Mortgage Qualification Calculator

[nj593]

So I was bored trying to see how people were affording these 300k + homes when they only make 30k maybe 45k combined in households by me.
Do you know according to a Mortgage Qualification Calculator it states that a 300k home the individual should be making atleast 90k a year. Yet the monthly payments for that 300k home at 5% is only around 1600 a month.
Thats insane! two things I see wrong with this.
First, this means that the price drops on the homes have to continue and have to stay there in order for normal people to ever afford them.
Two, the people that bought these homes have to be relieved of these make believe prices in order to clear them of such debt.
The problem i see though is that investors are buying these homes dirt cheap now and turning around and placing them right back on the market at the make believe prices. So how is anyone ever going to afford these inflated home prices if the system doesnt change?
Many of you might argue this point. But simple math shows already that in an emergency people couldnt afford the homes first time around. Something has to change starting with greed.
Or they need to lower the salary cap needed to purchase these 300k homes because the 1600 a month is easy but the 90k a year is harder :>)

[P00057870]

The problem with the $300,000 home may not be the Principle & Interest payment but all the other expenses that come with owning your own home. The cost of upkeep, insurance, taxes, other miscellaneous repairs, etc.

The problem is more about our expectations. Depending on which part of the country you live in a $300,000 home is a modest, middle-class dwelling. In other parts of the country that will buy a mini-mansion.

Seems there are many things that have to be "adjusted", doesn't it?

[Lindagerr]

If so it must be FAR south. Where I live in Hunterdon county if you made $90K combined for a family of 4 you were just at the point where you could probably pay all your monthly bills. Even now I think you would be hard pressed to find a home for under $200K and when you add in really high taxes you need a two person income to survive. The problem is as I think of my friends and neighbors fewer and fewer of them have 2 incomes still. Since the "recession" hit some are lucky if they even have one income.

As far as I know the income required for a mortgage has been raised lately. I know when my daughter and her husband bought their home 4 years ago they were allowed to have just 5% down and get a mortgage where they were only paying the interest for the first few years. They have since refinanced several times and are on the verge of losing the home. I never liked that type of mortgage, but it was not my decision. The fact that so many people got into way to much debt because it was given to them so easy means that now we are bailing them out so they can stay in the big houses, and we can't afford to stay in our little ones.

I don't want to start another debate, but I feel older americans who know how to live within our means are having a hard time now because we would be disgraced to claim bankruptcy and we are being taxed to death and put out of jobs so the younger generation can have their dream.

[nj593]

I don't want to start another debate, but I feel older americans who know how to live within our means are having a hard time now because we would be disgraced to claim bankruptcy and we are being taxed to death and put out of jobs so the younger generation can have their dream.

There is something I like about the older generation which you stated. I heard what you said from another gentleman at the barber shop a little bit ago. He stated that the new generation "mine" has no disgrace when it comes to bankruptcy. He stated, in his time this would be a humiliation for himself and his family and would be a taboo and no one in the community would know. You have to respect the old school way of thinking. Atleast I do !

[P00057870]

To those of us who are older it is still a disgrace! My tax accountant has told my husband and I to file bankruptcy a couple of times. We have had extreme health costs over a few years--to make a long story short. We were raised that if we had received a service, we owed the debt to pay for it as long as we could work and try to pay for it.

We also "saved up" before buying things we wanted and, here's a novel idea, we did not spend money we did not have.

I know many young people who constantly overdraft their checking account or credit card and just say but I needed such and such....it may just be a new pair of shoes or a 6-pack of beer. The reality is they did not need the beer and they have another 5 or 6 pairs of shoes in the closet.

The generation before me, those who lived through the depression and war(s), lived in times when they only had one pair of shoes and those had been worn until there were no soles in the shoes and they had to put cardboard cutouts inside. Once things improved, they then were rewarded with some of the most economically good times this country has ever seen. Now we seem to be sliding again but the difference is that we have generations who feel as though they have done without if they cannot go out and buy the latest large-screen, high-definition TV or a $200 cell phone, even if they have a simpler version that still works.

Yes, some adjustments need to be made. People need to learn again where to spend their time and money. People matter more than things, and time spent with people mean much more than the things that steal our time from those who deserve our attention.

[alleycat]

Bankruptcy was created so people who are having trouble can get relief from the courts. No more debtors prison. Now in this economic hard times I am sure many people are greatful to be able to have the protection of bankruptcy courts. Many people have to use this to protect what they have left. Houses ect ect. Without this mortage companies and who ever else could prey upon the consumer. Now there are many different chapters of bankruptcy that someone can file. It all depends what the person problems are and what the best remedy is. Is bankruptcy embarrassing? Maybe for some, but I have seen many people be able to get a new lease on life because they were able to protect themselves during a very difficult time. If you take a look filings are at an all time high. I do not believe all of these people went out and racked up thousands of dollars on credits cards and spent money like crazy just to be able to file. Many people have lost jobs, health issues, divorce, ect. you name it and it can happen to anyone, at anytime.

