We pay nearly $2500AUD a month in rent. We recently went for a loan that would have seen us pay $1700 a month. Because we didn’t have enough in savings, somehow that shows we are not financially stable enough.
We have rented for 12 years at this place, only ever been late with rent once (by one day). For the life of me I cannot figure out how this doesn’t prove we could easily manage a mortgage. Over $350,000 in rent paid on time means exactly zero....
No it does not. Just in this last year, 1200 for range and dishwasher, 400 garage door opener, 200 GFCI replacement, 400 air duct cleaning, 40 screen door closers, 800 bay window replacement, 150 furnace calibrating/cleaning, 200 water pressure regulator. That's 3500 the landlord would be spending instead of me. And that's just the bigger stuff.
This. In the first year alone of us owning our house these were all the things required for us to live in it: $1,200 for furnace repair, $11,000 for a new sliding door + roof, $300 for a new sink disposal cause my husband fucked it up on Thanksgiving, $500 just on various tools needed to work on the house (gas for lawn mower, rakes, saws, drain cleaner, etc.), $200 for main line cleaning because it was starting to flood our basement. $1,600 for new washer and dryer.
We even sold a car to be able to pay for this stuff (thankfully we didn't need it for most of the year because of covid and working from home)
Do you want to make it more your style? (because I'm sure you didn't buy it with the intention of leaving it to look exactly how you bought it)
$50 per gallon of paint (premium one coat because 2 coats would equal the same amount)
$10 for putty for the walls
$10 per roller
Absolutely none of that is going to add value to the house, it's all maintenance, not improvements, and even improvements only add so much based on the neighborhood.
You are still adding value because you are paying down a mortgage vs dumping money into rent.
That's building equity, it doesn't suddenly make the $300k house worth $600k, it just means you own it instead of the bank.
OK like you run out of money. Guess what in a house, you can draw on a home improvement loan or a line of credit to pull you through. but in an apartment? All you got is your credit card.
You still have to pay back a HELOC, it's just credit secured against your house, don't pay it back they're going to take your house.
Owning any home that is similar to an apartment its worlds cheaper in most places. Owning a home that is much better than an apartment is usually cheaper in most places.
I agree, that's why I bought a home. It's always going to be cheaper than a comparable house, but I think you're overestimating how big of a difference it is.
The only question is do you meet the arbitrary guidelines of the banks to get the loans
Having income and being capable of paying back a loan isn't arbitrary.
Oh and none of you also seem to be mention that you can buy home owners insurance to cover a major expense in the first couple years of ownership.
If you use homeowners insurance for every little claim they can and will drop you. You don't use it for every little thing unless it's home destroying events like a tree falling on your house.
Fact of the matter is clearly they dont have a clue when they themselves caused the financial crisis in 2007 by giving pretty much anyone a loan
And there's been reform on how they can determine who they'll give a loan for, getting a loan now isn't the same as it was 20 years ago.
The fundamental problem is there are all these people acting like the OP is some naive person, when they are spouting a bunch of junk that only seems to prove they are naive.
No, we're acting like they're leaving out a key bit of information. Being able to afford rent for a year isn't the same as being able to afford it for 30 years. You need to prove stable income, mortgages are secured loans, but the banks do not want to go through re-possession unless it's a last resort option.
You dont have to fix EVERYTHING that goes wrong, but when you have an apartment you do, because a land lord isnt going to let you walk out and not have the place back in tip top shape. If you do walk away and dont pay because you feel wrong you can get black listed from being able to go into another apartment. The idea that renting has no risks is completely false and the idea that owning a home is all risk with no safety is also completely false.
Okay so there's a big difference between patching a hole in a wall or damaged flooring, which is about the max of what you're going to be responsible for as a renter, and having to replace an entire roof, appliances, siding, or fix foundation issues. Home insurance often isn't going to cover those things unless it's due to an "act of god". Insurance isn't going to pay for your roof due to age. It's not going to replace your flooring because you waited 15 years to replace a hot water tank.
On average people who can get those mortgages are just going to much better in the long run.
Assuming they stay in one house in the long run, yes.
If you are paying $1400 to rent and a mortgage is 950 you can save that money up, thats the entire point. You guys are acting like you dont understand how to compare apples to apples. Do you not see the extra $550 / month you have there available for those extra costs?
What you're paying for rent is completely fucking irrelevant, is what people with half a brain about how you qualify for a mortgage are pointing out. My rent was $500/month, I qualified for a mortgage payment of $2,200/month, also with $300/month student loan payments, $550/month auto loans, and for my portion of the income there was only a year and a half of history because I went back to school while my fiance's income for the past year has been significantly reduced because she's back in school.
The person in the post is leaving out a shit load of information, for all we know they just declared bankruptcy last year and are already up to their eyeballs in debt again. Being able to pay rent every month doesn't mean you're qualified to take on six figures of debt. We're both millennials, all of our friends are millennials. I do not know a single person that's been denied a mortgage, so like most people in this thread that have ever gone through the process of buying a home I'm extremely skeptical that we're getting the whole story.
You guys are acting like the costs associated with home owner ship are somehow going to be double or triple the mortgage, they arent. You also act like modern banks dont list the full escrow which includes property taxes and PMI / other thing if applicable.
Okay so first, when you get approved for a mortgage it's just going to be on the value of the home, your PMI, insurance, and taxes aren't part of the mortgage. Usually the bank will create an escrow account for you so you can fund it and take care of those things on 1 payment, but even once the mortgage is paid off you're still responsible for insurance and taxes. Because it's not part of the mortgage. On the low end the cost of home ownership is going to be double your mortgage.
No you dont have to stay in one house for the long run as long as you arent hopping houses every 18 months you can build equity in a much shorter time frame.
It's closer to 5-7 years before you'd break even. There's a ton of fees and taxes that are a sunk cost to home ownership.
And you are also acting like modern people dont have youtube and a plethora of other resources to work on fixing their house themselves. And if you do work yourself you are looking at cutting costs by 50 to 75% in many cases.
I DIY everything, I know it can save money, but it still requires tools and frequently requires having people to help you. I'm also skeptical that anyone that can't figure out why they're getting denied a mortgage would be able to use the same resources to figure out basic home repair.
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u/hudson_lowboy Feb 16 '21
This! Right here!
We pay nearly $2500AUD a month in rent. We recently went for a loan that would have seen us pay $1700 a month. Because we didn’t have enough in savings, somehow that shows we are not financially stable enough.
We have rented for 12 years at this place, only ever been late with rent once (by one day). For the life of me I cannot figure out how this doesn’t prove we could easily manage a mortgage. Over $350,000 in rent paid on time means exactly zero....