and then lazily swung back and forth in front of me.
I still sometimes panic walking under my garage door tracks.
I know exactly how to replace a garage spring, I simply refuse to do it.
We spent $45k on repairs in two years. Wiped us out. But my only debt is still my one mortgage. The house is only worth about $250k. But I’m good on my roof, foundation, water heater and HVAC for quite a few more years.
the devil is in the details nobody talks about.
owning a home can bankrupt you, given all the legal, tax, and liabilities issues involved.
renting doesn’t come with those issues, generally.
Rent pays for all those things generally. Landlords just have the benefit of having money in the bank (typically due to assistance from their parents). The entire purpose of renting use to make a profit, if rent doesn’t cover maintenance and taxes then rent will increase until it surpasses maintenance and taxes.
hmm i know a lot of renters whose parents pay their rent. weird.
lots of people also rent below profit or cost. my sister rented to my mother below cost for 5 years.
Ah, so if all renters can have family members be their landlords then the problem is solved!
the problem is people need to live with roommates and family until they can afford their own place.’
everyone i know who whines about rent lives alone, i don’t hear people whining about rent so much when they split a place with another person.
the rent cost between a 2bed and a 1bed in my city is like $300. as in a 1bed costs 3000 and a 2 bed is 3300. so if you get a roommate your rental costs go from 3000 to 1650.
I’ll add to this a bit. I know so many people who want to buy a fixer upper to save money. We went that route, and while my mortgage is sort of low, the repair costs are insane. I did all the work myself, and we spent over $100k in 5 years. Houses are expensive to own if you care about them.
Fixer uppers are better the less you give a shit. For example mine i will be sealing the basement and redoing the bathroom. Aside from that i don’t give a fuck about the dated walls and floors. I don’t care about the kitchen cabinets or the stains on the counter top.
Give less shit, and give more time. Fix the absolutely major things now, and do something smaller every year. Unless you’re planning to flip the thing, you have time.
Mine was the look under the siding and find shitloads of water damage. Don’t tell the county how many studs I replaced.
Add that to the horrible repairs done prior and I’ve been working constantly to get it to “not giving a shit” levels of OK. Sucks a bit, but I love our home now. Landscaping isn’t done yet though.
And theres the liability. What happens if you don’t pay. When renting the landlord shoulders that liability, when you take a mortgage it’s on you.
Ain’t that the truth. When you “own” a home, you’re only one $15k disaster away from being homeless.
Slightly preferable to being rendered out of a home due to your landlord making a $15k investment disaster.
In the years I rented I had two (technically 3) homes get sold by a landlord needing the cash.
Yeah, my bf & I were made homeless when our previous landlord decided to sell our home, we believe because it had plumbing problems that he didn’t want to pay to fix. We thought about making an offer, but he was asking over twice what he paid for it, and there was quite a bit of damage to the parts of the property that we weren’t living in: water, fire, termite. It cost us thousands to move out, even with nowhere to move to.
I’m glad I live somewhere with enough protections for renters that I would not lose my home if the landlord sold it to a new owner. It’s crazy to me that landlords in other places can just kick people out when they feel like it
Based on your name, it’s one of the German-speaking countries. While yes, the law is more in favor of tenants than landlords, here in Austria our landlord’s way of kicking us out (because he wants to sell the place) is by not extending our befristet Mietvertrag. So now we have to buy our own because paying mortgage is cheaper than renting ¯\(ツ)/¯
They can’t just kick you out if you have a lease.
Yeah but I believe in a lot of places they can choose to not renew your lease which is effectively the same thing?
In my case at the time it was just an effect of being poor. At least one scenario I had a legal case, but I couldn’t afford the costs to bring it forth and it would cost more in legal fees than the case was worth. I simply didn’t have the time or resources, especially since I had to focus on moving and getting security deposits together so as to not be homeless.
The protections are there, they just are not for certain economic classes since there’s an exploitable time window to operate within.
