Late stage capitalism demands that you will own nothing.
Comment on Bank Workers, Rejoice!
Makeitstop@lemmy.world 18 hours ago
Average age of a first time homebuyer is now over 40. Even at a reasonable interest rate, most buyers would die before they actually own the house.
iAmTheTot@sh.itjust.works 18 hours ago
UltraGiGaGigantic@lemmy.ml 1 hour ago
For now… until they want you to have less. For fun this time.
partial_accumen@lemmy.world 18 hours ago
I know someone living in the Netherlands (home of Lemmy.world!) that told me they had interest only mortgages that didn’t pay toward the principal and that this was common over there. It seems like these new 50 year mortgages in the USA are a step going that same way. Anyone from that area confirm this?
KoboldCoterie@pawb.social 18 hours ago
At that point, the bank is buying the house, they’re just renting it to you for a very cheap rate. The “purchase” is just you entering into a long-term rental agreement.
Fredselfish@lemmy.world 18 hours ago
Without the benefit of renting. Hell don’t forget home insurance.
faintwhenfree@lemmus.org 18 hours ago
There is still some optionality like maybe you get a windfall from a boomer dying and you can pay the principal. Or in 30 years your currency devalues to the point you can afford the principal.
Anyway it all feels like fool’s hope. Situation is fucked.
partial_accumen@lemmy.world 15 hours ago
It an overall bad deal in my mind, but there are some upsides (not enough for me to take it). Assuming you get a fixed rate, you lock in your payment and your “rent”/mortgage will decline over time just from inflation eating away at it. I think most folks would love to have their rent decline by 3% every year. This effectively does that.
Additionally, if you are the homeowner instead of the renter, if the real estate increases in value, when you sell, you pocket the increase. There’s nothing like that in renting.
nonagonOrc@lemmy.world 18 hours ago
I’m Dutch, just bought a home, and I’ve never heard of that. I personally don’t buy that story.
partial_accumen@lemmy.world 16 hours ago
Congratulations on your new home!
Thanks for providing that info on the “afloasingsvrije” mortgages. It was a few years before 2008 when she bought, so that tracks with what you’re reporting.
Here in the USA we have fixed rate mortgages, where you have a single fixed interest rate for the entire length of the mortgage, but I know that not all countries have that. From what I understand in Canada the rates fluctuate during the mortgage where you can get something like fixed for 5 years (maybe 10?) but then the rate can increase on the existing mortgage you’ve already got.
How does the Dutch system work? Fixed for life of mortgage? Continuously variable? Fixed for a time like Canada? Something else?
nonagonOrc@lemmy.world 15 hours ago
We have different types of mortages, but most (maybe all, at least the most common types) have a fixed rate over 30 years. Maybe variable rates exist, but they are at least very uncommon. Shorter mortages are also possible I think but are of course very expensive.
One weird thing we have is that part of the interest you pay is tax deductible. (Progressive parties are i.m.o. rightfully trying to abolish this subsidy for the owning class, but I digress.) for this reason there is a type of mortage where you first only pay the interest, and slowly start paying off more and more of the mortage, which means your net mortage fee slowly increases over time, which is nice if you expect your income to increase over those decades.
AtariDump@lemmy.world 8 hours ago
Screw .world
partial_accumen@lemmy.world 8 hours ago
you…realize thats not only where this Lemmy Community is…but also your user account, right?
gergolippai@lemmy.world 15 hours ago
Dutchie here, nope. We are paying both principal and interest. Plus when i to it out, my mortgage was 102% of my home’s value. And as it stands, the bank owns my ass exactly until I retire 🤷♂️
ivanafterall@lemmy.world 14 hours ago
At least someone wants to pay for your ass. I can’t give this thing away.
boonhet@sopuli.xyz 12 hours ago
I hear ass is pretty easy to give away. Much harder to get ass, especially if you’re choosy about the gender of the ass owner.
greygore@lemmy.world 18 hours ago
Not sure if this is what they were talking about, but balloon mortgages are a thing here too. I can’t ever imagine considering one, but they exist.
partial_accumen@lemmy.world 15 hours ago
Balloon mortgages would be good in only two situations:
- you’re not planning on living in the house very long, so you likely exit before the balloon payments hit.
