• TheDubz87@lemmy.world
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    6 months ago

    It’s a vicious pinch, rent rates going up preventing you from saving while housing rates (and minimum down-payment if you want a decent monthly mortgage/interest rate) are going up at the same time. My wife and I got lucky and we own our townhouse, but half of the properties vacated in our neighborhood either through eviction or owners moving out have all been turned into rental properties owned by a corp. It’s fucked up, they want noone to own anything anymore so they can get richer through obscene rent hikes every year… And we live in MD. I can’t even imagine trying to survive in NY or any other big city.

  • givesomefucks@lemmy.world
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    6 months ago

    Moreover, mortgage rates have remained high by historical standards. A 30-year fixed-rate mortgage now carries an average 7.22% borrowing rate, the highest since late November 2023, according to Freddie Mac.

    Why would lenders want a paltry 7% mortgage when they can gets 22+% on credit cards people have no options but to use?

    Or inflated student loan debt that can never be discharged?

    Reign I the shitty lending practices, and lenders will want to compete for stuff like mortgages again like they used to.

    7% is too high for a mortgage for people to afford, but anything compared to student loans and credit cards is going to be less attractive to lenders.

    • Ghostalmedia@lemmy.world
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      6 months ago

      Short answer for why banks like home loans is because they’re a long and, unless you’re doing that shady 2008 sub prime shit, a very safe revenue stream. In order to get a home loan, a bank runs a very detailed financial risk assessment on all your assets and they have an assessed asset that they can sell if you foreclose. Mortgages can also be securitized and used to sell mortgage backed securities.

      • givesomefucks@lemmy.world
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        6 months ago

        Short answer for why banks like home loans is because they’re a long and, unless you’re doing that shady 2008 sub prime shit, a very safe revenue stream

        Sure

        If not comparing them to student loans…

        Running all that background on mortgages isn’t a positive to them, it means fewer mortgages.

        Meanwhile they can give any 18/19 year old tens of thousands of dollars that they’ll make double off interest.

        And nothing except death makes them dischargeable. Even if the loan is never paid back, their return probably beats mortgages because the interest keeps racking up.

        • Ghostalmedia@lemmy.world
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          6 months ago

          nothing except death makes them dischargeable

          There are other reasons why a discharge can occur. Disability, school closure, fraud, etc. Moreover, there are other way to get out of total or partial loan repayment. For example, student loan cancellation and forgiveness. There has been over $160 billion in student loan debt relief during this administration in the US.

          By my point is, mortgages are great for banks. They are steady stream of boring and predictable revenue that they don’t need to think much about.

          Also, in the USA, outstanding student loan debt is about $1.7T, credit card debt is $1.1T, while outstanding mortgage debt is about $20T.

          If you start to look into the national debt stats and the annual reports for the big banks, it will become very clear why mortgages are still a very very popular product.

          • givesomefucks@lemmy.world
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            6 months ago

            Yeah, but those are paid off…

            The borrower doesn’t pay, but the person forgiving it does.

            So from the loaners point of view they just lose out of future interest in return for an upfront payment. That can then be used to invest in more debt. It’s not that bad of a deal long term.

    • jordanlund@lemmy.world
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      6 months ago

      7% IF YOU’RE LUCKY.

      My wife wrecked my car in October, so I took the insurance money and started car shopping. Even putting 2/3rds down with an 800 credit rating I was seeing rates of 9 to 11% O_O

      Ended up swinging a cash deal, but Jesus, the poor folks who can’t get that…

    • Omgboom@lemmy.zip
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      6 months ago

      The rates would be tolerable if the home prices weren’t 2-10x what they were in 2019.

    • Ghostalmedia@lemmy.world
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      6 months ago

      Cutting this out of my comment a few levels down since it probably contextualized things better for folks.

      —-

      In the USA, outstanding student loan debt is about $1.7T, credit card debt is $1.1T, while outstanding mortgage debt is about $20T

      • givesomefucks@lemmy.world
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        6 months ago

        It’s not about gross loan, it’s about interest and time to repayment together giving return on investment.

        Investment in mortgages has a very slow response time as well because they’re 30 years out. The recent skyrocketing of home prices also inflated it.

        But why would they want to maybe beat interest? Especially when there’s an asset involved, with a highly inflated price.

        This isn’t a simple thing, but if you’re going to look at one thing look at rate of change over the last decade or two of those numbers.

    • disguy_ovahea@lemmy.world
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      6 months ago

      Please, for the sake of Pete, do not carry a sizable balance on a 22% card. Find another lender with a free balance transfer and 0% interest, transfer, pay down the principal, and repeat.

      • givesomefucks@lemmy.world
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        6 months ago

        That’s the standard rate…

        Those 0% turn into like 22% after the first uear. And while I have no recent experience I think they’ve started paying attention to balance transfer to keep no interest.

        The absolute lowest “best” cards are still high teens.

        https://www.forbes.com/advisor/credit-cards/best/low-interest/

        If someone is carrying a balance (you should never do that) then you either need to abuse balance transfer grace periods or sack up and get a real loan from a bank. Although right now that would probably still suck.

        I don’t know why everytime I talk about how ridiculous credit card interest is, someone who doesn’t know how bad it is tells me that it’s actually better.

        But it happens every fucking time

        • disguy_ovahea@lemmy.world
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          6 months ago

          Right. I don’t carry balances either, but we’re talking workarounds. Loans are ideal if you have collateral. No argument there. Otherwise I’m suggesting opening a new card with 0% into APR, transfer, and pay down the principal over the interest free period. The slight ding to your credit from opening a new card will be offset by the greater credit to debt ratio and bounce back in 4-6 months.

          • givesomefucks@lemmy.world
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            6 months ago

            Otherwise I’m suggesting opening a new card with 0% into APR, transfer, and pay down the principal over the interest free period.

            And you can do that…

            But in the terms and agreements there’s stuff about abusing it by continuously bouncing it around.

            Has been for at least 20 years. They used to not care, but like I just said I believe some do now.

            Like cellphones used to have a deal when you brought a line over so people always switched. So cell phones started denying people if they saw the number always bounced.

            Credit card companies can see the paper trail. If they wanted to, they could go after people if the same money came back to one of their cards.

            And those are usually closer to 30% than 22%, and they can wait till month 11 and charge 30% compound back to when you transfered the money in.

            I didn’t want to type all that, so I just said:

            And while I have no recent experience I think they’ve started paying attention to balance transfer to keep no interest.

            Hoping that would get the point across…

            • disguy_ovahea@lemmy.world
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              6 months ago

              I didn’t realize by paying attention you meant implementing penalization. I follow now. So yes, in that case you’re right. The better option would certainly be a loan.

  • Artaca@lemdro.id
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    6 months ago

    Lived in NYC and every time rent rose to where I couldn’t afford it, I would have to blow my savings relocating. A few years ago I instead used the money to gtfo of the state entirely. Love that city but god damn if it isn’t a huge trap.