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me: junior/medium sw developer in Belgrade, Serbia. I'm saving around 25% per month, or 15% if i buy something new for myself. I don't know what a mortgage is b

me: junior/medium sw developer in Belgrade, Serbia. I'm saving around 25% per month, or 15% if i buy something new for myself. I don't know what a mortgage is but I guess it's a loan for buying a place to live, which would probably dry out all my savings I guess. My expenses are: around 20% to rent, 10% for electricity, water, internet, phone and training expenses combined, 40% for food and 10% just get lost somewhere without a trace :) There are jobs with greater salary, but I'm suggesting a medium perspective in the region of eastern Europe. I used to have a job in a smaller city which left me with 0% savings, and I had to live without internet for that, it's just the way it is/was, I'm just glad it's getting better for some cities and young engineers.

twunde 11y ago
Correct, a mortgage is a loan with a house/apartment as collateral. It's often taken out to finance the buying of a home but if you already own a house can be taken out for other reasons (paying for college or financing a business). You generally have a number of years to pay it off (15-30 I think)
- gorankami 11y ago
  Thanks for clearing that, it is exactly what I thought it was. But still, I am curious: how do you solve the problem when you got only a house that your parents own but its price its close to nothing, due to bad location? Basically, you don't have much to guarantee for the mortgage. How do people that get from low into middle class solve that? Save for decades until you have enough? I am clueless of the options...
  - axaxs 11y ago
    You don't have to have much or any collateral really to begin with. The house you are purchasing becomes the collateral. So you don't have to put up a previous house to get a new house. Essentially, you find a house you like. Let's say it costs $100,000 USD. You go to a bank and tell them you want a loan for this amount with which to purchase the house. This is where it gets a little muddy - depending on the loan type, some want 3% down, some 10% down, etc etc. My most recent loan was 0% down, but a higher interest rate. The reason that lenders are willing to do this is two-fold. Firstly, if you don't pay, they will take the house back. So they generally make sure the house is worth equal to or more than the loan amount - hence why many want a down payment - so that the loan amount is less than the purchase price, in case they have to take it back and resell it. Secondly, they stand to make much interest over time. You can run the numbers, but that $100,000 house you'll end up paying 50-60,000 or more in interest over the course of the loan. Hope this helps.
    - gorankami 11y ago
      It helps a lot, very informational, thanks!

twunde 11y ago

Correct, a mortgage is a loan with a house/apartment as collateral. It's often taken out to finance the buying of a home but if you already own a house can be taken out for other reasons (paying for college or financing a business). You generally have a number of years to pay it off (15-30 I think)

gorankami 11y ago
Thanks for clearing that, it is exactly what I thought it was. But still, I am curious: how do you solve the problem when you got only a house that your parents own but its price its close to nothing, due to bad location? Basically, you don't have much to guarantee for the mortgage. How do people that get from low into middle class solve that? Save for decades until you have enough? I am clueless of the options...
- axaxs 11y ago
  You don't have to have much or any collateral really to begin with. The house you are purchasing becomes the collateral. So you don't have to put up a previous house to get a new house. Essentially, you find a house you like. Let's say it costs $100,000 USD. You go to a bank and tell them you want a loan for this amount with which to purchase the house. This is where it gets a little muddy - depending on the loan type, some want 3% down, some 10% down, etc etc. My most recent loan was 0% down, but a higher interest rate. The reason that lenders are willing to do this is two-fold. Firstly, if you don't pay, they will take the house back. So they generally make sure the house is worth equal to or more than the loan amount - hence why many want a down payment - so that the loan amount is less than the purchase price, in case they have to take it back and resell it. Secondly, they stand to make much interest over time. You can run the numbers, but that $100,000 house you'll end up paying 50-60,000 or more in interest over the course of the loan. Hope this helps.
  - gorankami 11y ago
    It helps a lot, very informational, thanks!