So…while I admit that I don’t know much about Chicago, I can safely say that I would NOT choose to buy the house I cited for you. You seem willing to move into one. How about I find you a house here that’s super affordable and I’ll have a realtor contact you to move in. My first house was built and cost under $100k. Today that house, which provided a style of living that I wanted is $300k. I couldn’t afford to pay that on what I was making before I retired
So, no car debt, no student loan debt, etc.?
Where are the people that can’t afford to buy a home living right now?
Could you afford this one?
I’ll admit I don’t know the Kansas City metropolitan area, is this neighborhood a crap hole?
I edited that post using the guidelines from your PDF and change the house price to $210,000 instead of $250,000.
It would actually be closer to $120,000 to $180,000
In my example the buyer had a $30k down payment. I’ve always heard not to spend more than 3 times your gross income.
I guess some people will never be a homeowner and rent until they die, which great for landlords. A tenant paying $1,500 a month over 30 years is over half a million dollars.
I remember when we bought our first house and they had these "how much house can I afford thing. But the did NOT take into account utilities and groceries in the calcuation. They did include car loans to calculate monthly expenses. But I don’t understand why they excluded utilities. I don’t know, maybe the government forced them to in order to allow low income minorities to qualify for a loan.
One thing that helped us is we had people tell us that whatever the bank says you can afford, drop about 30% off of that.
Another thing is we had a super honest (and super intelligent) mortgage broker, who would not do anything unethical.
When we got the loan for our current home the mortgage lady said we were approved to buy a $650,000 house, me and my wife looked at each other and laughed. We were having the house built and the total price was $325,0000, we put $225,000 down and only needed to borrow $100k. She said I’d be surprised at how many people would have bought the $650k home after hearing they were approved for that much. We paid off that loan in 11 years, I wonder how much I’d still owe if we bought the $650k home.
We bought our house when mortgage rates were 11%, thus keeping the sales price “afforrdable” We had 20% down. Kind of funny though…when interest rates came down, making houses more “affordable”, the prices shot up. And when the interest rates got nice and low is when they started offering “80/20” loans…they basically loaned 100% but loaned you the money for a 20% down payment. But that came about after years of house prices going up and up and up, so the thinking was that it will appreciate so much that the bank would have some equity if the borrowers defaulted. The other funny thing is that loans like that were not considered subprime.,
Reading the replies here I think I have my answer. The build to rent model will be the future for a lot of people who want the big house in a great neighborhood and aren’t willing to start in a smaller house in a less desirable neighborhood. But if they’re fine with never owning that’s their decision.
I’ll take that to mean that you would not hesitate to invest in your future and buy that house in West Garfield Park. Or is this one of those things that is easy to say from the comfort of your upscale neighborhood, but something you might turn down if you were just starting out.
Take it as if people expect an upscale neighborhood as their first home and can’t afford it they’ll be renting for their entire life, which is their choice. People who are willing to lower their expectations until they can afford their forever home will have an asset worth hundreds of thousands of dollars when they’re older. If I could only afford a crappy house in a crappy neighborhood that’s what I would do until I could afford something better.
I am so tempted to help you buy that place in West Garfield Park and give it to you as an investment. You’d only have to live in it 6 months. Which I truly doubt you would. As I said, it’s easy to say you would from an upscale home in the burbs. I’ll be the first to tell you that I’d pass on one of the affordable homes you find in Overland Park. I value my safety and the safety of my family. You don’t. Honestly, I don’t believe you would either. You just say you would yo make you feel superior to others.
Lol… That’s a generous offer but I already have a place to live. You should give that money to your daughter to use for a down payment on a home for her.
The bottom line is people can buy a less desirable home they can afford and buy their forever home when they can afford it or rent and try to save for the home they want. Hedge funds buying up homes are hoping they rent forever.
Nobody is arguing against that.
What is being said, and the math shows, is that it is harder to do that today than it was 20 years ago.
That depends, it’s difficult for someone making $12 a hour flipping burgers but easier for a young couple with each earning $50,000 a year. I know several young couples that live with their parents to save money before getting married for their down payment.
It is easier to buy a house the more money you make!!
And in other news, water is wet.
True. Not everyone is going to be able to buy a great house in a great neighborhood.
Nobody is arguing that.
What is being stated (with math to back it up) is that it is harder to buy a starter house now than it was 20 years ago.