FITM-K t1_j6y6zel wrote
Reply to comment by Squidworth89 in So, naive question but, how do we go about politically motivating housing costs? by [deleted]
>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."
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