[quote=patientrenter][quote=justsayin1964]…You are correct if you are speaking to people who purchased above thier means.[/quote]
I can’t afford a Ferrari. I have enough money to buy one, but I can’t afford it. It sounds like what I mean when I say “can’t afford” is the same as what you mean when you say “above one’s means”.
I have more sympathy for someone who bought at the top of the market using only their own money than people who did the same thing using only other people’s money. But buying a home for more than 3x income at the height of the largest RE bubble in recorded history is worse than dumb in my books – it is irresponsible.[/quote]
Exactly.
It’s getting old hearing people say that the falling value of their house is somehow responsible for them not being able to afford it. WTF?
Being able to “afford” it means that you are able to pay the mortgage as agreed all the way to the end, when it is paid off. In this calculation, people should account for the possibility of extended unemployment, sickness, losing an income/increased expenses (as with adding new kids and mom/dad stays home), divorce, death of the primary earner, etc.
Maybe I’m too conservative, but everyone seemed to be thinking only of the upside: their incomes will always go up, interest rates will always go down, housing prices will always go up, they will never experience divorce, death, unemployment, or other difficulties, etc.
Seriously, if people were putting 0-10% down (mind you, at least 6% is wiped out in selling costs, alone), and if they were agreeing to 35%+ DTI ratios, and if they were not setting aside a significant amount to tide them over during difficult times, then I would call that irresponsible.
I agree that some people might be *innocent* (didn’t intend to become deadbeats, etc.), but being “innocent” does not mean they were being prudent or responsible.
