JP, stop paying attention to the “median” it’s a meaningless, misleading statistic.
People with median incomes may have no interest in living in a median priced neighborhood.
San Diego is currently in the top 10 of unaffordable cities, based on income and cost of housing ownership.
You shouldn’t have a mortgage for more than 4x-5x your gross income, depending on your other debts.
When you know how to use cash and leverage, you will never be screwed by having money.
Lenders start with your credit score. They put you into a box whether you deserve to be there or not. One late minimum credit card payment (even $20 and an hones mistake) can whack your score 30 or 40 points. Doesn’t make you a bad person, but to FNMA you just became a bigger risk if you score falls below 680.
Realtor commissions are paid by the seller through the selling price. Nobody is getting 5.50% 100% loans today, except for one possible program which may not exist anymore.
You need that down payment, you also need additional financial reserves, and you better hope that you don’t lose your job.
Why does buying a house have to equate to getting ahead ?
It’s not in the Declaration of Independence that people are entitled to afford a house.
In Europe, for generations, people have rented. They have smaller apts/homes, but many have higher standards of living, including education, culture and travel/vacations, and they work less and enjoy life more. They never own a home.
America has been duped by marketing and Wall Street.
Many people have been weaned on propaganda from the govt and the media about what is the right thing to do throughout your life, except you do it with your money, if you have any. The American dream = owning a home ?
That’s MARKETING.
Even homeless people need $5 for Starbucks now, the 50c coffee isn’t good enough anymore. We’ve become a sick society, based upon the greater fool theory.
Why don’t people buy Rolls Royces or fly first class ?
Usually because they can’t afford it; but when people couldn’t really afford to buy houses, they went ahead and bought them anyway, and now there is outrage because they are losing what they never should have bought in the first place, that they cannot afford, and the govt wants to save them ??
We NEED a huge economic correction harder than the 1930’s depression to get the country back on track.
Maybe it will happen, maybe it won’t. Those that are prepared will survive just fine.
Thank the administration for the few good boom years of the decade, there is a price to pay for the excess, corruption and greed, and the average worker will carry afair part of this burden.
Be a happy renter instead of a miserable homeowner until you are ready and can afford what you are comfortable with.
You can borrow more money than is wise for a house as a % of your income. Just because you can get approved for 55%-60% of your gross income for your debts, doesn’t mean that you have to do it.
