Frugal | Maybe they can’t afford a mortgage

Maybe they can’t afford a mortgage

Posted by Lynnae on August 21, 2007

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I was listening to the news last night, when I heard a story about the sub-prime mortgage meltdown. The gist of the story was that banks are tightening their lending standards, and first time home buyers are having a hard time qualifying for a mortgage.

The cited the case of a person with bad credit being unable to obtain a mortgage. They also said that people starting out in their careers couldn’t qualify for mortgages, because banks were unwilling to give them 100% financing. They gave an example of a young man who made $100,000 a year before his bonus (closer to $150,000 after his bonus) who couldn’t get a mortgage because he had no down payment.

Here’s a question. If a man makes $100,000 a year, how long could it possibly take to save up a down payment, so he could qualify for the mortgage? Cut expenses for a couple of years. Certainly if my family of four can survive on less than $50,000 a year, a single man could save a nice chunk of money over the course of a year.

I couldn’t believe the news station’s spin on the story. Oh the poor home buyer! Trust me, that potential home buyer is much better off cleaning up his credit and saving a down payment the old fashioned way, than having his home foreclosed upon because he can’t afford his ARM payment.

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5 Responses to “Maybe they can’t afford a mortgage”

  1. boomeyers on August 21st, 2007 9:23 am

    Wow! I couldn’t agree more! If that single guy lived like a college student, he could probably pay CASH for a house in a few years! It is time for a reality check for all the people who received “creative financing” for thier homes!

  2. Heidi on August 21st, 2007 11:33 am

    I agree. Someone who makes 150,000 dollars a year should be able to save at least 50,000 a year.

    I’m really tired of all the stories about the poor people who can’t afford stuff. BUDGET! Don’t buy everything you see.

  3. the baglady on August 21st, 2007 5:18 pm

    The credit industry is just very funny to me. A lot of young people also have problems getting funded for just being young. Younger people have shorter credit histories so the income doesn’t even matter.

  4. Lynnae on August 21st, 2007 5:45 pm

    That’s messed up too. If a person has good credit and has the tenacity to save a down payment, he should be able to get a mortgage. Being able to save a down payment, especially in today’s society, would show to me that the applicant was worth taking a chance on with a mortgage.

  5. debtfretter on August 22nd, 2007 2:55 am

    Yeah I agree. While I think it can be hard to get into the market for many, I do find it interesting how so many people want to have a home NOW, as well as have all the good stuff in life like big TVs and holidays. ALso, people want to live in a nicer house than their parents have, even if they are only 25 years old. Saving for a downpayment gets you ready for what is to come when you have a mortgage.

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