Hear about how much debt everyone in the US has all the time, curious about some of your stories!
My bad debt is 10k left on a school loan from a for profit school that is now out of business.
Only other debt is house.
So how are you all doing with debt management?
Fuckin debt free 😎
Own my car 😎
College educated 😎
Gainfully employed 😎
Making more than the average household in my state, solo 😎
So is my gf 😎
Still cannot afford a house 😢
Same, but without the SO to help.
New head canon, this is a government conspiracy to push polygamy. I will need at least two wives and three husbands to afford a house.
Jokes on them my girlfriend’s a stay at home mom, polyamory ain’t doing shit for our financials
You need to maximize your financial potential. Get 5 husbands, why assume that 25% lower income per wife?
I’m in the exact same boat, to the letter. It’s been great watching interest rates and inflation eliminate 60% of my home buying power in the last year.
You know what’s neat?
In 2008 the economy tanked because the banks had made a habit of cough approving mortgages that they knew people couldn’t afford in the long run. Then they auctioned off those subprime mortgages to smaller banks, and played hot potato until oopsie, economic depression.
If we’re in this boat, who the fuck is buying a home, who approved their loan, and how the fuck is 2008 not right around the corner again?
Good thing we bailed them out.
There’s no subprime market ready to collapse. This isn’t a housing bubble. The increase in prices is partially demand and partially inflationary imo.
Interest rates will keep prices level but we aren’t going to see a crash cuz all those companies are cash flush after the ppp fraud and rental Rates skyrocketing. The only houses on the market are ppl who have to sell or ppl who died.
No one wants to jump out of a 3.2% mtg and into an 8% one
I think the interest rate has a lot to do with the declining value of commercial real estate. I think the banks are trying to cover losses. Small businesses going fully remote makes it difficult to sling commercial real estate at the old rates.
I think this is also behind the odd fetish of returning to the office we read so much about.
Thankfully, we are not at risk of another 2008 housing crash at this time - or at least not for the same reason.
The extremely (almost irresponsibly) abridged version of the 2008 subprime mortgage crisis is that banks were giving out loans to people who could not afford to pay them.
The similarly simplified version of what’s going on today is that people cannot afford to take a mortgage and aren’t getting them. Back in the bad old days loan officers would have given out the mortgages anyway to boost their numbers and the bank would have bundled that loan with others to hide it and started the game of hot potato. That isn’t what’s happening today.
That’s not to say a market crash the size of the '08/'09 crash won’t happen, or won’t happen soon, or won’t be caused by the housing market. It’s just that the circumstances that triggered the 2008 crash aren’t present today.
The extremely (almost irresponsibly) abridged version of the 2008 subprime mortgage crisis is that banks were giving out loans to people who could not afford to pay them.
This is the comparison I’m drawing, because it’s what is happening again.
A 200K home mortgage isnroughly 2000/mo. It’s not doable for median income, and the .median house price is like 380k right now. The math doesn’t check out.
Yes. Today you’ll hear people online talking about how mortgages are unaffordable. If they somehow decided to apply anyway the bank would reject them.
The difference between now and the years leading up to the 2008 crash is that loan officers would have given people those mortgages despite the payments not being doable as you said.
A lot of banks were offering variable rate mortgages that had lower interest for the first few years of the loan and advertised this lower monthly payments. This would get applicants in the door. When they asked about the later interest increases (that would bump the monthly payments higher than they’d be able to afford) they were assured that they’d be able to refinance their debt.
This and other shady sales practices are not happening today largely because federal regulations and oversight placed after the fact.
The TL;DR is that the math on mortgages doesn’t check out for a lot of people. In the early 2000s banks were more than happy to give you a mortgage anyway. That simply isn’t happening right now.
That simply isn’t happening right now
It is, though. People are buying homes who cannot afford them all over the US right now. It’s not as though home buying has ceased with the interest rates.
Can you provide a reputable source that large numbers of people are taking mortgages they’re likely to default on?
I have not heard any reporting saying that is happening. I do, however have a family member who works in banking and interfaces with federal regulators that enforce the laws passed to prevent future subprime mortgage crises.
I have a meme for you: https://lemmy.world/post/6902250
I looked at a 400k home that literally had standing water in the basement at the time of the showing.
That would cost me and my gf a solid ~4k/month for 30 years with a 20% down payment.
Bank profits over $1M
If it’s not murder house in middle of nowhere, it’s out of budget.
Like tiny homes are becoming a thing… but like smallest legal home lots are 250k in most cities. Feels like middle of nowhere is only place to be.
Wtf that’s fucked up
The American Dream is dead.
The American Caste System is based on land ownership.
Lol looking at some of the debt ledgers in here, I bet you “can”
Oh, I “can”. I just know that $4000/mo is not what we can “afford”. We’d sooner squeeze into her apartment for $1000/mo and not be responsible for anything.
I mentioned in this thread somewhere that I believe we’re in for another 2008 collapse. If I cannot afford a mortgage who the fuck is signing those papers? Same uneducated buyers and predatory lenders as in 2003-2008. I predict a collapse starting this time next year based on I’m high and I just woke up.
dude same
I live in the Midwest region of the United States.
$55k in student loan debt, down from $100k eight years ago. $10k auto loan. $210k on the mortgage, which I honestly can’t believe I was ever approved for. No credit card debt.
There have been some very scary moments, but I’ve somehow managed to keep my head more-or-less above water so far.
I’m almost 3k behind because my parents forced me into choosing college or the military at 18. I wasn’t remotely ready for either (was dealing with extreme gender dysphoria at the time) and I’m deeply opposed to the army but sometimes I wish I had chosen otherwise -I don’t know if I’m ever fixing this. All my cash goes to survival and everything I own is constantly breaking. Poverty is a vicious, vicious cycle…
Oh that is so hard to hear!
It’s crazy that parents are still forcing kids to go to college when it’s been documented a billion times how often people are getting no benefit but tons of debt.
Small promotion for !personalfinance@lemmy.ml, the community is usually quite helpful
The top post is “salary needed to buy a home” is just depressing. But great call out.
Financially, none. Morally? So much.
Por que no los dos?
Seattle Washington area
10k in credit cards
110k in loans
430k mortgage
20k car loan
Credit cards are a little high but that’s just because I just took a vacation to Japan. I feel like I’m in a good place otherwise. I was lucky enough to buy my house before the pandemic when interest rates were super low and prices hadn’t yet spiked so I’m hoping to sell it in a few years when the interest comes back down. My loans are 50k I took out of my 401k as a down payment on house, 35k for a heloc to fix the house, and 20k on a personal loan.
Oh that sounds stressful. Hopefully things work out as that feels like a lot.
$27K in cc debt. Disgusting. Been dialing it in the last many months and paying off $2-3K a month.
OTOH, I may have my house paid off soon, so I got that going for me.
Honestly at that point it might be worth mortgaging the home all over again just to get rid of that debt. Even at that admirable pace and taking today’s higher mortgage interest rates you’d probably end up saving $2000
None.
I have made it a point to live a debt free life as much as possible. My only debt is my mortgage. I’ve had a couple of car loans in the past, but nowadays not even that. I have quite enough wheels; If I buy another vehicle it’ll be with cash. If I can’t do that, I don’t need it right now. (2 cars, 1 truck, 7 motorcycles. It’s going to be a cold day in hell before my ass is out of transportation options.)
Bad, as a % of annual gross pay is about 25% of one year’s pay. Mostly the deficit accrued from when my ex was not working. It’s smaller than it was, but not by much. But moving in the right direction at least.
Plus mortgage on the house and a separate loan for the roof we had put on when we bought it.
Hey man as long as it’s getting smaller, it’ll be gone eventually!
A car loan for a completely unnecessary car.
Can we afford it? Yes, with reasonable budgeting, no sacrifices needed.
Will the car appreciate? Undeniably.
Do we need a toy like this? Fuck no.
Did it anyway. I’ve been poor for such a long time it’s really hard to justify any frivolous purchase at all, but we have good jobs now. I waffle between “This is stupid” and “I’ll never get to do this again, so why not now?” Literally YOLO.
The rest of debt is “good”, like the mortgage building equity, a CC to keep credit rating good (paid off monthly).
But cars don’t appreciate in value…
Good on you with everything else and I’m with you 100%, but as soon as you drove that car off the lot it’s been deprecating in value.
Yes they do.
You just have to pick the right car, and it’s not gonna be an off-the-shelf regular car.
If you look at all the cars that have ever existed 99/100 times that car is deprecating.