Yeah, I think here (Los Angeles) the only reason outside of breaking the lease you can be evicted is if the landlord wants to personally live in the home or it’s getting demolished.
If you own a home then of course you should keep at least this amount in liquid cash. If you don’t, u are dumb. And yes, if you can afford a home, you can afford to have a liquid cash reserve of this magnitude.
You’re out of your fucking mind guy. USDA Rural loans are 0% down, fixed interest 30 year loans and if normal people would go take a first time homebuyer class they would know that. My wife and I bought our house for 250k, nothing down and roughly 1500/mo mortgage. 5.9%. If you’re trying to buy in a suburban area idk what to tell you other than the country is pretty nice. And we have never had $15k in actual savings outside of our checking accounts.
Don’t worry. That same bank will give you an auto loan for $750/mo for 7 years at just 9% interest. That way you’ll always have a place to live…
💀
Yeah people 100% lose their housing before their car in my area. You can live without a home, you can’t live without a car.
The neat part about fractional banking is that the bank is allowed to just “create” money out of thin air and issue the debt to you. They don’t have to have the money to issue the mortgage. They don’t care that your debt is “risky” because investment banking is really just run off of vibes at this point.
Historically and today, discrimination has been a big factor in who gets approved for mortgages.
The entire concept of risk that not explicitly based on the individual, like extrapolating from population data, is discriminatory to the individual
That’s not how fractional banking works. You’re confusing the economic concept of money supply with outright fraud.
They don’t “create” money. Someone deposits $100. They take $80 or $90 of that and use it to make loans. This increases the overall supply of money in the economy. But there’s no printing press in the back office turning out notes. And they don’t do the same thing digitally. The only bank that’s allowed to literally poof money into existence is the Federal Reserve.
Couple problems with that.
Zero reserve banking has been allowed since 2020 (US). Banks are not required to have any cash reserves in order to make loans.
Fractional reserve banking does not mean that no money is created out of thin air when making a loan, but that not all of it is.
Actual empirical evidence and bank records support the notion that at least the bulk of the money loaned is created ex nihilo.
https://www.sciencedirect.com/science/article/pii/S1057521914001070
Well if we’re actually going to be honest nowhere in the US is there a $950 mortgage. My mortgage is 2k for a $250k house so 1k mortgage would literally be living in a slum.
My mortgage is just over 1k, thankfully I refinanced when rates were low. It was a 200k fixer-upper but the best I could do in this area at the time. Now even though I kind of want to move, I don’t want a different interest rate lol.
Not US but Atlantic Canada.
I have a 14 acre farm I bought 4 years ago.
My mortgage is just over $900 a month. Home insurance is $250
Depends when you bought your house.
If they are renting and denied a mortgage then i think its safe to assume they haven’t bought a house
Mine’s $565, 3br., 2ba.
What’s your loan:value ratio on your mortgage?
High down payment? Or crack house? Lol
After you add property taxes and home insurance what’s your payement? You pay that yearly or monthly so it’s disingenuous not to count it
Does that mean people should include their renters insurance when they’re listing their rent?
Is renters insurance “required” where you live? If yes, then yes, you definitely include it. If not, then no.
Yes 100%
Is it included in their rent payment like your home insurance is in your mortgage payment?
Not every mortgage payment includes home insurance in it.
Or in the absolute middle of nowhere.
That really depends, are you counting the mortgage as the mortgage + property taxes + insurance?
Your “mortgage” payment is usually a bundled escrow payment. My mortgage is only 425 every two weeks, but I pay the property taxes (5600 yearly) and insurance separately. I bought the house for 235k ten years ago, is value is currently 475k (according to Zillow)
I live in one of the richer areas of greater Cincinnati, in one of the top 10 school districts in the entire state of Ohio. I wouldn’t call it a slum.
Separating the taxes doesn’t mean it doesn’t count. It is an additional payment or cost you have associated with your house. Not counting it in your mortgage cost is not being truthful.
