what happens if you buy a new house then the bubble bursts?

[Anonymous No.49715953]

[Anonymous No.49715986]

>>49715953
There can't be people this dumb is there?

[Anonymous No.49715998]

>>49715953
You can tell a woman wrote this

[Anonymous No.49716029]

>>49715953
The bank will require more capital/assets to back the loan. It's like a margin call.

[Anonymous No.49716112]

>>49715953

You unironically shouldn't give a shit.
Housing bubbles breaking are always accompanied by rises in interest rates.
Higher rates hurt the average person's buying power a whole lot more than rises in home prices.

You bought a house.
The price of your new house falls dramatically.
Why do you care?
You're not planning to sell a house you just bought, are you?
Your basis is the same.
Your property taxes are now lower.
And you don't have to pay 6% on your mortgage.

[Anonymous No.49716161]

>>49715986
Funny, this question coming from /biz/, of all places. You will live to see mental retardation beyond your comprehension.

[Anonymous No.49716163]

>>49716112
>you're hundreds of thousands of dollars poorer why should you care
This is like the another side of sunken cost fallacy. Sunken cope syndrome

[Anonymous No.49716164]

>>49716112
>hurt the average person's buying power
Unless you buy a foreclosed trap house for 20k

[Anonymous No.49716212]

>>49715953
What if you're building a house and the bubble bursts?

[Anonymous No.49716216]

>>49716112
Idiot. The loan is a mortgage, aka backed by collateral (the house,). If the collateral goes down, the bank wants more security from you aka cash or other assets to back the loan. Thats one of the reason why a lot of people loose their homes in a recession, together with loosing their jobs.

[Anonymous No.49716230]

>>49715953
Trick question and the thread is retarded.
Real Answer: Your house is claimed by NATO and shelled by RUS until it is dust.

[Anonymous No.49716292]

>>49715998
What gave it away? Hotbitch2019?

[Anonymous No.49716333]

>>49716216
Sure would be a shame if some smug banker did this and a father, after watching his children freeze to death, stole a truck, filled the back with boom boom and drove it into the structural supports of the skyscraper that served as the bank's global headquarters, ushering in a new age of darkness.

[Anonymous No.49716335]

>>49716292
Didn't even notice that kek

[Anonymous No.49716340]

>>49715953
This person doesn't understand what the term "closing" means, I assume.

[Anonymous No.49716341]

>>49715953
MY ZESTIMATE!

[Anonymous No.49716349]

>>49716163
On the other hand the monthly mortgage payment could actually be lower, even if the cost was higher, so you arent actually down (however the 500k buy is not going to be able to refi pretty much ever and selling it is going to be really difficult.)

[Anonymous No.49716353]

>>49716216
This is the most retarded thing I've ever read.

Its not a fucking margin call you absolutely retarded gorilla nigger. People got foreclosed on because they couldn't make payments on their mortgage. Nothing changes, your monthly payment remains the same.

Kill yourself.

[Anonymous No.49716427]

>>49716212
you'll likely be able to finish building it cheaper and faster. Bubble burst means builders not building and materials not selling both competing for your favor.

[Anonymous No.49716456]

>>49716427
You'd have still overpaid for the land and any standing contracts but yeah the hit wouldn't be anywhere near as bad

[Anonymous No.49716468]

>>49716353
>bank doesn't do anything about losing its collateral
you are naive

[Anonymous No.49716491]

>>49716353
It becomes messy when there's a divorce and you have to sell the house and still owe the bank on the remaining mortgage.

[Anonymous No.49716520]

>>49716029
Not in the UK. What happens is that when you buy a house, the mortgage you sign-up for will have a good rate for the first few years and then a shit variable rate for the remainder. Normally, you can switch mortgages before the shit rate kicks in. However, if prices fall, reducing your equity, then no-one will give you a mortgage to switch to. You are then left with a worse rate than everyone else *and* the underlying interest rate is probably rising too. You then can't afford to pay and are foreclosed on.

