It’s a vicious pinch, rent rates going up preventing you from saving while housing rates (and minimum down-payment if you want a decent monthly mortgage/interest rate) are going up at the same time. My wife and I got lucky and we own our townhouse, but half of the properties vacated in our neighborhood either through eviction or owners moving out have all been turned into rental properties owned by a corp. It’s fucked up, they want noone to own anything anymore so they can get richer through obscene rent hikes every year… And we live in MD. I can’t even imagine trying to survive in NY or any other big city.
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Short answer for why banks like home loans is because they’re a long and, unless you’re doing that shady 2008 sub prime shit, a very safe revenue stream. In order to get a home loan, a bank runs a very detailed financial risk assessment on all your assets and they have an assessed asset that they can sell if you foreclose. Mortgages can also be securitized and used to sell mortgage backed securities.
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nothing except death makes them dischargeable
There are other reasons why a discharge can occur. Disability, school closure, fraud, etc. Moreover, there are other way to get out of total or partial loan repayment. For example, student loan cancellation and forgiveness. There has been over $160 billion in student loan debt relief during this administration in the US.
By my point is, mortgages are great for banks. They are steady stream of boring and predictable revenue that they don’t need to think much about.
Also, in the USA, outstanding student loan debt is about $1.7T, credit card debt is $1.1T, while outstanding mortgage debt is about $20T.
If you start to look into the national debt stats and the annual reports for the big banks, it will become very clear why mortgages are still a very very popular product.
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7% IF YOU’RE LUCKY.
My wife wrecked my car in October, so I took the insurance money and started car shopping. Even putting 2/3rds down with an 800 credit rating I was seeing rates of 9 to 11% O_O
Ended up swinging a cash deal, but Jesus, the poor folks who can’t get that…
The hell? Was this through your bank?
Something doesn’t sound right. I got 2.49% in 2022 through Toyota, my bank would have done 2.9%I take that all back, TFS is crazy. My bank is still low though
This may come as a shock to you, but it’s no longer 2022.
You are… correct. TFS is crazy. My bank is still 2.9% though.
The rates would be tolerable if the home prices weren’t 2-10x what they were in 2019.
Cutting this out of my comment a few levels down since it probably contextualized things better for folks.
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In the USA, outstanding student loan debt is about $1.7T, credit card debt is $1.1T, while outstanding mortgage debt is about $20T
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Please, for the sake of Pete, do not carry a sizable balance on a 22% card. Find another lender with a free balance transfer and 0% interest, transfer, pay down the principal, and repeat.
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Right. I don’t carry balances either, but we’re talking workarounds. Loans are ideal if you have collateral. No argument there. Otherwise I’m suggesting opening a new card with 0% into APR, transfer, and pay down the principal over the interest free period. The slight ding to your credit from opening a new card will be offset by the greater credit to debt ratio and bounce back in 4-6 months.
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I didn’t realize by paying attention you meant implementing penalization. I follow now. So yes, in that case you’re right. The better option would certainly be a loan.
Lived in NYC and every time rent rose to where I couldn’t afford it, I would have to blow my savings relocating. A few years ago I instead used the money to gtfo of the state entirely. Love that city but god damn if it isn’t a huge trap.