After taxes and insurance your house costs you roughly $1450/month. More expensive than the example tweet and I guarantee you have a fantastic rate, probably 3.8% or lower.
It is extremely reasonable for a lender to assume that if a person struggles with rent, that they will struggle even more to pay a mortgage.
Side note nice job paying every 2 weeks. Great way to pay extra and pay less interest.
Yes, I fully took advantage of Covid and I re-financed at 2.4?
But yeah, owning a house costs a lot more than just paying the loan.
Obviously inaccurate.
250k @4% is $950/mo for 30 years
so, yeah, bit of a stretch
am i the only one remembering trump proposing thia along with 50 year mortgage.
edit: fixed spelling
Banks like making money. Mortgages are a great way to make money for a bank.
If you’re being turned down by the bank, it’s not because the bank is passing up an opportunity to make money in order to keep you from owning a home. It’s because their risk models say that if they give you the loan, they might not make money.
If you’re being turned down by the bank, it’s not because the bank is passing up an opportunity to make money in order to keep you from owning a home. It’s because their risk models say that
if they give you the loan, they might not make moneythey think they’ll make more money loaning that cash to your landlord.Banks fuck up all the time. They are not run by immaculate money wizards. The idea that you aren’t getting a house loan because you’re a big risk, but Sam Bankman-Fried secured $60B because FTX was a safe bet, hasn’t born out in practice.
They do show a heavy bias towards people who already have (or appear to have) a great deal of money. So that institutional bias fucks individual lenders over in the long run, while creating a great deal of financial risk at the top of the wealth pyramid.
Banks are a scam
ok
Scanks are a bam
No no. Their AI models just think you’re black and you’re trying to buy in the wrong zipcode
Redlining guys. It’s trained in.
I wish we had a love for landlords sub so I could roleplay like half the people in these comments.
Honestly tho. Imagine simping for landlords in this day and age. Gross.
I’ve rented, and I’ve owned. I prefer to rent, if that means I simp for landlords then I guess I simp for landlords.
Dude it’s in the fucking name. What serf wants to be a fuckin serf?
Both renting and owning are costlier because of the parasitic landlord caste.
It means you’re an idiot. Objectively. Which is why I’m going to make jokes instead of trying to convince you. 🤡
It depends on location. Some places have good rent control, so rent tends to be cheaper than buying.
NYC rent control magic is a special situation but you’re still paying forever. You get an asset at the end of a mortgage. Can you imagine owning in NYC?
NYC isn’t the only place with rent control.
And just so we’re clear, “cheaper to rent” means that after the 25-30 years that a mortgage normally lasts, you’d have the money to buy a home without a mortgage. If what you have in savings is less than the value of the home you would’ve had, then it’s not cheaper to rent.
But the 1400 doesn’t require any trust since if they can’t afford that, they’re out. If they can’t afford the loan, the bank would be out the loan sum.
the bank would be out the loan sum.
the bank isn’t out of jack shit, they reposess your house.
Which they can re-sale at a higher value to the next fool. So it’s in their interest that you pay for a while, then sale or fail.
Congrats, you recreated the 2008 financial crisis!
If I had an Apple that you want and I sold it to you but you didn’t eat the apple and it never got spoiled, I could sell the apple to someone else if you didn’t finish payment. You are just one step in a series of many many re-sales of the same house. The house is owned by the banks. They just change which bank is on the title after your temporary ownership. You see, you have this funny thing we all humans have…limited shelve life. Banks don’t have that. They can last for as long as many generations of people. So long as the financials work, they can stay afloat. Not you. You die, your kids die, their kids die. People tend to not stick around the same house forever. So every interchange between you and the bank, the bank always wins. You always lose to inflation. The bank always wins because a house always is worth what people are willing to pay for a house…it rides inflation.