[Anonymous No.49716528]

>>49716353
This. you just don't know what you're talking about. the house (with required insurance) is the only loan maintenance requirement. The value of the house is not important. You could smear shit on the walls, commit murder, invite ghosts, or do anything else to decrease the value of the house and your mortgage isnt going anywhere. What's more, even if the bank could demand the collateral, why the fuck would they want to if the value of the collateral deteriorated so much. They may actually want you to keep paying on a shit loan.

[Anonymous No.49716529]

>>49716353
Well, you are correct but there's one thing you left out. If housing goes down, rates go up, and people have variable rate then that could be a reason why they can't pay and foreclose.

[Anonymous No.49716581]

>>49716468
they won't ask you for additional collateral, but if you would sell a 500k home for 400k and paid 25k on the prinicpal, you'd owe the bank 75k after selling the home. Dunno if banks can force to not sell in case you won't be able to cover that. Keep you prisoner if you will.

[Anonymous No.49716588]

>>49716353
>>49716216
Who is right here? My understanding was >>49716353 is right- people lose their houses because when there's a downturn they lose their job, or they were stupid enough to sign up for an adjustable rate.

[Anonymous No.49716620]

>>49716529
it's how those jews get their hands on tons of houses, happened in southern Europe in 2009.

[Anonymous No.49716627]

>>49716528
This is also correct, banks often sell foreclosed homes way under value just to get rid of them.

[Anonymous No.49716630]

>>49716163
It's not a fallacy. Your cost is sunk. And your homestead isn't a financial investment. Netting 15% on the sale of a house wouldn't induce most people to move, while that would be nearly double the average annual return of an S&P index fund.

>>49716164
Based.

>>49716216
Hey, don't call me that. It's not nice.
Banks are not at all quick to foreclose on houses. It expensive, and in the aggregate creates a supply glut. Then banks have to carry empty houses and pay property taxes on them.
Banks don't like owning things. They like charging you interest, and you paying.
Negative equity is far from a death sentence.

[Anonymous No.49716637]

>>49716588
see >>49716520

[Anonymous No.49716653]

>>49716164
thinking about doing this and fixing it up but they are in shit locations

[Anonymous No.49716668]

>>49715953
no refunds

[Anonymous No.49716704]

>>49716468
You're a moron who has never owned a home and doesn't understand anything about real estate.

[Anonymous No.49716723]

>>49716653

Whenever you have thoughts like this, just remember there are no banks in the ghetto.

[Anonymous No.49716732]

>>49716704
>what is projection
i'm telling you how it works from experience

[Anonymous No.49716733]

>>49716630
>It's not a fallacy.
I didn't say its a fallacy. I said it's terminal coping, which it is. Telling yourself to feel nothing over ending up in an inferior position is solid copium.

[Anonymous No.49716756]

>>49716520
There are just no fixed rate mortgages in the UK? That can't be right.

[Anonymous No.49716782]

>>49716630
>And your homestead isn't a financial investment.
that's news to pretty much every home buyer ever

[Anonymous No.49716794]

>>49716756
There are but Bongs are shit beaten mule peasants are usually go flexi without even thinking about it

[Anonymous No.49716804]

>>49715953
Your property tax goes down and your payments effectively become less. Especially if the decrease in value is the result of runaway inflation.
If you're some kind of faggot boomer just looking to flip a house, I hope you get fucked.
If you're living in the house as a home, the property value really doesn't matter.

[Anonymous No.49716825]

>>49715953
>u/Hotbitch2019

[Anonymous No.49716835]

>>49716653
That's why the guy in the picture has a gun in his hands. https://www.youtube.com/watch?v=Z4iQxpwYhAg

[Anonymous No.49716836]

>>49716794
kek true tbqh desu

[Anonymous No.49716843]

>>49715953
It's sad that this is going to happen to so many people. Most people buying homes aren't doing so as an investment and just want a house. A lot of people are going to get financially fucked at no fault of their own.

[Anonymous No.49716859]

>>49715953
It's called being underwater on your mortgage, where you owe more than the house is worth and would take the loss on a sale. That's why you should only hold houses that you fill with family instead of trying to flip houses to the greater fool and get left bagholding.

[Anonymous No.49716861]

>>49716733

You literally aren't in an inferior position.
You didn't own a house. Now you do.
Historically speaking, unless you plan to sell your house in the next 4 years, you're not going to take a loss on it.
If you do, then you're severely misunderstanding the point of buying a home.

