4 ms·

How is that the moral of the story? If anything, the government sponsored entities are artificially lowering interest rates which you can use to borrow, so it m

by bko 7y ago

How is that the moral of the story? If anything, the government sponsored entities are artificially lowering interest rates which you can use to borrow, so it makes sense to take advantage of that cheap credit.

baybal2 7y ago
America, a supposedly a capitalist society. I expected Americans to be at least more finally literate than people from the bloc. Artificially low interest rates may well benefit you to some tiny extent, but imagine just how much more benefit is given to a bank. You still take an enormous risk, staking all your livelihood, and the bank get a near free way to make money. That's not equitable. The prime majority of people have no genuine need to own a home, yet the 100+ years of state+banks instilling the mortgage culture managed to make it look so. It hurts me to see that even intellectuals on HN don't seem to see through that. Every time I raise that, somebody jumps with a calculator to show me "how much I miss out." I am not missing out anything of that, unlike near 2 millions of once well off, middle class Americans who got screwed by "a low risk mortgage"
- deleted 7y ago
  [deleted]
- bko 7y ago
  > You still take an enormous risk, staking all your livelihood, and the bank get a near free way to make money... middle class Americans who got screwed by "a low risk mortgage" How are you staking your livelihood? Mortgages have no recourse apart from your home. Even then the foreclosure process takes anywhere between 1 and 3 years depending on the state and the bank is likely to offer you deferment or a modification so it doesn't have to go through the trouble and expense of foreclosing. The worst that can happen is your credit could be hit, but even that resets after 7 years. And since you seem so anti-debt I don't think you'd miss out on much. The bank treats agency mortgages as quasi risk free paper, so the yields get bid down, so they don't make too much money holding this stuff
  - bradleyjg 7y ago
    > Mortgages have no recourse apart from your home. Only in some states.
- cheerlessbog 7y ago
  > The prime majority of people have no genuine need to own a home Many people, including me, value being able to do anything they want to the property, live in it as long as they want, know how much it will be costing them years into the future, and never have someone enter without their permission even (landlords can legally do this if there's an urgent maintenance problem). In my last rental I could not even paint the living room. They may also appreciate the opportunity to participate in any appreciation.
  - ghaff 7y ago
    Those are really the key things. Buying a condo vs. renting a similar place? Sure, you can run financial calculations--and should--but a lot of factors that go into whether one or the other is the optimum financial decision are unknowable to a greater or lesser degree. Will housing prices go up or down? What will interest rates do? Will you have to turn around and sell the property quickly for reasons? Will maintenance expenses be more than you anticipated? Much bigger are things like stability vs. mobility, being able to change aspects of the property to your liking, and whether you can even rent the sort of property you would like for an extended period. Also "need" is an odd word in this context. I own and do a lot of things that I don't "genuinely need." But I'm happy for them anyway.
  - smileysteve 7y ago
    > and never have someone enter without their permission even (landlords can legally do this if there's an urgent maintenance problem). Have you heard of the police? Maintenance problem, signs of forced entry, sounds of a struggle. Here's hoping none of us get pulled up as the incorrect address next time someone is mad at someone on a video game.
- grogenaut 7y ago
  I'll bite... How is the alternative, renting, better? Constant financial and time risks due to leases and landlords and the money never comes back to you.

by bko 7y ago

baybal2 7y ago

America, a supposedly a capitalist society. I expected Americans to be at least more finally literate than people from the bloc. Artificially low interest rates may well benefit you to some tiny extent, but imagine just how much more benefit is given to a bank. You still take an enormous risk, staking all your livelihood, and the bank get a near free way to make money. That's not equitable. The prime majority of people have no genuine need to own a home, yet the 100+ years of state+banks instilling the mortgage culture managed to make it look so. It hurts me to see that even intellectuals on HN don't seem to see through that. Every time I raise that, somebody jumps with a calculator to show me "how much I miss out." I am not missing out anything of that, unlike near 2 millions of once well off, middle class Americans who got screwed by "a low risk mortgage"

deleted 7y ago
[deleted]
bko 7y ago
> You still take an enormous risk, staking all your livelihood, and the bank get a near free way to make money... middle class Americans who got screwed by "a low risk mortgage" How are you staking your livelihood? Mortgages have no recourse apart from your home. Even then the foreclosure process takes anywhere between 1 and 3 years depending on the state and the bank is likely to offer you deferment or a modification so it doesn't have to go through the trouble and expense of foreclosing. The worst that can happen is your credit could be hit, but even that resets after 7 years. And since you seem so anti-debt I don't think you'd miss out on much. The bank treats agency mortgages as quasi risk free paper, so the yields get bid down, so they don't make too much money holding this stuff
- bradleyjg 7y ago
  > Mortgages have no recourse apart from your home. Only in some states.
cheerlessbog 7y ago
> The prime majority of people have no genuine need to own a home Many people, including me, value being able to do anything they want to the property, live in it as long as they want, know how much it will be costing them years into the future, and never have someone enter without their permission even (landlords can legally do this if there's an urgent maintenance problem). In my last rental I could not even paint the living room. They may also appreciate the opportunity to participate in any appreciation.
- ghaff 7y ago
  Those are really the key things. Buying a condo vs. renting a similar place? Sure, you can run financial calculations--and should--but a lot of factors that go into whether one or the other is the optimum financial decision are unknowable to a greater or lesser degree. Will housing prices go up or down? What will interest rates do? Will you have to turn around and sell the property quickly for reasons? Will maintenance expenses be more than you anticipated? Much bigger are things like stability vs. mobility, being able to change aspects of the property to your liking, and whether you can even rent the sort of property you would like for an extended period. Also "need" is an odd word in this context. I own and do a lot of things that I don't "genuinely need." But I'm happy for them anyway.
- smileysteve 7y ago
  > and never have someone enter without their permission even (landlords can legally do this if there's an urgent maintenance problem). Have you heard of the police? Maintenance problem, signs of forced entry, sounds of a struggle. Here's hoping none of us get pulled up as the incorrect address next time someone is mad at someone on a video game.
grogenaut 7y ago
I'll bite... How is the alternative, renting, better? Constant financial and time risks due to leases and landlords and the money never comes back to you.