The life of a mortgage is worth far more than the house. It’s in their best interest that you stay in the house for the entire 30 years of the mortgage and pay for it on time every time. Foreclosure is expensive.
Its only temporarily expensive. Let’s say there’s only one bank and one house. Then whenever the owners fuck up and they lose the house as expected, the same bank owns the house. Now just add an “s”. Whenever everyone fucks up their houses are owned by the same banks. The banks are not there to help you. They are there to extract your labor into a form that can be monetized. So having bank X or bank Y own the house doesn’t really matter… A bank will eventually own your house back. You work all your life but there’s no venue to actually keep a house under your control and ownership. Just taxes are enough. Fuck up in taxes and you lose the house.
I think I understand what you’re trying to say but you’re still missing the main point. You pay interest for the full 30 years of the mortgage the most profitable position for the bank is for you to pay that interest for the full 30 years of the mortgage. It’s not temporarily expensive for them to foreclose they lose out on 30 years of being able to rake in money while doing absolutely nothing.
Yes agreed. But they still ride inflation because they create it. You were supposed to pay 1,000,000 but stopped at 7000,000? They’ll sell it for 1,300,000 and someone will buy it. If not, someone will buy it at the loss. That one bank loses the 300,000, but another bank makes 1,000,000 because someone will buy it. Say your monthly was $350 and you stop paying. The bank then takes the home and pays a Realtor to sell it. A few months later they are making $450 a month. They just lost some time on it. If you pay it completely then another bank eventually owns the house when you sell one day.
You were supposed to pay 1,000,000 but stopped at 7000,000? They’ll sell it for 1,300,000 and someone will buy it.
Any profits from a foreclosed home go to the evicted homeowner. Banks do not make money on foreclosures. Banks do not want to foreclose on you, they want you to pay your bill.
I get what you are saying, but I think you are vastly overestimating how much foreclosed houses sell for.
Interest is typically front loaded, yeah? The loan only becomes less profitable as time goes on with inflation growing and interest dwindling.
Less profitable is not unprofitable. But yes interest is typically front-loaded and if you’re still deemed to a higher risk typically have to pay insurance on top of that. In this case though they’re hedging against the fact that you’re going to move not that you’re going to foreclose.
Banks do not make a profit on foreclosure. If the house sales for more than the bank is owed (including foreclosure fees), then any surplus is given to the original owner.
So the bank gets the money they are owed?
Not necessarily. There is no guarantee that the house will well for enough. Normally this works fine, but sometimes a loan can be underwater, and have a larger balance than the house is worth; or it could not have enough equity to cover the cost of foreclosure and flipping. This is why the US requires mortgage insurance for mortgages with less than 20% equity.
You could imagine a scenerio where banks find a loophole to skirt the PMI requirements causing a real estate bubble to drive up the purchase price of houses. Them a recession causes widespread defaults, further triggering a collapse of home prices, forcing financial institutions to be unable to recoup the cost of loans. Loans which, incidentally, were rated as very unlikely to default due to other financial schenenagans. We call this scenerio 2008
*sells
This ignores the market manipulation they can do by just selling to “totally not related to out bank… blackrock or something”.
Are they not required to sell it on the market? So if a related company bids low, anyone else can just swoop in and take it.
That’s not completely true, because it depends on the future value of your house. Plenty of banks got burned in the early 2000s when they gave out too many loans and then all of a sudden the houses weren’t worth what people owed on them.
I’ll shed a single tear for those banks who reposessed those houses that are now worth an absolute fucking fortune when I get a house of my own.
I’m not crying for the banks, but that’s why they don’t just give out loans to anyone.
If there is ever an economic crisis that results in housing prices dropping, the banks get bailed out.
Foreclosed houses very rarely sell for what they’re worth and it’s not uncommon for people who are foreclosed on the trash the house on the way out.
When my wife and I were recently looking for a house in the city we moved to recently one of the houses we looked at had had the air conditioner taken by the previous owners because it had been foreclosed on. I’m serious, the entire fucking condenser was taken.
yeah but you’re not going to make me feel sympathy for JP Morgan Chase.