[Anonymous No.49716891]

>>49716861
>You literally aren't in an inferior position.
>You didn't own a house. Now you do.
Jesus I hope when I'm making sales I run into people like you

[Anonymous No.49716892]

>>49716782

Ok then explain to me how it is.

[Anonymous No.49716916]

>>49716468
THEY DONT ASK YOU FOR ADDITIONAL COLLATERAL BECAUSE ITS NOT A MARGIN CALL YOU STUPID ESL FUCK TARD NIGGER. THATS NOT HOW IT WORKS. ITS A FUCKING LOAN AGREEMENT WITH AN AMMORTIZATION SCHEDULE REGARDLESS OF WHAT THE MARKET VALUE IS OF THE HOUSE.

HOW CAN YOU EVEN USE THE COMPUTER IF YOU ARE THIS FUCKING STUPID.

[Anonymous No.49716944]

>>49716427
What if you own a construction company and are using that to build your own house?

[Anonymous No.49716969]

>>49716756
The fixed rate mortgages are comprised of two parts. Eg: fixed for 2years then variable for 23years. The variable rate part is at multiple % over base rate though. It's a *bad* variable rate. But, if you're in low or negative equity, you'll be stuck with it.

[Anonymous No.49716973]

>>49716529
who the fuck gets variable rate?
how is that shit even legal anyway?

[Anonymous No.49716977]

>>49716732
The bank cannot turn around and ask you for more collateral on a loan you already agreed to the terms of. I'm sorry if you live in some turd world country where such a practice is legal, but it does not happen in the USA.

[Anonymous No.49716982]

>>49716112
I can refinance a house at better interest rates I can’t rebuy a house at a better price

[Anonymous No.49716987]

>>49716468

In your world, how does the bank benefit by foreclosing on a home that’s worth less than the outstanding loan balance? They’ve now evicted the owners, who were ostensibly maintaining the property. And they can’t sell it to get their money back because it’s not worth the loan balance. I’ll answer for you: they don’t benefit. That’s why they don’t foreclose just because the home value dropped.

[Anonymous No.49716992]

>>49716794
going flexi would literally have been the best decision for the last 15 years

[Anonymous No.49717023]

>>49716529
Who, in the last decade was retarded enough to sign up for an ARM? The whole point of the current supply crisis in housing is largely due to practically no interest mortgages. Everyone has a fixed rate now. ARMs make up MAYBE 5% of mortgages.

[Anonymous No.49717031]

>>49716969
So it's not actually fixed rate it's just a meaningless breather period before you get fucked. There must be a way to get an actual fixed rate mortgage.

[Anonymous No.49717035]

>>49716353
>People got foreclosed on because they couldn't make payments on their mortgage.
And in some cases, they willingly let themselves get foreclosed upon (strategic default) because paying off a huge mortgage on a house only worth half that doesn't make financial sense to them.

[Anonymous No.49717084]

>>49716891

Make a rational point or you lose the argument, faggot.

[Anonymous No.49717087]

>>49716982
this is why I'm waiting for housing prices to go down and the rates to skyrocket. So I can just buy in cash

[Anonymous No.49717095]

>>49716529
Anybody who would sign up for a variable rate mortgage after 2008 has shit for brains and deserves what they get.

[Anonymous No.49717102]

>>49717035
Yes you are right, so is everyone else who chimed in who ISNT the guy who thinks mortgages are margin calls.

That poster is the stupidest fucking cunt I've ever seen on this board. It makes me want to take a break from this site. I hope somebody sticks a club up his ass, dumb fucking cunt.

[Anonymous No.49717109]

>>49717031

The only reason the US has 30 year fixed rate mortgages is because of Fannie Mae and Freddie Mac. Without the GSEs, there would only be ARMs and 15-year fixed. No bank would take 30 year interest rate risk.

[Anonymous No.49717112]

>>49715986
>Noooooo you can't ask questions. You have to remain financially ignorant goyim
Retard.

