Results 1 to 18 of 18

Thread: Housing Issue

  1. #1
    Senior Member lakeripple's Avatar
    Join Date
    Dec 2006
    Posts
    195

    Housing Issue

    I was chatting with the old man today, and the conversation turned to the housing crisis in the US and the effect it's had on the American economy. Up until today, I had placed a large part of the blame on those taking out mortgages they clearly couldn't afford, however, I've thought about it from a differect perspective.

    If you were paying $700 for rent in an apartment, and the bank comes along and offers you a 1.5% interest rate fixed for 5 years on a fairly nice house w/ a yard, etc... Instead of paying $700 for rent, I could be paying $800 and living in my own house. After 5 years, the rate changes and I find myself unable to pay and default on the house. You rented a house for 5 years at $800/month.

    It seems as if the issue came about as a result of greed on the part of the banks, they should never have offered such low interest rates to those people in the first place. They made poor business decisions and now they're paying for it.
    Goal: Set a deadlift provincial record in mens junior.

  2. #2
    Tap, Rack, Bacon ncsuLuke's Avatar
    Join Date
    Apr 2005
    Location
    Dallas, TX
    Posts
    1,381
    it wasnt a fixed rate. if it was a fixed rate then it wouldnt change. that is the chance you take when you get into an ARM

  3. #3
    Senior Member lakeripple's Avatar
    Join Date
    Dec 2006
    Posts
    195
    Quote Originally Posted by ncsuLuke View Post
    it wasnt a fixed rate. if it was a fixed rate then it wouldnt change. that is the chance you take when you get into an ARM
    ...1.5% interest rate fixed for 5 years...

    Obviously it's a variable rate if I've included a term. I think it's clear enough that I'm reffering to it fixed for that term.

    But you miss my point, as a consumer I wouldn't be taking a chance. I would be living more comfortably for 5 years, than I would if I was renting, yet I would be paying nearly the same. All this is made possible due to low interest rates, had the banks not set it so low, they wouldn't be in the situation they are now. Now the fed is bailing them out left and right, and tax payers are expected to pay for it.

    My point was that instead of putting the blame on "dumb" people living beyond their means, the real blame is with the banks that made these mortgages available at a pricetag similar to renting.
    Last edited by lakeripple; 09-19-2008 at 12:37 PM.
    Goal: Set a deadlift provincial record in mens junior.

  4. #4
    Tap, Rack, Bacon ncsuLuke's Avatar
    Join Date
    Apr 2005
    Location
    Dallas, TX
    Posts
    1,381
    no you would be taking a chance...you would be taking a chance that interest rates change

  5. #5
    Senior Member lakeripple's Avatar
    Join Date
    Dec 2006
    Posts
    195
    Quote Originally Posted by ncsuLuke View Post
    no you would be taking a chance...you would be taking a chance that interest rates change
    If the interest rate...

    ...increases, then I default on the house and go back to renting. I haven't lost anything, and I spent the last 5 years "renting" a home at the same price as if I were renting an apartment.

    ...stays the same, then I keep my house. Yay!!

    From a consumer perspective, in either case I'm coming out on top.
    Last edited by lakeripple; 09-19-2008 at 12:46 PM.
    Goal: Set a deadlift provincial record in mens junior.

  6. #6
    Banned
    Join Date
    Apr 2008
    Location
    Kansas City, MO
    Posts
    3,096
    Except your credit is jacked and you lose your house and as much as the bank can get from you.

    Plus you have to buy the house which involves fees on its own.

    And the banks aren't at fault for "charging" low rates, they had to. There was so much money and they had to get rid of it and all the other banks were competing with them, so they just bid each other down. You don't have to accept a loan if you can't pay it off in 5 years. Thats just fiscal irresponsiblity. There were a lot of people/institutions at fault on this one, not just the banks, and not just the people who took the loans.

    Edit to include: 800/mo for a home != 700/mo on an apartment. You don't need as much insurance, there is little if any maintanence on the apartment as well.
    Last edited by Reko; 09-19-2008 at 12:51 PM.

  7. #7
    Tap, Rack, Bacon ncsuLuke's Avatar
    Join Date
    Apr 2005
    Location
    Dallas, TX
    Posts
    1,381
    Quote Originally Posted by lakeripple View Post
    If the interest rate...

    ...increases, then I default on the house and go back to renting. I haven't lost anything, and I spent the last 5 years "renting" a home at the same price as if I were renting an apartment.

    ...stays the same, then I keep my house. Yay!!

    From a consumer perspective, in either case I'm coming out on top.
    ummm no

    defaulting on a house is absolutely terrible for your credit and has many repercussions
    Last edited by ncsuLuke; 09-19-2008 at 12:51 PM.

  8. #8
    Senior Member
    Join Date
    Feb 2006
    Location
    texas
    Posts
    654
    Quote Originally Posted by Reko View Post

    Edit to include: 800/mo for a home != 700/mo on an apartment. You don't need as much insurance, there is little if any maintanence on the apartment as well.
    So true on top of that your electric bill will go up. Then there is the maintenance cost that you were talking about. My friend was trying to convince me of the same thing recently after we talked about it we realized it wasn't a good idea.

  9. #9
    mind/body zen's Avatar
    Join Date
    Mar 2004
    Posts
    386
    When I became a first time home buy, my goal was to stop throwing money away into rent that could (atleast partially) be going into equity.

    So, when I went hunting for houses, I made sure I wasn't buying over my head, and getting payments that are too large to handle.

    Also, I got a fixed rate mortgage.

    I also took the time (and effort and discipline) to save up for a decent downpayment before I bought a house.

