21–30 of 72 posts
So much for the US being considered right wing. US residential mortgages represent one of the largest examples of socialism in action anywhere with nary a complaint from either US party.
$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.
They aren't, until they are. Then people have problems.
A $1 million loan on a 30 year term at 3% interest ($4200/mo) is totally different from say 5% (5300/mo) or 8% (7300/mo) interest. It’s strange to me that the principal of the loan is the basis for the policy rather than the monthly payments. If interest rates hit a 30 year high to match our 30 year high in inflation, the share of Americans who can afford a million dollar loan will be a tiny tiny fraction of what it…
If they spike rates to fight inflation, like in the late 70s, buying a house now will be a terrible investment.
That's why it's a lever of power: it can go both ways.
$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.
But even assuming one had 20% down, with a rough tax calculation of 30%, that $140k salary comes out to $98,000 annually post-tax and $8,166 monthly. Which means a person would be paying almost 50% of their income on the mortgage.
That's not a situation I would be comfortable with. If it takes a whole 50% of my post-tax income to fund my home, I'd be terrified of any kind of interruption to my employment (like a personal accident, recession, or pandemic; these things aren't as unlikely as we like to believe). If you mean $140k post-tax I'd be more inclined to see a $1M house as doable
So much for the US being considered right wing. US residential mortgages represent one of the largest examples of socialism in action anywhere with nary a complaint from either US party.
Must be me, but I missed the part of socialism that includes an impossible debt burden to private banks and a massive housing market bubble.
Earlier quoted context omitted.
And they'll be screwed when the market corrects and the value of the home they just bought drops significantly
The market will not be allowed to correct. That was the lesson of 2008. The only endgame here comes after the end of dollar dominance.
$1M is a $4000/m mortgage requiring a $12000/m income or $140k salary. That seems doable for some professions. If you are on the fence of buying a home, right now would be a good time to do it. Because they aren't getting cheaper and with this announcement they will almost certainly rise to meet this new, looser qualification.
I could not downvote this faster. Ridiculous and wrong. Shameful advice. I be curious know your age, income, and net worth to see how out of touch you are. Do not take this advice and debt at this ratio. - take home is gross income not net like taxes or health insurance. It also doesn’t factor in retirement even - mortgage estimate is wrong - does not factor property taxes - Just open an affordability calculator or m…
A $1 million loan on a 30 year term at 3% interest ($4200/mo) is totally different from say 5% (5300/mo) or 8% (7300/mo) interest. It’s strange to me that the principal of the loan is the basis for the policy rather than the monthly payments. If interest rates hit a 30 year high to match our 30 year high in inflation, the share of Americans who can afford a million dollar loan will be a tiny tiny fraction of what it…
If they keep rates low, inflation will explode, and buying a house now will be an excellent investment. If they spike rates to fight inflation, like in the late 70s, buying a house now will be a terrible investment. That's why it's a lever of power: it can go both ways.
A $1 million loan on a 30 year term at 3% interest ($4200/mo) is totally different from say 5% (5300/mo) or 8% (7300/mo) interest. It’s strange to me that the principal of the loan is the basis for the policy rather than the monthly payments. If interest rates hit a 30 year high to match our 30 year high in inflation, the share of Americans who can afford a million dollar loan will be a tiny tiny fraction of what it…
If they keep rates low, inflation will explode, and buying a house now will be an excellent investment. If they spike rates to fight inflation, like in the late 70s, buying a house now will be a terrible investment. That's why it's a lever of power: it can go both ways.
https://www.cbo.gov/publication/56910
https://home.treasury.gov/system/files/221/TreasuryPresentat...
(this is not investing advice, for educational purposes only)
Earlier quoted context omitted.
If they keep rates low, inflation will explode, and buying a house now will be an excellent investment. If they spike rates to fight inflation, like in the late 70s, buying a house now will be a terrible investment. That's why it's a lever of power: it can go both ways.
You assume low interest rate has no negative effect in long run. In 30 years the house may be worth $100M on paper, but is unsalable and in neighbourhood that look like Detroit .