[Anonymous No.49717168]

>>49717109
Is this bad? I can't see the catch, but I feel like there must be one

[Anonymous No.49717200]

>>49716982

If you bought a house 6 months ago, you literally cannot refinance it at a better interest rate anywhere on earth right now.
You paid a lot up front, and your amortization is less severe over time. That is the definition of a favorable deal.

[Anonymous No.49717203]

>>49715953
This is only a problem for retards who can't sit still in 1 home for a long period of time

[Anonymous No.49717229]

>>49716333
>that post
>green ID
glow more

[Anonymous No.49717244]

>>49717168
2008, because there were alot of people with mortgages that couldn't really afford them.

Lending was tightened up after 2008 but its just become a fuck fest again.

[Anonymous No.49717247]

>>49717112
>take a loan for x
>thing you bought with the loan breaks
>do i still have to pay off the loan?

[Anonymous No.49717313]

>>49717084
What rational argument is needed. You paid more for something you didn't need to. That's bad. Anything else is cope

[Anonymous No.49717317]

>>49717109
Thanks for the informative reponse anon. By chance could you offer any advice on this? I haven't been able to get any responses elsewhere - I have a mutual fund I want to cash out for precious metals. Is there a way to do this without paying capital gains tax? Can I somehow exchange into physical gold somehow without paying capital gains? Is there anything akin to a 1031 like-kind exchange? If not it feels like I'm facing a huge loss to double taxation - capital gains on the way in (from cashing out the mutual fund) and again whenever I decide to sell. To be clear I'm interested in physical metals, not ETF's or other stocks.

[Anonymous No.49717360]

>>49715953
Then your house is worth less than you paid for it so you wasted a bunch of money and if you have to sell it then you will sell at a loss.
It's the same thing as if you bought BTC for 50k

[Anonymous No.49717414]

>>49717244

Incorrect. The majority of new loan originations have FICOs above 650. Banks are being careful as fuck.
What you're seeing is an organic supply shortage.
Immigration.
Crowding of urban areas people actually want to live and work in.
A hard boundary on the driving distances they're willing to commute to work from suburbs.

[Anonymous No.49717418]

>>49715953
It means you got fucked lmao

[Anonymous No.49717426]

>>49717031
>So it's not actually fixed rate it's just a meaningless breather period before you get fucked.
Yes. Exactly that.

[Anonymous No.49717427]

>>49715953
No refunds uglybitch2019

[Anonymous No.49717435]

>>49715953
after reading many of previous posts so far... Op's question is not that stupîd after all... seems nobody in /biz/ can give the right answerbecause everyone is a genius and a faggot idiot incel at the same time

[Anonymous No.49717458]

>>49716216
>If the collateral goes down, the bank wants more security from you aka cash or other assets to back the loan
Anon that's only if you are retarded and somehow get a fucking variable loan. You are not retarded aren't you?

[Anonymous No.49717460]

>>49716891
Just use his argument on retards like him.
"Owning a house gives security in an unstable market. If things get even worse would you rather have to still pay rent?"

[Anonymous No.49717487]

>>49715953
this happened to me

>2002 buy house for $100k US
>2008 house is worth $120k
>2008 market crashes, house is worth $80k
>2010 market recovers, house is worth $200k
>2020 house is worth $500k
>current day, house is worth $650k
what happens is nothing. Don't sell your house when the price is down and literally nothing happens.

[Anonymous No.49717493]

>>49717360
It's not that simple. If you buy a 500k house at 2% and a year later it's worth 250k but the rate is 8% your payment would only be $300 less every month. Waiting on a lower value induced by higher interest rates is the most braindead thing you could do with your money. Rent cucks will find endless ways to cope.

[Anonymous No.49717497]

>>49717031
And no. No full-term fixed-rate mortgages in the UK at all.

[Anonymous No.49717506]

>>49715986
The vast majority of people are financially illiterate. That includes home owners

[Anonymous No.49717508]

>>49717313

If the average person tried to buy that same house at 6% instead of 3.5, the bank would tell them to buy less house or fuck off.
The proportionate effect of interest rates on buying power is higher than that of home price.

[Anonymous No.49717525]

>>49715953
Bitch was born in 2019 what do you expect?