    It was my first time buying a house, and I had no experience doing it, yet somehow I manage to keep my goals grounded.
    Why is it that some people act like it takes a genius to figure out that it's a gamble to take out an adjustable rate loan, or that your monthly mortgage payment should not be more than 1/3 of your monthly income?
    It's not rocket science. If half your paycheck goes into your mortgage, you will be broke buy the time you pay your bills and buy gas and groceries.
    'In order to alter the inertial mass of weights, you must become one with them, like a machine, the totality of your motion is as one'

  10. #10
    Banned
    Join Date
    Apr 2008
    Location
    Kansas City, MO
    Posts
    3,096
    Quote Originally Posted by method115 View Post
    So true on top of that your electric bill will go up.
    Forgot about the utilities too, good call.
    And I think they are high in my one bedroom apt!

  11. #11
    Former Fatass Unreal's Avatar
    Join Date
    May 2005
    Location
    SLC,UT
    Posts
    3,084
    My utilities for the house are about $100 more a month then my apartment. Gas and electric are about the same, cable didn't change, water/trash went from about $15 to $115. What really gets me though is upkeep. Almost monthly its $100 here and $200 there to fix stuff. Heck I had to pay $2000 to fix some stucco on the house. I need a new hot tub cover and some cement fixed that will be another $1000. That stuff addes up.
    Nick V

  12. #12
    Simplistic
    Join Date
    Nov 2001
    Location
    Albuquerque, NM
    Posts
    2,179
    You're basically acknowledging the stupidity of consumers and using that to blame the banks, who were apparently also stupid, or greedy as you put it.

    The people who took out the loans were morons, and the banks put too much faith in them, which also makes the bankers morons.

  13. #13
    hmm, I like to be big!!!
    Join Date
    May 2001
    Location
    New Jersey
    Posts
    2,236
    Quote Originally Posted by Neil View Post
    You're basically acknowledging the stupidity of consumers and using that to blame the banks, who were apparently also stupid, or greedy as you put it.

    The people who took out the loans were morons, and the banks put too much faith in them, which also makes the bankers morons.
    The real morons are the taxpayers, because they're going to be the ones who pay for it...
    Chris Mason is my master.....

    American cars are like fat people, sure, they have a lot of power, but they're not built well, and they have all that useless weight, plus they make both make funny noises.

    feel free to aim me, nejar462 im on a lot. Don't know much to warn you dudes, but im good at conversations.

    Belial in reference to Ronnie Coleman, "Some people say he still has blood in his steroid stream, but I doubt it. Gas isn't one of the side effects, but that massive bloated overly muscular freak of nature circus sideshow appearance might be what tips most people off."

  14. #14
    Banned
    Join Date
    Apr 2008
    Location
    Kansas City, MO
    Posts
    3,096
    Quote Originally Posted by nejar462 View Post
    The real suckers are the taxpayers, because they're going to be the ones who pay for it...
    fixed

  15. #15
    Banned
    Join Date
    Jul 2008
    Location
    Orlando
    Posts
    153
    I like living in my apartment for these reasons.

  16. #16
    hmm, I like to be big!!!
    Join Date
    May 2001
    Location
    New Jersey
    Posts
    2,236
    Quote Originally Posted by Reko View Post
    fixed
    Thanks for the assist. Its more accurate now.
    Chris Mason is my master.....

    American cars are like fat people, sure, they have a lot of power, but they're not built well, and they have all that useless weight, plus they make both make funny noises.

    feel free to aim me, nejar462 im on a lot. Don't know much to warn you dudes, but im good at conversations.

    Belial in reference to Ronnie Coleman, "Some people say he still has blood in his steroid stream, but I doubt it. Gas isn't one of the side effects, but that massive bloated overly muscular freak of nature circus sideshow appearance might be what tips most people off."

  17. #17
    mind/body zen's Avatar
    Join Date
    Mar 2004
    Posts
    386
    Quote Originally Posted by nejar462 View Post
    The real morons are the taxpayers, because they're going to be the ones who pay for it...
    since when do "taxpayers" have a choice?

    True, IRS agents don't bust down your door with tactical rifles slicing corners through your house, just tell me what happens if you don't pay.
    Ain't no "moron" (or "sucker") about it. In America, when it comes to taxes, it isn't pay to play. It's pay to have your piece of life, liberty, and pursuit of non-incarceration
    'In order to alter the inertial mass of weights, you must become one with them, like a machine, the totality of your motion is as one'

  18. #18
    hmm, I like to be big!!!
    Join Date
    May 2001
    Location
    New Jersey
    Posts
    2,236
    Quote Originally Posted by zen View Post
    since when do "taxpayers" have a choice?
    Quote Originally Posted by zen View Post
    It's pay to have your piece of life, liberty, and pursuit of non-incarceration
    There is a discrepancy here, by paying, you're LOSING some liberty and life, not gaining, you're just praying you might get it back in a less pure form.

    Quote Originally Posted by zen View Post
    Ain't no "moron" (or "sucker") about it.
    We vote poorly. The taxpayers has a choice, they just choose poorly.
    Last edited by nejar462; 09-20-2008 at 08:24 AM.
    Chris Mason is my master.....

    American cars are like fat people, sure, they have a lot of power, but they're not built well, and they have all that useless weight, plus they make both make funny noises.

    feel free to aim me, nejar462 im on a lot. Don't know much to warn you dudes, but im good at conversations.

    Belial in reference to Ronnie Coleman, "Some people say he still has blood in his steroid stream, but I doubt it. Gas isn't one of the side effects, but that massive bloated overly muscular freak of nature circus sideshow appearance might be what tips most people off."

Similar Threads

  1. Housing recommendations in the DC/VA/MD area
    By McIrish in forum General Chat
    Replies: 22
    Last Post: 09-27-2006, 07:06 PM

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •