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Loan officer: I’m seeing middle class homebuyers take on $7,000 mortgages thinking they can ‘always refinance when rates come down in the future’
Fortune Magazine ^ | 07/19/2023 | Lance Lambert

Posted on 07/20/2023 5:56:19 AM PDT by millenial4freedom

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To: ChildOfThe60s

To top that off, many percentage rates are raised because “...it has been (insert number) of years since last rate hike”. Ridiculous 🤯

They say this As if tax percentages are supposed to be raised ever so many number of years!
And people believe it!!!!!
🤬🤬🤬🤬🤬🤬


61 posted on 07/20/2023 7:00:00 AM PDT by TianaHighrider (God moved David to STAND UP to Goliath ❣)
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To: millenial4freedom

‘always refinance when rates come down in the future’

Problem with that is rates run in 40 year cycles. 1940 to 1980 rates went up. From 1980 to 2020 they went down. Now they are headed up probably until 2060.


62 posted on 07/20/2023 7:00:16 AM PDT by Tom Tetroxide
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To: Tom Tetroxide

Win-win, amirite?…


63 posted on 07/20/2023 7:01:12 AM PDT by EEGator
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To: millenial4freedom
Sounds ominous, except that a 5%-6% interest/mortgage rate was historically considered 'the norm' going into the Carter years and 8%-10% was 'the norm' until the GWB real estate crisis that shrank interest/mortgage rates to historically low levels.

1920-34 near 6% mortgage average1
1935-45 just under 4.5% mortgage average1
1960 - 5.1% mortgage average2
1971 - 7.3% mortgage average1
1980 - 13.7% mortgage average2
1981 - 16.6% to 18.45% mortgage average2
1990 - 10.1% mortgage average2
2000 - 8.1% mortgage average2
2010 - 4.7% mortgage average2
2020 - 3.1% mortgage average2

sources:

1Mortgage Rate History: Check Out These Charts from the Early 1900s

2Here's how much home prices have risen since 1950


64 posted on 07/20/2023 7:01:55 AM PDT by TomGuy
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To: millenial4freedom

Northern Va couple they probably believed Obama when he said $250,000 was rich


65 posted on 07/20/2023 7:02:20 AM PDT by personalaccts (Is George W going to protect the border?)
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To: Presbyterian Reporter

I would also add that the Local Governments love to collude with the Real Estate Developers to convert farmland to housing projects.

If an acre of farmland has a tax value of $20,000, then after a Real Estate Developer builds four $500,000 houses on that acre, the Local Government has increased the taxable value from $20,000 to $2,000,000.


66 posted on 07/20/2023 7:02:29 AM PDT by Presbyterian Reporter
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To: ProtectOurFreedom

Just based on my wife’s legal experience, there used to be a social stigma associated with filing bankruptcy, people were ashamed of doing and for the most part had fallen on really hard times often thru no fault of their own.

Today, there is no social stigma, there is an entitlement mentality that I deserve what I have, and a big bank or credit card company can afford me not paying them back.

The other big areas is elderly people who retire with ZERO savings and expect to live on social security alone, all the while taking 10-15 different medications, smoking two packs of cigarettes a day and guzzling down a case a beer every couple of days.


67 posted on 07/20/2023 7:03:12 AM PDT by srmanuel
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To: millenial4freedom

I’m glad I bought my house in the early 2000s because I could never afford it now, nor could I afford any home in my neighborhood. The older ones are being razed and replaced by McMansions going for 900M to 1.7 million.


68 posted on 07/20/2023 7:03:49 AM PDT by peggybac (My will is what I wanted. God's will is what I got.)
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To: srmanuel
The other big areas is elderly people who retire with ZERO savings and expect to live on social security alone, all the while taking 10-15 different medications, smoking two packs of cigarettes a day and guzzling down a case a beer every couple of days.

Amazingly, they are able to make that work somehow.

69 posted on 07/20/2023 7:04:53 AM PDT by SamAdams76 (5,301,904 Truth | 86,921,174 Twitter)
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To: TomGuy

Thanks for the post.


70 posted on 07/20/2023 7:06:18 AM PDT by Presbyterian Reporter
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To: millenial4freedom

Don’t forget propery taxes and insurance.