[Anonymous No.49717526]

>>49717317

If you have gains on a mutual fund and sell, you have to pay capital gains tax unless it’s held in a tax deferred account like a 401k. There’s no way to avoid it. The good news is if you’ve held it more than a year, you pay the lower long term cap gain tax.

[Anonymous No.49717548]

>>49717435
What happens is nothing. You keep living in your home and paying your mortgage and eventually you'll own it out right and stop being the cuck of the bank or your landlord if you're really still renting.

[Anonymous No.49717551]

>>49715953
>does the money you paid on the mortgage essentially pay off the house faster? are you owed money
Holy fuck.

[Anonymous No.49717587]

>>49717548

Yeah then you're just paying the government rent on something you already paid in full for, and you're definitely not a cuck anymore, amirite?

[Anonymous No.49717653]

>>49716992
I'm an oracle and can see the future

[Anonymous No.49717655]

>>49717587
Where talking about an imaginary scenario where the home value falls. I'm living in a house that should be expensive but is not valued as such. That means the property tax is lower.

[Anonymous No.49717657]

>>49716588
>because when there's a downturn they lose their job, or they were stupid enough to sign up for an adjustable rate.
Yes or in some countries (Ireland) adjustable rates are the only ones you can get. There will be mass civil disobedience if rates get much higher, you can't evict double-digit % of the population all at the same time.

[Anonymous No.49717663]

>>49717168

The catch is that the US government has guaranteed trillions of dollars of mortgage debt, but doesn’t have to carry that liability on its balance sheet because the GSEs aren’t technically the US government. People don’t realize how close the US came to insolvency during the 2008 real estate fiasco.

[Anonymous No.49717750]

>>49716861
The Housing market topped in 2007, and took 11 years to recover to former prices. Proportionally, if you can observe the variety of indicators (CPI indexes etc) leading to the 2008 crash, and compare them to the current situation, the fallout could be magnitudes worse. 4x at a bare minimum, which would completely destroy anyone who bought the top.

Yes you may have a house, but young families in starter homes will never be able to leave, or sell at a catastrophic loss, incur a huge liability with reduced equity, and unable to refinance/upgrade their situation.

[Anonymous No.49717757]

>>49716427
Except that contract you bought at the top and the inevitable delays because economic contraction despite 6 months of upfront material payments.

All it does is give subs an excuse to be lazy

[Anonymous No.49717766]

>>49717657
>in some countries (Ireland) adjustable rates are the only ones you can get
That's fucking insane. Euros are so absolutely cucked.

[Anonymous No.49717793]

>>49717551
you can imagine that the sheer financial illiteracy of some zoomers will cause them severe expectation disillusionment. the rate at which theyre killing themselves seems to be compounding

[Anonymous No.49717797]

>>49715953
I want a house to live.

[Anonymous No.49717831]

>>49717229
Yeah keep hiding in that basement with your 12 rifles while Jamal fucks your wife.

[Anonymous No.49717832]

>>49715953
At first I thought no one is this retarded and then I read this thread. Holy shit some of you have literally no idea how anything works.

[Anonymous No.49717864]

>>49717414
I concede, you are right. I thought the lending had gotten more loose during the second half of the trump administration.

Gj anon.

[Anonymous No.49717868]

>>49717548
>stop being the cuck of the bank or your landlord if you're really still renting.

Well.... I just sealed the deal right before the shitstorm arrived.
Closed mortgage at €325K@2.15% fixed 20y.
Even with this inflation i am actually making good money, combined good incomes, /WFH/ and house comes with 30 acres of land. Fertile, water deposits in the ground, rivers nearby, woods, and no factories in a 15Km radius.

I believe I just made it on board the not-so-poor-train

[Anonymous No.49717877]

>>49717526
I know some bullion stocks (certain etf's maybe, I don't know all the technical metals trading stuff) will allow you to redeem your holdings for physical gold. If there was a way I could exchange/move my mutual fund money into one of those instruments and then redeem before any substantial price change, there wouldn't be any capital gains. I just know about 1031's in real estate so I was hoping there was something similar in the stocks world.

[Anonymous No.49717881]

>>49717750

>The Housing market topped in 2007, and took 11 years to recover to former prices.
That happened one time.

