Yeah, but you need a down payment, and you need a bank to loan you the rest money for the house. The payment on that loan is half of rent, but that doesn’t mean it’s functionally accessible to most regular people.
Just an FYI for those in the US. If you’re a first time homebuyer then there are loan programs available where you can pay as low as 0% down. The payments will be higher than if you made a 20% down payment of course but in my case they are still cheaper than rent would have been in my area. Basically they just tack on an extra monthly fee until you hit 20% equity but that fee isn’t too horendous. In my case it adds about 7% to my total monthly mortgage payment. The whole 20% down thing is only really expected if you already own a home.
Loan accessibility and obcene home prices are still an issue of course. So while there are a lot of obsticles to buying a home, the down payment isn’t nearly as big of one as many people think.
Banks don’t give loans like that to people who aren’t high earners already.
People could happily spend 50%+ of their income on their mortgage but banks will not give them those loans because they are seen as high risk, whereas people can rent at 50%+ of their income because there’s less risk for the landlord (their only real risk is having to find a new tenant).
Yes I’ve applied. I bought a place last year so it’s very fresh. Banks being math-based is exactly the point. They won’t bend the rules for you. Plus the expense is mostly set in stone once you buy, whereas with renting you can rent an affordable place and have it increase year-on-year every year following, taking it from within that 35% to above it.
Yes, it’s in favour of buying in the past. If you missed your window you’re fucked though. That’s why I bought, because I recognised the sliding window and knew if I didn’t buy now I’d be locked out of buying forever and instead get stuck renting forever. I don’t think anyone is against buying, just often unable to.
Banks will not give you the loan if you do not make enough such that your repayments would be less than 35% of your income. But you could very well already be paying more than 35% of your income as rent. Trust me bro not everyone is renting because they feel like it. One of my friends saved a $100k deposit but didn’t have the income to get a big enough loan for a house. These people aren’t just stupid. Buying isn’t an option for them.
Yeah, but you need a down payment, and you need a bank to loan you the rest money for the house. The payment on that loan is half of rent, but that doesn’t mean it’s functionally accessible to most regular people.
Just an FYI for those in the US. If you’re a first time homebuyer then there are loan programs available where you can pay as low as 0% down. The payments will be higher than if you made a 20% down payment of course but in my case they are still cheaper than rent would have been in my area. Basically they just tack on an extra monthly fee until you hit 20% equity but that fee isn’t too horendous. In my case it adds about 7% to my total monthly mortgage payment. The whole 20% down thing is only really expected if you already own a home.
Loan accessibility and obcene home prices are still an issue of course. So while there are a lot of obsticles to buying a home, the down payment isn’t nearly as big of one as many people think.
Don’t you have banks that finance 100% of the price? Sure, they will charge higher interest, but if you’re saving half the rent it won’t be that bad…
Banks don’t give loans like that to people who aren’t high earners already.
People could happily spend 50%+ of their income on their mortgage but banks will not give them those loans because they are seen as high risk, whereas people can rent at 50%+ of their income because there’s less risk for the landlord (their only real risk is having to find a new tenant).
Have you applied? I found banks very reasonable, like math based. Landlords go on feelings/profiling, in my experience and very often go on 35% rule.
Yes I’ve applied. I bought a place last year so it’s very fresh. Banks being math-based is exactly the point. They won’t bend the rules for you. Plus the expense is mostly set in stone once you buy, whereas with renting you can rent an affordable place and have it increase year-on-year every year following, taking it from within that 35% to above it.
Isn’t that all in favor of buying?
Yes, it’s in favour of buying in the past. If you missed your window you’re fucked though. That’s why I bought, because I recognised the sliding window and knew if I didn’t buy now I’d be locked out of buying forever and instead get stuck renting forever. I don’t think anyone is against buying, just often unable to.
I don’t see how those reasons (strict solvency checking, rules based decision making, etc) would lock anyone out.
Banks will not give you the loan if you do not make enough such that your repayments would be less than 35% of your income. But you could very well already be paying more than 35% of your income as rent. Trust me bro not everyone is renting because they feel like it. One of my friends saved a $100k deposit but didn’t have the income to get a big enough loan for a house. These people aren’t just stupid. Buying isn’t an option for them.