40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’
40-year-old homeowner says economy doesn’t add up: ‘I’m making the most money I’ve ever made, and I’m still living paycheck to paycheck’
'I’m making the most money I've ever made, and I’m still living paycheck to paycheck'
“There's this wild disconnect between what people are experiencing and what economists are experiencing,” says Nikki Cimino, a recruiter in Denver.
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"I just made the most expensive purchase of my life and I can't figure out why I am living paycheck to paycheck."
Why would buying a house have you living cheque to cheque? Do you think you buy something on credit and then all your income gets taken until it's paid back? I'm genuinely confused about what you're trying to say, here.
Also, it's not like she's paying for her mortgage in addition to whatever she was doing previously (presumably rent). The mortgage payment replaces your rent payment.
She's paying like 17-18% on credit card debt that she didn't pay off because she saved a down payment. This is just financial illiteracy
True but there is also the added expense of maintaining the property and having a rainy day fund for emergencies related to homeownership.
It kind of does, though. She look out a mortgage and those have a monthly cost.
What OP is probably saying is that if you have a certain income level and then you choose to take on a debt that you're going to have trouble paying back, that's mistake that you made and should have seen coming. This wasn't an unforseen medical bill, the person in the article could have chosen to buy a cheaper condo or rented until rates were more favorable.
She also really should have finished paying off that CC debt and delayed the down payment; that's just a killer and is almost certainly at 3 or 4 times the interest rate of her mortgage, which incidentally could have been a bit lower if her debt-to-income ratio were better. Shit sucks, but somebody who's doing okay and fucks it up gets less sympathy from me than people who would do anything to be living paycheck to paycheck with a steady income and home ownership.
Also gotta love how many of these people remember Trump fondly because he was president WHILE THE GOVERNMENT WAS CUTTING THEM CHECKS! That's absolutely not gonna be his plan in round two.
What OP is probably saying is that if you have a certain income level and then you choose to take on a debt that you’re going to have trouble paying back, that’s mistake that you made and should have seen coming
If that's what they'd said, I wouldn't take issue with it. Of course a person has to do the maths, buying a home isn't a light decision. But the size of the purchase isn't at all related to living cheque to cheque, which was in the words they chose.
If I borrow a half million from the bank, I have to pay it back in monthly installments, commonly known as a mortage. Those costs are now added to your regular expenses.
Most rents are cheaper than mortages. So taking on a giant purchase + the cost of the mortage is a huge financial cost. Yes, she gets an asset (which she could sell at any point) but it's going to be more expensive.
A quick look at Denver apartments for rent confirms this, a lot of 1 bedrooms available for between $400 and $500 cheaper a month.
Most rents are cheaper than mortages.
Yeah because rental properties are often shitholes and it skews the numbers
For the same exact property, rent is absolutely more expensive than a mortgage. Rent is usually paying for someone's mortgage for them, why would they make it lower? Who are these generous landlords?
Yeah because rental properties are often shitholes and it skews the numbers
Sure but my point is that this lady has made an extremely expensive purchase and now continues to pay for it.
Most rents are cheaper than mortages.
Yeah because rental properties are often shitholes and it skews the numbers
Rent is usually paying for someone's mortgage for them, why would they make it lower? Who are these generous landlords?
Ahhh, there's the misunderstanding. Local/single owner rentals are actually a small proportion of tenancies. Most are large organizations which have purchased a large building etc. It's actually a kind of fascinating issue but worth reading about!
Most rents are cheaper than mortgages
Laughs in Canadian
I'm an Ohioan and Zillow says my house would rent for about $600/mo more than my mortgage is (which includes property tax).
You are surprisingly comfortable condescending to people when you're incredibly wrong and clearly have no idea how any of this works.
- A mortgage doesn't get added to your expenses, a mortgage replaces some of them. Specifically, it replaces rent, most peoples' largest expense;
- Mortgage payments repay some interest and the rest goes straight into equity;
- If your home gains market value, you don't pay more mortgage, but you do get more equity;
- A fixed rate mortgage means your housing costs stay the same for the term of the mortgage.
Seriously, if you're in the US you can get a fixed rate mortgage for a term of 30 years. There's literally no way to lose that one. Rates go up? Haha fuck my bank I pay the same mortgage. Rates go down? Haha fuck my bank I refinance so now I pay less even if rates go back up again.
Buying property as soon as I was able was one of the best decisions I've ever made, and I was not able to buy it particularly early. My head hurts a little bit whenever I think about how much money I've burned on rent in my life. And that phrasing is deliberate, I may as well have set the money on fucking fire for all the future good it bought me.
Edit: By the way:
Yes, she gets an asset (which she could sell at any point) but it’s going to be more expensive.
It's going to be more expensive than what? Renting it? If someone rents something, they don't get an asset. You only get assets when you buy them, because they have to be legally yours to call them an asset. So no, buying isn't a more expensive way to get the same asset. It's the only way to make it your asset.