They should’ve cut back on their avocado toast if they wanted to run a successful bank
I wasn’t trying to make you feel sympathy for a bank. Just pointing out that foreclosing on a house isn’t profitable for a bank.
Just pointing out that foreclosing on a house isn’t profitable for a bank.
not really. They got paid at least some of the mortgage, housing prices keep going up and damage is fixed by paying some poor asshole peanuts. Even if it isn’t profitable , I don’t really care, I’m not losing any sleep at night over the fucking assholes.
Nobody was asking you to lose sleep. I kind of feel like you need to calm down.
why are you so hell bent on defending the banks? I feel you need to relax and not put in overtime.
After 2007/2008 it became very clear to banks that they need to prepare for the case where people can’t make mortgage payments because the economy crashed, and house values have plummeted because nobody’s able to buy a house because the economy crashed.
That $950 mortgage also doesn’t include taxes and insurance plus the cost to maintain a house. All of that is wrapped into the cost of rent.
Mortgage calculators are deceiving.
That $950 mortgage also doesn’t include taxes and insurance plus the cost to maintain a house. All of that is wrapped into the cost of rent.
And the profit the landlord takes on top of that. Landlords don’t generally rent out to break exactly even on cost.
Landlords also do cheaper repairs.
When it’s your house you’re likely to go for the higher quality options when the major repairs hit and do more timely repairs on things landlords will ignore.
When it’s your house
If you’re the landlord, it is your house.
The difference is that you’re not living in the house if you’re a landlord. A smart landlord will still do high quality repairs on certain things: roof repairs, pipe leaks, electrical issues, etc. Not fixing those things quickly and fixing them well could result in long-term damage to the property. But, there’s another class of problems that are annoying to the tenant but not a priority for the landlord. For example, a toilet that doesn’t flush well. That’s an annoyance, but probably won’t damage the property in any way, so the landlord might not care much.
Even in the best of cases, landowners may not be generating a direct profit but are generating equity in the home.
I had to explain this to one of my landlords (he was a first time landlord and it was his old place) once a long time ago. He was quite shocked that he wasn’t making nearly as much money as expected when the homestead exemption was lifted from the home. He tried to increase our rent well above the average for the area because of it and we had to threaten to walk.
LOL. If you want to dump 300,000 into a house… Years and years of your own work…just to have to pay $300 bucks every month for 30 years to double your money? To then repair the house with that money and end up owning a house in 30 years when you’re too old to work…that’s not a good deal.
You’d be stupid to do that, even if you were genuinely trying to be charitable about renting. You’d want some profit for repairs and sudden issues.
Why the fuck should the price to rent something give profit over the monthly pay of a loan to own it?
Landowners want renters to pay for their stuff. They’re lazy leeches.
See, your foolish mistake is applying morals and logic to the profit drive. There are none to be found, there. Just people who want more money, because they can, and have the law behind their back, threatening you with homelessness and the destruction of your continued existence.
Jokes on my landlord, if I ever lose everything, so does he. 🔥
Damage to Capital is based.
They’re insured against your pyrotechnic solutions. Are you? Typically insurance doesn’t pay out to the policy holder if they intentionally cause the damage.
If you’re taking in rent for only the predictable running costs then how are you paying for some sudden issues?
Revenue for repairs and sudden issue is still breaking even, the point of profit for landlords is to well generate profit on the bottom line.
A landlord is almost always making money even if they are just “breaking even” on the mortgage.
If the landlord is still paying for a mortgage, the profit goes into their equity gain.
Once the mortgage is paid off, the profit goes into the landlords pocket.
This is how many people get started being parasites on society. They have other people pay the bank while they gain the assets of their labor.
You’ll have to have some profit if you want money to pay for the repairs and sudden issues without it being from your pocket.
Did… You read their comment?
