I agree with that. The bank told me what kind of mortgage they’d approve me for and I responded, “that sounds really irresponsible.” It seemed like something they should hear, lol. I think the loan I ended up with with was 20% of the big number he threw out. I wasn’t interested in becoming house poor.
You mentioned 80% of their monthly income, that’s generally gross as well. They always ask for gross and then pretend taxes and other stuff don’t come out of the check before someone gets it. It seems like they should be asking what someone’s net pay is. To make the payment on a house they were talking about I’d be stopping my 401k, cancelling my health insurance, and would still be having trouble putting food on the table… and I’d be doing that for 30 years, praying I never lost my job or had to take a pay cut. I think their view is people are going to pay their mortgage before any other bill they have, so they can eat it all up and people can just deal with it. I thought after 2008 they wouldn’t be like that anymore, but they are.
I’ve always been a saver and naturally wanted a bit of a financial buffer. I guess I assume everyone has that or should have it, but that’s probably a bad assumption on my part. I remember even when my parents gave me a little allowance growing up (it wasn’t a lot, we got our age per month from probably age 10 until around 16 when we could work), I never remember running out and spending it, I saved. My sister, who grew up in the same house with the same parents spent everything she got. I can only assume we got very similar financial education and modeling up until that point in life. I remember when she was 17 or 18, she got an $80 ticket for running a red light and borrowed money from me, her little brother, to pay for it so she didn’t have to tell the parents about it.
I agree with that. The bank told me what kind of mortgage they’d approve me for and I responded, “that sounds really irresponsible.” It seemed like something they should hear, lol. I think the loan I ended up with with was 20% of the big number he threw out. I wasn’t interested in becoming house poor.
You mentioned 80% of their monthly income, that’s generally gross as well. They always ask for gross and then pretend taxes and other stuff don’t come out of the check before someone gets it. It seems like they should be asking what someone’s net pay is. To make the payment on a house they were talking about I’d be stopping my 401k, cancelling my health insurance, and would still be having trouble putting food on the table… and I’d be doing that for 30 years, praying I never lost my job or had to take a pay cut. I think their view is people are going to pay their mortgage before any other bill they have, so they can eat it all up and people can just deal with it. I thought after 2008 they wouldn’t be like that anymore, but they are.
I’ve always been a saver and naturally wanted a bit of a financial buffer. I guess I assume everyone has that or should have it, but that’s probably a bad assumption on my part. I remember even when my parents gave me a little allowance growing up (it wasn’t a lot, we got our age per month from probably age 10 until around 16 when we could work), I never remember running out and spending it, I saved. My sister, who grew up in the same house with the same parents spent everything she got. I can only assume we got very similar financial education and modeling up until that point in life. I remember when she was 17 or 18, she got an $80 ticket for running a red light and borrowed money from me, her little brother, to pay for it so she didn’t have to tell the parents about it.
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