FITM-K t1_j6xzk79 wrote
Reply to comment by Squidworth89 in So, naive question but, how do we go about politically motivating housing costs? by [deleted]
Yup that's exactly what I said, you nailed it.
Squidworth89 t1_j6y00p8 wrote
And return to irresponsible home loans… like we haven’t learned from that last time… mortgage is one cost to homeownership.
FITM-K t1_j6y21cb wrote
Yeah that's a great point, because when you're renting there are definitely no other costs associated with that.
Squidworth89 t1_j6y31mv wrote
You got $5k-$8k sitting around for a boiler? $20k for a roof? Banks want to know the property will continue to be kept valuable till they get all their money back.
FITM-K t1_j6y6zel wrote
>You got $5k-$8k sitting around for a boiler? $20k for a roof?
Not sure why you're asking me, but yes, I have enough money in the bank to pay for both of those things out of pocket. I'm not a renter though.
> Banks want to know the property will continue to be kept valuable till they get all their money back.
Reasonable, but (1) that is why they require home insurance and, (2) that doesn't make it reasonable to tell someone they "can't afford" a mortgage payment that's significantly lower than the rent they're already paying.
Yes, home maintenance costs money, but someone who's paying $2,500 for rent can save quite a bit of money every month if their mortgage is going to be $1,500. And while those big expenses you're talking about do happen, they're rare, and generally foreseeable. You don't just suddenly need a new roof, if the house is going to need a new roof, generally everybody is aware of that going into the purchase.
And if a surprise expense does pop up that the homeowner can't cover, there are options including home equity loan, HELOC, potentially the home insurance, etc.
And honestly, owning a home is a big part of the reason why I do have money in the bank to cover those kinds of expenses. If I had to try to rent an equivalent place, or even a smaller one, I'd be saving a lot less each month.
Squidworth89 t1_j6y9szs wrote
Mortgage lenders look for 35ish% debt to income. Some will go up to 45%. Even 50% sometimes.
The first one is very reasonable. The second two imo are borderline irresponsible.
Their rent payment doesn’t matter for getting a mortgage.
If they can’t get a mortgage; it’s either their income isn’t high enough to keep housing to an acceptable percentage or they have other debt issues.
That system isn’t the problem. That’s all very fair. Remember; just because they’re paying rent doesn’t really mean they can afford that rent. A lot of people are paying more rent than they should.
Which leads to the biggest issue being zoning and a lack of units leading to higher prices which have nothing to do with mortgages and is something they have a say in through voting.
thornify t1_j6ykfxl wrote
A big part of the reason banks are more conservative than landlords is because it takes about two months to evict a tenant, and about 18 months to foreclose on a borrower.
Landlords and lenders are not weighing the same risk, at all.
So it's not entirely fair to suggest that banks are saying renters "can't" afford a mortgage payment lower than their rent payment. It's more like, "as a lender, I am not willing to bet 18 months worth of payments, plus all the costs and hassle of a foreclosure, that you will be able to make this payment."
Antnee83 t1_j6y5va8 wrote
Yeah, if only there was some way to... "insure" the home against such large damages, so that you didn't have to pay a huge lump sum out of pocket.
And they could even require that you hold that insurance on the home while the loan is still active!
Man if only.
Jakelshark t1_j6y7a5d wrote
Insurance doesn't pay for maintenance on stuff like a new roof or boiler. That's normal wear and tear that you're expected to pay for as the home owner.
Antnee83 t1_j6y7vbl wrote
I mean, that's a fair point, but as an owner of an old fixerupper money pit myself, I can confidently say that those expenses pale in comparison to paying rent.
mymaineaccount46 t1_j6yqq9q wrote
A roof pales next to rent? What the hell does your rent look like?
Antnee83 t1_j6yrv3v wrote
Lets walk through this slowly.
Rent is more expensive than a mortgage for a comparable amount of living space. By a lot.
So If I'm renting, I'm wasting a shitload of money, that I'd otherwise be saving if I paid a mortgage instead.
With me?
So if I need to do repairs or maintenance, I have the money because my monthly expenses are lower.
No one is getting a mortgage and getting blasted with having to put a new roof on all of a sudden due to wear and tear. Anything else is covered by your homeowners insurance, which you have to have as long as you're paying the house off.
This really isn't all that hard. Mortgage = cheaper = save money = have money.
mymaineaccount46 t1_j6yukqw wrote
I think you'd be surprised. In my first house I had a furnace go very quickly after buying and my next home I had both washer and dryer go, as well as need to do roof maintenance. None of which made any sense to claim on home owners insurance and therefore came out of pocket.
Maintenance and surprise issues that insurance doesn't cover is not uncommon. If you don't have money to keep up with it and are depending on your insurance you're going to be in for a very bad time.
I spent thousands beyond my mortgage just keeping up and handling house issues at the last place I owned
Edit: forgot to add I had inspections on these places too. Shit just happens.
polypolypolygon t1_j6zx7b8 wrote
A roof typically lasts 20-30 years. Let's say 20. I just had mine replaced for 10k, but let's say you have a massive roof and it's 20k. That's $80 a month over 20 years, which is less than the rent increases most people see year to year.
Also when I replace my roof, it adds to the value of my house. When my landlord increases my rent to cover the new roof, it adds to the value of their house.
You're paying maintenance costs on the property either way, you just pay it through rent, building equity for the landlord. Oh yeah, and the roof repair on a rental is tax deductible for a landlord.
So sure, you do need some extra cash on hand for surprises, but it's leaps and bounds better than renting in the long run financially.
mymaineaccount46 t1_j71u0il wrote
Your comparing 80 a month over 20 years to a huge out of pocket expense. It doesn't matter if over 20 years the roof is cheaper if you can't afford it now.
Which is my point. A new roof is not cheaper than your current rent cost.
Squidworth89 t1_j6y80zv wrote
Those aren’t damages. That’s wear and tear. Insurance doesn’t cover that.
Goodunnn t1_j6y6led wrote
This is a naive statement.
mymaineaccount46 t1_j6ypz9d wrote
NINJA loans sound fun, let's have them back!
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