3 ms·

And how do you expect to afford a loan if you don't have money to put aside?! The trick is you need to live somewhere. If you can't have a loan, the money goes

by narag 12y ago

And how do you expect to afford a loan if you don't have money to put aside?! The trick is you need to live somewhere. If you can't have a loan, the money goes to rent.

JoshTriplett 12y ago
> The trick is you need to live somewhere. If you can't have a loan, the money goes to rent. The difference is that a landlord wants a tenant who can actually pay the rent, but banks often hand out loans that are far more than the new homeowner can afford. If a tenant can't pay their rent, the landlord will have to go through a long and painful process to remove them and find another tenant, and they'll likely be out many months of rent in the process, with nothing to show for it. If the bank doesn't get their money, they own the house, they get paid whatever costs they can't recover by PMI (which the former owner had to pay for), and they can potentially offer a loan to the next sucker to buy that same house.
- acdha 12y ago
  > The difference is that a landlord wants a tenant who can actually pay the rent, but banks often hand out loans that are far more than the new homeowner can afford. That's actually pretty rare – and the problem wasn't the load but the fact that the banks which engaged in those practices for a historically brief period of time were allowed to shift the cost to other people. I've applied for mortgages three times – 1998, 2008 and 2011. In 1998 and 2011, everyone did their due diligence correct. In 2008, the credit union and the New England regional bank both behaved responsibly while Bank of America simply confirmed my employer and pre-approved me for loan over 3 times higher than I was asking for. Guess the only one of those three which had any problems whatsoever with loans? The other two had default rates which didn't significantly change throughout the crisis.
- fengb 12y ago
  The homebuyer can simply buy a smaller home and extract the difference between paying mortgage and renting.
- narag 12y ago
  The difference is that a landlord wants a tenant who can actually pay the rent... The thread has drifted in a non-sequitur way (or maybe I misinterpreted your comment). They were talking about saving money vs getting a loan. My comment was from the buyer's POV: you can't save for a house because you need the money to pay rent.

by narag 12y ago

And how do you expect to afford a loan if you don't have money to put aside?! The trick is you need to live somewhere. If you can't have a loan, the money goes to rent.

JoshTriplett 12y ago

> The trick is you need to live somewhere. If you can't have a loan, the money goes to rent. The difference is that a landlord wants a tenant who can actually pay the rent, but banks often hand out loans that are far more than the new homeowner can afford. If a tenant can't pay their rent, the landlord will have to go through a long and painful process to remove them and find another tenant, and they'll likely be out many months of rent in the process, with nothing to show for it. If the bank doesn't get their money, they own the house, they get paid whatever costs they can't recover by PMI (which the former owner had to pay for), and they can potentially offer a loan to the next sucker to buy that same house.

acdha 12y ago
> The difference is that a landlord wants a tenant who can actually pay the rent, but banks often hand out loans that are far more than the new homeowner can afford. That's actually pretty rare – and the problem wasn't the load but the fact that the banks which engaged in those practices for a historically brief period of time were allowed to shift the cost to other people. I've applied for mortgages three times – 1998, 2008 and 2011. In 1998 and 2011, everyone did their due diligence correct. In 2008, the credit union and the New England regional bank both behaved responsibly while Bank of America simply confirmed my employer and pre-approved me for loan over 3 times higher than I was asking for. Guess the only one of those three which had any problems whatsoever with loans? The other two had default rates which didn't significantly change throughout the crisis.
fengb 12y ago
The homebuyer can simply buy a smaller home and extract the difference between paying mortgage and renting.
narag 12y ago
The difference is that a landlord wants a tenant who can actually pay the rent... The thread has drifted in a non-sequitur way (or maybe I misinterpreted your comment). They were talking about saving money vs getting a loan. My comment was from the buyer's POV: you can't save for a house because you need the money to pay rent.