We really should not judge those who have had to file bankruptcy. I think in many cases it save peoples lives. Honestly saves people that actually cannot find a solution for their money problems. If you all take a look that the number of people killing themselves has increased dramatically, due to the burden of these economic hard times. Hard working, tax paying adults. Taking their own lives because they lost their job, or their retirement account lost all of its money, a spouse dies and you are left with 1 retirement check and they just cannot make it any longer. They are to proud to seek other alternatives. These people would still be with us today. So the sooner we all accept that bankruptcy was placed within our system help people and stop judging people that have had to use this form of protection the better off we will all be.

[nj593]

I agree Allison with you but I also understand the poster prior. The problem with bankruptcy is that it was abused. This is why they changed the laws to bankruptcy and now it is much harder to file. Case in point lets look at the famous Donald Trump. The man has filed over 4 bankruptcy's if im not mistaken over the past 30 years. He does this to avoid paying large sums of money yet, creditors tend to keep giving him money. I wonder what he will do now that there is no money to give out?

Bankruptcy was created so people who are having trouble can get relief from the courts. No more debtors prison. Now in this economic hard times I am sure many people are greatful to be able to have the protection of bankruptcy courts. Many people have to use this to protect what they have left. Houses ect ect. Without this mortage companies and who ever else could prey upon the consumer. Now there are many different chapters of bankruptcy that someone can file. It all depends what the person problems are and what the best remedy is. Is bankruptcy embracing, maybe for some but I have seen many people be able to get a new lease on life because they were able to protect themselves during a very difficult time. If you take a look filings are at an all time high. I do not believe all of these people went out and racked up thousands of dollars on credits cards and spent money like crazy just to be able to file. Many people have lost jobs, health issues, divorce, ect. you name it and it can happen to anyone, at anytime.

We really should not judge that have to file bankruptcy. I think in many cases it save peoples lives. Honestly saves people that actually cannot find a solution for their money problems. If you all take a look that the number of people killing themselves has increased dramatically, due to the burden of these economic hard times. Hard working, tax paying adults. Taking their own lives because they lost their job, or their retirement account lost all of its money, a spouse dies and you are left with 1 retirement check and they just cannot make it any longer. They are to proud to seek other alternatives. These people would still be with us today. So the sooner we all accept that bankruptcy was placed within our system help people and stop judging people that have had to use this form of protection the better off we will all be.

[Lindagerr]

I did not mean to infer that everyone who applies for bankruptcy is crooked. Actually I had good friends who had to file years ago because a business partner Scr*wed them over. I was letting out my frustration, some of it at my son-in-law. He is upset that he might either lose the house and/or have to lose his fancy gas guzzling car with all the bells and whistles. He (and my daughter) had plenty of money that he inherited. They could have put it in the bank and had a nest egg for old age. Instead they lived it up and spent it all. Now they expect "The government" to bail them out.

PHEW!! I feel better now that I got that out.

So I know there are hard working people out there that would like nothing better then to be able to pay their bills.

I hate to say it again, but I feel a lot of those under 40 people(not all) just don't have the same sense of waiting until you can afford something and living within your means.

Maybe I am just getting old or it could be of my neighbors those over 45 are either retired or layed off. Everyone under 45 somehow still has a job.

Signed the grouchy old lady:p

[alleycat]

I agree Allison with you but I also understand the poster prior. The problem with bankruptcy is that it was abused. This is why they changed the laws to bankruptcy and now it is much harder to file. Case in point lets look at the famous Donald Trump. The man has filed over 4 bankruptcy's if im not mistaken over the past 30 years. He does this to avoid paying large sums of money yet, creditors tend to keep giving him money. I wonder what he will do now that there is no money to give out?

I do not know if Mr Trump filed personal bankruptcy or if he filed to protect his businesses. I think it was for his businesses. Look at the car companies, airlines, and other large businesses that had to go into bankruptcy protection. Without this many business and people would fold. People would not have jobs and they would not be able to protect any assets that they might have. Bankruptcy was placed into our system to protect. Can it be abused? Yes it can. When you are in a bankruptcy and you are being held accountable to a trustee, and a judge you really do not want to have any false documents. Not being honest to a judge is not a good look!

The easy part for these people is finally filing a bankruptcy. The hard part is the stigma people cast upon people that actually need to go into bankruptcy protect.

[alleycat]

I did not mean to infer that everyone who applies for bankruptcy is crooked. Actually I had good friends who had to file years ago because a business partner Scr*wed them over. I was letting out my frustration, some of it at my son-in-law. He is upset that he might either lose the house and/or have to lose his fancy gas guzzling car with all the bells and whistles. He (and my daughter) had plenty of money that he inherited. They could have put it in the bank and had a nest egg for old age. Instead they lived it up and spent it all. Now they expect "The government" to bail them out.

PHEW!! I feel better now that I got that out.

So I know there are hard working people out there that would like nothing better then to be able to pay their bills.

I hate to say it again, but I feel a lot of those under 40 people(not all) just don't have the same sense of waiting until you can afford something and living within your means.

Maybe I am just getting old or it could be of my neighbors those over 45 are either retired or layed off. Everyone under 45 somehow still has a job.

Signed the grouchy old lady:p

This is just a very hard time for many of us. What doesn't kill us will hopefully make us stronger.

People that can not manage there money will learn so on there own what will happen next. They will not have anything left.

I think education is key to helping people live better lives. Everyone should have finance classes, along with business classes so people can understand how things run and they can make better decisions.