I did. Where would the money for the sudden issues come from if you didn’t make a profit from the outset?
Every mortgage calculator I have used includes fields for taxes and insurance.
But it also doesn’t include the tax deduction on the interest, and the fact that the principal is essentially a saving account you are paying into yourself every month, which will come back to you when you sell the house.
It’s really fucked up how they prevent people from home ownership. And they even try to sell this through the mainstream media as making it sound like sometimes renting is a better option. In some super rare cases it is a better option. But mostly it is not.
Anyone thinking they’ll making a dent on the principle for the fist five years is going to be very disappointed. Selling get five years, closing costs are likely to put you in the red.
Renting is better only if you’re not committed to the area. But if you end up renting the same place for 10 years, you’re definitely losing out.
There’s no single solution here and playing the media on this one sounds childish. Read better media.
Five years in and 1/7 of my principal is already paid off. That’s a nice dent.
Yeah it’s kinda depressing how owning a home is the only financially responsible option, all other things being equal
That’s about the cost of my mortgage, and I also pay $300 in property taxes, $400+ utilities, $120 insurance and have to pay for repairs. That $1400 rent number seems really cheap, I’m guessing it’s comparing a single bedroom apartment to a house? Definitely not apples to apples.
Except now they can sell the home. Which probably has appreciated on value since the loan. Plus the loan interest since it was purchased originally. And payments at the front of a mortgage are almost entirely interest since the principal is so high.
Any recession can cause a downward pressure on house prices at the same time as difficulties paying for a mortgage. You may not be able to sell the home for enough to pay off the mortgage when you get into trouble.
I have never in my life seen house prices go down. They just quit going up as fast.
In my life I’ve had two times when they went down along with unemployment going up.
The 2008 crash and a local crash due to the biggest employer in town being on the verge of bankruptcy in the 1990s.
Yeah, that idea is very 2007. The 08 crash was a great time to buy a house if you still had a job because a lot of foreclosed houses were for sale for way less than they’d been bought for by their previous owners.
You’re right, I had a brain fart
Although on paper this seems dumb, there are other factors. Is the rent inclusive of utilities? Property taxes are a factor. Generally when renting appliances and repairs are taken on by the landlord whereas a mortgage the owner. My previous rent and current mortgage are about the same, however now that I pay utilities, property taxes, and some repairs I’m paying on average extra $600, or a 50% increase (rent/mortgage about 1200) , in housing costs.
The bank is also factoring in what would happen if interest rates went up significantly.
The overwhelming majority of home loans are fixed rate. The only portion of your mortgage that would change in the case could be your escrow payment if your property taxes and/or homeowners insurance rates change (which can both change very much)
The fixed rate is usally offered for 3-5 years, at which point you must remortgage your house.
Depends on the country.
In the UK 3-5 years is typical. In the US it’s fixed for the whole term and you can even remortgage to a lower rate during the term if it becomes available.
There are variable rate mortgages in the US. A common tactic is to get one of those, then refinance into a fixed rate loan in about five years, which is around the time the rate might change. If your property value goes up enough, you may be able to ditch the mortgage insurance then, too.
You’re describing a first time homeowner loan. Not a typical mortgage in the US.
They’re certainly popular for first time buyers, but they’re not exclusive to them.
I may be confused about what you’re trying to say, but, no, first time homeowner loans are exclusive to first time homeowners. It was a program set up by Obama.
Are you suggesting landlords pay for that out of pocket and that isn’t priced into the price of rent? That they take on those costs out of the goodness of their hearts? That they don’t turn a profit, after all is said and done? That that profit wouldn’t mean savings for people on a mortgage? Give me a break.Edit: I can’t read, apparently.
Not at all. It is priced into the rent but it is not priced into a mortgage, so you can’t compare them dollar to dollar accurately when determining monthly expenses.
I was afraid of the possibility of misinterpreting what you wrote. Sorry about that.
🔥
