“There’s this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
“I just made the most expensive purchase of my life and I can’t figure out why I am living paycheck to paycheck.”
Why would buying a house have you living cheque to cheque? Do you think you buy something on credit and then all your income gets taken until it’s paid back? I’m genuinely confused about what you’re trying to say, here.
Also, it’s not like she’s paying for her mortgage in addition to whatever she was doing previously (presumably rent). The mortgage payment replaces your rent payment.
It kind of does, though. She look out a mortgage and those have a monthly cost.
What OP is probably saying is that if you have a certain income level and then you choose to take on a debt that you’re going to have trouble paying back, that’s mistake that you made and should have seen coming. This wasn’t an unforseen medical bill, the person in the article could have chosen to buy a cheaper condo or rented until rates were more favorable.
She also really should have finished paying off that CC debt and delayed the down payment; that’s just a killer and is almost certainly at 3 or 4 times the interest rate of her mortgage, which incidentally could have been a bit lower if her debt-to-income ratio were better. Shit sucks, but somebody who’s doing okay and fucks it up gets less sympathy from me than people who would do anything to be living paycheck to paycheck with a steady income and home ownership.
Also gotta love how many of these people remember Trump fondly because he was president WHILE THE GOVERNMENT WAS CUTTING THEM CHECKS! That’s absolutely not gonna be his plan in round two.
What OP is probably saying is that if you have a certain income level and then you choose to take on a debt that you’re going to have trouble paying back, that’s mistake that you made and should have seen coming
If that’s what they’d said, I wouldn’t take issue with it. Of course a person has to do the maths, buying a home isn’t a light decision. But the size of the purchase isn’t at all related to living cheque to cheque, which was in the words they chose.
Probably because she bought more house than she could afford, and prioritized that over paying off get credit cards.
Right, so then, her issue wasn’t the size of the purchase, is that she didn’t do the maths beforehand to make sure it was a good idea.
So why are you trying to insist that the problem is the amount of money spent, rather than this lady not doing the maths?
If I borrow a half million from the bank, I have to pay it back in monthly installments, commonly known as a mortage. Those costs are now added to your regular expenses.
Most rents are cheaper than mortages. So taking on a giant purchase + the cost of the mortage is a huge financial cost. Yes, she gets an asset (which she could sell at any point) but it’s going to be more expensive.
A quick look at Denver apartments for rent confirms this, a lot of 1 bedrooms available for between $400 and $500 cheaper a month.
You are surprisingly comfortable condescending to people when you’re incredibly wrong and clearly have no idea how any of this works.
- A mortgage doesn’t get added to your expenses, a mortgage replaces some of them. Specifically, it replaces rent, most peoples’ largest expense;
- Mortgage payments repay some interest and the rest goes straight into equity;
- If your home gains market value, you don’t pay more mortgage, but you do get more equity;
- A fixed rate mortgage means your housing costs stay the same for the term of the mortgage.
Seriously, if you’re in the US you can get a fixed rate mortgage for a term of 30 years. There’s literally no way to lose that one. Rates go up? Haha fuck my bank I pay the same mortgage. Rates go down? Haha fuck my bank I refinance so now I pay less even if rates go back up again.
Buying property as soon as I was able was one of the best decisions I’ve ever made, and I was not able to buy it particularly early. My head hurts a little bit whenever I think about how much money I’ve burned on rent in my life. And that phrasing is deliberate, I may as well have set the money on fucking fire for all the future good it bought me.
Edit: By the way:
Yes, she gets an asset (which she could sell at any point) but it’s going to be more expensive.
It’s going to be more expensive than what? Renting it? If someone rents something, they don’t get an asset. You only get assets when you buy them, because they have to be legally yours to call them an asset. So no, buying isn’t a more expensive way to get the same asset. It’s the only way to make it your asset.
Most rents are cheaper than mortages.
Yeah because rental properties are often shitholes and it skews the numbers
For the same exact property, rent is absolutely more expensive than a mortgage. Rent is usually paying for someone’s mortgage for them, why would they make it lower? Who are these generous landlords?
To be fair, they don’t actually own their house if they’re paying a mortgage.
It wouldn’t be any different if she was renting.
I’m not sure why they call her a homeowner when the bank actually owns her house.
