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Covering a mortgage payment each month is much more feasible than purchasing a house for most. The real issue is saving for the down payment and having good eno
by antasvara 4y ago
Covering a mortgage payment each month is much more feasible than purchasing a house for most. The real issue is saving for the down payment and having good enough credit to get approved for a loan.
There's a considerable difference between the loan payment with a big down payment and good credit versus bad credit and a low down payment. That difference can essentially turn an unaffordable home purchase into an "affordable" monthly rent.
- osigurdson 4y agoYour thesis is a large number of people are right at the inflection point between being able to afford mortgage payments but cannot qualify for a mortgage. I don’t mean to sound harsh but this seems like a highly unlikely explanation.
- antasvara 4y agoMy thesis is that there are a lot of people that either can't qualify for a mortgage, can't save up enough money for a reasonable down payment, qualify for a mortgage that they can't reasonably afford, etc. On a 300k house, the difference between 5% and 20% down results in around a 400 dollar difference per month in a mortgage payment. That can be a pretty big difference maker for a lot of families. 5% down on a house like that is also 15k. That's a significant amount of money to save for a lot of families. There are other relevant factors here as well, but this is certainly a significant one.