71 posted on 07/20/2023 7:09:16 AM PDT by dynachrome (War does not determine who is right, but who is left.)
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To: ProtectOurFreedom

My state caps it in the low 20s. I see 21.5% all the time.
the lender then charges ME a “discount” (aka, the dealer is also paying them to take the loan) many times this “discount” is so high I’d be paying the buyer to take the car and I flip the approval in to a decline and print out the decline letter.

while I don’t do it, other dealers do not price their cars, you have to fill out an app and the dealer will tell you what your down payment and payment will be. They hope you don’t ask how much the car is (they will go way way way over book to hide fees charged by the lender and what not) and sign on the dotted line. many of the large bad credit dealership chains actually own the lender too. While a credit union or national bank would never got much over 100-110% of value, when you own the bank 200% is no problem. These buyers are screwed from the get go.

these types of buyers put themselves in the situation they are in. Lately they are the types that have lost a 2020 or newer car to repossession and come to me to “buy” the next car that will be repossessed. When I suggest a cheaper car (some will show up with 2500-3500 bucks) “oh no, I can’t be seen in a old car” or some crap like that.

as long as the deal works for me profit wise, I’ll sell it to them and let the bank deal with the fall out. (some lenders do recourse, I generally decline those deals too) That said, banks are really getting stingy with the low score buyers.


72 posted on 07/20/2023 7:09:59 AM PDT by cableguymn
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To: Presbyterian Reporter

Property taxes, if they should exist at all, should not be based upon the market value (technically the “assessed” value) of the home, they should be based upon the home’s impact on the city, county and state.

For instance, a one bathroom home has less impact upon the water and sewage infrastructure than a 3.5 bath home. So too, a one car carport has less impact that a four car garage. Also,a two bedroom home has less impact on the school system than a five bedroom. Lot square footage affects storm water runoff.

So a 2/1 on the Lake, assessed at a higher value pays more, yet impacts the city, county and state less than a 4/2.5 on a dry lot, which is assessed at a lower value.

The system sucks.

And please don’t get me started on the required dog tag (tax) license. A dog tax fercryinoutloud. I’ll never pay it, though my city once proposed going house to house to enforce the dog tax...er...tag...license, because dog owners weren’t complying.


73 posted on 07/20/2023 7:10:04 AM PDT by SheepWhisperer (Get involved with, or start a home fellowship group. It will be the final church. ACTS 2:42-47)
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To: srmanuel

Shame and social stigma were powerful forces that held society together and kept it functioning. The loss of those has greatly accelerated our race to the bottom, hasn’t it?


74 posted on 07/20/2023 7:10:58 AM PDT by ProtectOurFreedom (We are proles, they are nobility.)
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To: TomGuy

I do not have the time today, but it would be interesting to see these rates next to the ratio of median income to median prices.


75 posted on 07/20/2023 7:12:53 AM PDT by bak3r
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To: Red Badger

Typo...................


I thought so too, but then I read the article. It isn’t.

Nuts.


76 posted on 07/20/2023 7:12:58 AM PDT by Hieronymus
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To: millenial4freedom; All

They’re going to need a ‘Cash for Klunkers’ program, but for houses, in the near future!

I’ve owned a LOT of properties through the years; some I lived in, some we flipped, some we rented out.

So very, VERY glad to be out of that ‘biz’ these days.

Is there ANY part of the economy not ruined in turn by Socialist Democrats? Asking for a friend...


77 posted on 07/20/2023 7:13:20 AM PDT by Diana in Wisconsin (I don't have, 'Hobbies.' I'm developing a robust Post-Apocalyptic skill set. )
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To: cableguymn

“…other dealers do not price their cars, you have to fill out an app and the dealer will tell you what your down payment and payment will be”

Wow. And people don’t ask the price?


78 posted on 07/20/2023 7:14:36 AM PDT by ProtectOurFreedom (We are proles, they are nobility.)
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To: millenial4freedom

We got in under the wire at 2.99% on one refi and one purchase. Just a few weeks later rates were up to 5%.


79 posted on 07/20/2023 7:15:32 AM PDT by JimRed (TERM LIMITS, NOW! Militia to the border! TRUTH is the new HATE SPEECH.)
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To: SamAdams76

I complained about the vast majority of people being financially illiterate, not in a bad way just they don’t know anything.

Regardless of their actual literacy level, one thing most of them know is how to work the system of government welfare.

Plus, they get and then knowingly misuse credit cards. In my wife’s day, you could file bankruptcy every 7 years, many of her clients would file bankruptcy multiple times.

Surprisingly, credit card debt is unsecured, meaning it can be completely wiped out in bankruptcy, the day after successfully filing bankruptcy, people get deluged from the credit card companies for new credit cards, they know for at least 7 years the person can’t file bankruptcy again and they will get some money from them.


80 posted on 07/20/2023 7:16:19 AM PDT by srmanuel
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