>Yes you may have a house, but young families in starter homes will never be able to leave, or sell at a catastrophic loss, incur a huge liability with reduced equity, and unable to refinance/upgrade their situation.
I can think of no aspect of American life that the government would be quicker to step in and print Fedbux to save than home ownership. Hell, they've already done it once.
And even if they don't, what are banks going to do about it? Hire a private army to boot hundreds of thousands of Americans out of foreclosed-upon homes? Good luck.

As you say, at the end of all that, you still have a house.

[Anonymous No.49717895]

>>49717317
The bottom line is you won't be able to cash out for physical metals without getting a tax bill. But you could buy some sort of metals ETF or mining companies.

[Anonymous No.49717904]

>>49717868
Very based. Congrats Anon

[Anonymous No.49717910]

>>49717023
>https://www.cnbc.com/2022/04/27/adjustable-rate-mortgage-demand-doubles-as-interest-rates-hit-the-highest-since-2009.html
>The adjustable-rate mortgage share of applications last week was over 9% by loan count and 17% based on dollar volume. At 9%, the ARM share was double what it was three months ago.
honk honk. this is reporting from April. The total percentage of mortgages in the last 10 years is probably low, but it's probably continuing to rise as fed rates increase. It's 9% by loan count and 17% by dollar volume, ARMs are being used to buy expensive/inflated homes.
Also, i don't think these numbers include things like DSCR loans for STRs that are likely floating/ARM? Those have been used extensively by all the tiktok Airbnb investors. Basically NINJA loans for STRs

[Anonymous No.49717920]

>>49717766
Yep it's gay as fuck. They compensate for it by making it incredibly difficult to evict anyone.
What does that mean in practice?
It means that boomers who got rich on the '08 property ponzi get to keep their massive McMansions for free, while millennials and zoomers get to suck a fucking dick. What a system!

[Anonymous No.49718034]

>>49717864

Honestly I believed that too until I saw this chart.
Best to re-orient your thinking as to what's actually going on.
Homes are expensive because homes are scarce.
So is land.
Money is cheap because it is not.
Same with stocks, which today are basically just speculative betting slips not tied to earnings or other objective measures of worth.

Market for paper going to hell.
Market for useful things going to the moon.

[Anonymous No.49718053]

>>49717904
thank you. But to get back to OP's question i have to be brutally honest. This only works because i happen to have a good paying /WFH/ job (and yes, actually doing something from home) and can keep it bringing in .
However, The thought of becoming incapable to work again due to illness/accident, the thopught of getting fucked over despite insurances and healthcare plans... it's frightening. I am sure many other anons here feel the same -distant/unlikely- fear as i do.

Therefore i believe OP's question, even a question coming from a Karen, deservers a truthful answer.

[Anonymous No.49718090]

>>49717910
>Interest rates are on the rise
>I better get an adjustable rate mortgage
Who are these people!?

[Anonymous No.49718095]

>>49715998
Um, think again sweetie.

[Anonymous No.49718123]

The UK is considering bringing 30 year fixed mortgages soon, according to an article I read today.

[Anonymous No.49718135]

I got locked into my 30 year mortgage at 2.05%.

GET FUCKED ARM TARDS

[Anonymous No.49718147]

>>49715953
Change "student debt" with "housing"

[Anonymous No.49718158]

>>49718095

>so you better buy from me at all-time highs
It never ends.

[Anonymous No.49718233]

>>49718090
I'm guessing they were retarded and saw that ARM rates were lower than fixed rate and thought they were getting a better deal lmao. I hope they can withstand the higher rates and refinance when we get lower rates in 2024

[Anonymous No.49718260]

>>49716216
This is incorrect, also “lose” and “loose” are two different words

[Anonymous No.49718286]

>>49718090
Boomers that think rates will drop. As long as you aren't a first time home buyer banks will try to throw that scam on you and boomer fall for it almost every time

[Anonymous No.49718324]

>>49716292
>>49716335
Lel didn't notice that either

[Anonymous No.49718350]

>>49718053
> You did read the fine print right?