- you believe interest rates will decline in the next few years and you can refinance to a fixed low rate
I don’t ever see myself using a Balloon mortgage. Worse, they are frequently sold via predetory lending methods. Unsavvy buyers are convinced to take a balloon mortgage not understanding the payments will rise dramatically in the years ahead. This can lead to eventual foreclosure when the owners can service the higher payments.
greygore@lemmy.world 12 hours ago
If you’re not planning to live there long, I don’t think you shouldn’t be buying; that’s one of the few times I’d choose to rent. I guess maybe if home prices are rising then you can accrue some equity, but then you risk buying at the top of the market. I genuinely how it would compare to a fixed rate mortgage though.
If you think interest rates are going to decline, you can easily refinance a fixed rate mortgage as well. I don’t see any benefit in that scenario, but there’s a downside in that if rates don’t go down you still have that balloon payment to worry about, and if you don’t qualify for a traditional mortgage, you’re really in a bind.
Maybe if you’re flipping a house it makes sense, especially if you want to minimize cash outflow. Otherwise, there are so many more downsides that are much more severe than the mild upsides that you might gain. Perhaps there’s a few niche applications that I haven’t considered though.
ivanafterall@lemmy.world 14 hours ago
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
partial_accumen@lemmy.world 14 hours ago
How would that work, even on paper? Not being a dick, just don’t understand. So it’s literally just, “you can never own this property fully?”
Yes. The tradeoff is you have a property that is in your name (with a bank note attached), and if the property increases in value during the time you own it, when you sell, you pocket the difference. If you have a fixed interest rate, it also caps the growth of your payment for housing for the entire time you live there. There’s quite a bit of value in that.
Korhaka@sopuli.xyz 13 hours ago
UK has even worse, buy to let. Interest only with the intent of renting it out. So you profit on the rents and profit on the house going up in value. Obviously you vote for governments that will lead to an increase in house prices too. Oh yeah most of government is made up of
parasiteslandlords too.ivanafterall@lemmy.world 13 hours ago
Sorry, my brain is struggling. How is this different from the U.S., for example? Isn’t it the same? If you buy, the only way to make money is to improve or rent out to someone even more desperate…?
MystikIncarnate@lemmy.ca 15 hours ago
The year I turned 40, was the year I moved into my first non-rental property.
I’m living proof that shit is fucked up
TastyWheat@lemmy.world 6 hours ago
I’m a couple of years older and JUST escaped renting. It’s ridiculous!
ivanafterall@lemmy.world 14 hours ago
I’m turning 40 in a few days. I finally moved into a crazy beat-up fixer-upper/possible crime scene about 3 weeks ago.
Diplomjodler3@lemmy.world 18 hours ago
And then their kids keep paying until they die and still haven’t paid it off, even though they’ll have paid twice the original amount by that point. Whoever came up with this bullshit is probably right now buying their third yacht from the bonus.
gibmiser@lemmy.world 17 hours ago
30 year mortgage means you pay for the house twice with interest. 50 year mortgage means paying for the house 3x.
Fredselfish@lemmy.world 18 hours ago
So basically you won’t own shit.
MystikIncarnate@lemmy.ca 15 hours ago
Never did.
DioramaOfShit@lemmy.world 18 hours ago
As intended
kautau@lemmy.world 18 hours ago
Can’t pass it on to your kids when the bank forcloses on it
UltraGiGaGigantic@lemmy.ml 1 hour ago
I really thought medical bills would solve that problem.
Rooster326@programming.dev 18 hours ago
Were not enough boomers taking them up in reverse mortgages?
Because that’s where all my “generational” wealth went. “We can’t take it with us Jimmy” though we did, in fact, take it from those who came before.