[lbo-talk] wtf mortgages?

[Matt]

On Wed, Jan 31, 2007 at 04:36:22PM -0800, Jordan Hayes wrote:

> >>my son was told by his bank that they could get him a loan for a 
> >>house for $245k. he makes $13.50/hr. WTF?
> >>
> >>ARe these people completely off their rocker?

[...]

> Total cost: $22,048 of which $1996 is a subsidy from the tax man. 
> That's a net $2.47/hr into his pocket -- about $100/week for beer and 
> chips, call it $411/mo.
> 
> So I'd say they are off the rocker, but not completely batshit crazy. 
> Maybe he could get a roomate for $600/mo and drink imported beer.

Assuming they are offering him some kind of reasonable package, and
not one of these interest-only things that *assume* continued
bubble-type growth so you can refi later, that kind of mortgage - and
I'm assuming nothing down and 6K seller help to cover closing costs -
would get a house like this in my neighborhood:

      http://www.zillow.com/HomeDetails.htm?zprop=9771869

That is actually a really nice place.  500 sq ft bigger than mine but
the lot is slightly smaller.

If he was planning on staying put for 4-5 years, it might be worth
it.  This is a college town, so if he had 3 other roommates going to
school here, he could really make out.

I would have had to have been a lot more interested in fiscal
responsibility and less interested in beer, as Jordan puts it, to make
such a decision at 18.

Sure there is a nefarious side to the bank's offer in that they are
after his business.  But an ethical mortgage provider is no worse than
an ethical landlord.

A member of my family is in this business and she often does
mortgages for people in their late teens, early 20s, but they are more
like $90K row homes versus $200K+ 4 BR homes in the college town.

I understand why many on this list reject home ownership because of
the notion of private property ownership, but a lot of working class
people seem to want to be home owners.

My lending bank is way less of an asshole to me than my landlords
were.  The bank's worst offense is trying to convince me I should
borrow more money from them.  After being told "even though it is 105
degrees and extremely humid, A/C is not considered a priority system
to repair" and "someone will come within the week to exterminate the
wasps that are living in the vents and coming in to your apartment
each day", I'll take the bank.

I fucking hated renting.  How is a mortgage any more oppressive than a
lease agreement?  Mine required 90 days notice of *NOT* renewing and
you could only leave when a lease expired.  I gave them 60 days notice
I was moving out and they told me I was *NOT ALLOWED* since it wasn't
90 days and my lease wasn't expired yet.

I said "fuck you, assholes, sue me" and dropped the keys on the office
manager's desk.  They didn't.


Matt

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