Yes, OP may have bought a classic car or something with high resale value. I was simply speaking in generalizations. The vast majority of cars depreciate in value once you drive them off the lot.
TBF you made generalizations that a) they don’t appreciate, and b) my car’s value depreciated off the lot directly to the initial statement I made that the car I purchased would appreciate.
I can assure you that these statements are incorrect in regards to my purchase. If you want to walk back your statements to not be in reference to my initial position, who were you talking to then?
I have a 1964 Lincoln Continental convertible. Cars can appreciate, I assure you.
Historically speaking they don’t. I understand there are outliers for sure.
You can’t leave a comment like that and not tell the car bois what you got.
You bought a literal racecar? Hell yeah dude. Live your best life.
Hah, too old for that risky stuff. Hitting a wall at a buck twenty doesn’t sound like fun. Yeah, they absolutely are race cars, but they are built to be street legal as well. That’s the direction I’m in.
That’s awesome man. Hope it brings smiles for a long time.
Thanks!
I mean if it can be paid off with fun money and doesn’t ruin retirement plans, not the end of the world if the interest rate was good!
Got a ~3% rate a couple years ago, so not bad.
Only a mortgage.
I had student loans, but I finished paying those ~5-6 years ago.
I’m genuinely curious, what’s your opinion on broad reaching student loan forgiveness? If it happened tomorrow, would you be upset that you had payed yours off?
Not that guy, but basically the same situation. I’d be thrilled. Not having to think about those every month has been amazing. I want everyone to feel that way, even if I have to pay more in taxes to cover it.
Ditto. I’m the same as OP. Paid off student loans in 2019 and now I just have a mortgage. Let’s forgive everyone’s loans plz.
There’s no point in getting spiteful in life, be happy for other people
Debt free, own two paid off cars old enough to be cheap but new enough that the maintenance isn’t too bad, and also they get good milage. We don’t own a truck or an SUV. We rent, cook at home 90% of the time, and we’re only just making it.
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Often times, that’s the best we can do.
ITT: few people having any clue what the difference is between good and bad debt, or that debt is basically essential to creating wealth.
I’m just enthralled at the idea of how normalized having negative money has become. Something something dystopian
I mean most people saying they don’t have any bad debt, but saying they have good debt isn’t too bad! It is interesting to know how much mortgage people are carrying.
But these days even mortgages feel bad. 400k at 7% is 28k of just interest. So houses feel way out of reach with current prices/rates.
If rates go down prices go up. So doesn’t feel like there is much winning for non home owners.
Not sure if you mean per year but mortgages are generally going to be over much longer time periods. A couple who I know are looking to buy somewhere new and are looking at getting £400k mortgage or thereabouts. With rates as they are now, and over 25 years, they’ll end up paying back £900k!
7% per year yes.
28k per year in interest on just a normal home is crazy.
With how much they push for 25+ years mortgages you’re going to pay way more than 78k for a 400k one.
Housing prices, like everything, is determined by supply/demand. Interest rates are only part of the equation.
The main reason housing is high right now is because of the supply side, and that’s low at the moment because COVID destroyed the global labor market and the supply chain, so materials are sky-high, with fewer people to do the work of building.
Also, as the stock market tanks people move their money into safer places, like cash or property, hurting the supply side even more. This is what cashed up Boomers are doing (yep, we can keep blaming them).
Housing prices won’t come down until supply outweighs demand.
Wealth is not created, it is taken.
You literally create wealth at your job.
actually, I am unstable and an incredible liability. If anything, I am a wealth-shrinking entity, like the common household Offshore Tax Shelter. Beware my economic hoodoo.
Like £25k for a photography degree from 15 years ago. I moved to the US and paid bits of it back (it’s means tested so you just tell them what you earn and they base it on that). I’ve been ignoring their letters because idk, I don’t really want to pay it back? I remember the mandatory classes where we applied for ucas, so I feel like it’s on them for shoving 18 year olds through the loan system for profit.
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I had pretty substantial CC debt about a year ago. Nearing $14k. After health issues, having to move, replace many belongings, car repairs, etc. Used a 401k loan to pay off 10k of it, and since that loan was paid off (it was over $800 a month) I’ve paid the rest down under $3k, and should hopefully have it paid off by either year end or spring at the latest. Currently it’s sitting in 0% APR though, so it’s at least not eating away with interest.
Smooth moves!
Super good job on getting that under control.