Of course I did. We have to take a debt coverage insurance with it (we got it in full) and bank explicitly states to find good solutions including appeals for (temporary) loan suspension or even clearing from debt (when you have died or severely handicapped) . the mortgage is also in large part for the first 5 years covered by goverment securities. Still, it's a damocles sword swinging above your head when you for any reason cannot make your mortgage payments.

[Anonymous No.49718386]

>>49718135
Same anon. I flipped my old house for over double what I bought it, paid off my $65k student loans, and had a huge down payment for a brand new house 3 times the size. Thanks to the interest rate being so low we are only paying about $1k a month more which is still barely noticed in our monthly budget. Last summer was the absolute sweet spot.

[Anonymous No.49718454]

>>49716112
You'll suddenly give a shit when you get fired because you're a wagie. If you're not a wagie, your portfolio is probably also doing shit and you'll have to sell assets and lose income, same thing. It's only irrelevant if you're old money.

[Anonymous No.49718461]

>>49717493
When your food, gasoline, and utilities have all gone up on a monthly basis to equal that $300 it's nice to have it.
Regardless, you are missing the point. The $100k you put down on the $500k price is now 40% of the $250k price so you could either put the same amount down and have a much much lower mortgage or you could put the standard 20% down (now $50k) and have more capital to deploy elsewhere aka not be house poor.
Top buyers can't into basic finance.

[Anonymous No.49718462]

>>49717023
bruh, you're really asking who is retarded enough? there's people retarded enough to buy the same item for 2 more dollars in a shop when there's a shop right next to them who sells the same item cheaper.

most people think the guys at the banks or insurances are actually there to help them, to get them the best contracts instead of robbing them. mostly because they are just ignorant and trust anybody with a shaved beard, nice haircut and suit who seems to be smarter than them.

[Anonymous No.49718472]

>>49717868
Where? That's a fucking steal on the face of it

[Anonymous No.49718501]

>>49716216
If you got a variable loan you pretty much deserve this.

[Anonymous No.49718518]

>>49718454

Getting fired is a completely separate issue from owning a house.

[Anonymous No.49718575]

Thank God when I bought 2 years ago I bought in the area that had the highest increase over the past 2 years.

I feel like I literally dodged a fatal bullet. My house might lose some of the value of has gained but there's zero chance it will be worth relatively less over time than what I bought it for.

[Anonymous No.49718577]

>>49718472
South of Belgium, near France

[Anonymous No.49718724]

>>49718461
Stop scaring the kids, they need to learn the hard way

[Anonymous No.49718771]

>>49718577
Huh, did they already surrender to Vatniggs?

[Anonymous No.49718781]

>>49715953
You just hold the house till the price recovers. Unless you bought a house and then niggers move in next door and the price tanks and never recovers.

[Anonymous No.49718785]

>>49718461
You assume the owner of the home is going to sell to you at a 50% discount when they might just say fuck it and ride out the storm. Shrunken supply would shrink even further. Ironically raising prices or just keeping them stable while rates raise.

[Anonymous No.49718835]

>>49715953
So when a house goes up, you can sell and keep the profits. If the house value goes down and you want "out" then you can often negotiate a short sale, meaning you sell for less than you owe or you just walk away and say fuck you to the bank. Can the bank go after you? Very unlikely when everyone else is doing it. That being said any difference from what you owe from what the house sells for is income for the IRS. Sell for a 50k loss? IRS says you made an extra 50k that year LOL!

[Anonymous No.49718884]

Wonder how high interest rates would have to go to see a pronounced effect on the home prices, considering all the foreign investment, housing programs, and blackrock purchases are going on. Really want the price of houses to go down if it is going to cost more to finance a home.

[Anonymous No.49718907]

>>49715953
Yeah this is the top.

[Anonymous No.49718962]

>>49715953
It magically bursts into flames and insurance will take care of it.

[Anonymous No.49718973]

>>49715953
>Sign contract for $500k payment in exchange for house
>House now only sellable for $300k
>Do I get my 200k back

No. You already paid $500k through the bank or cash and have now lost money.
The interesting thing is that certain sizes of homes cost less, 50% more paid price with a low interest loan. That's why $500k houses in my area went up to $1mil. You end up paying the same or less over 30years with a lower interest rate.

[Anonymous No.49718988]

>>49718518
not really
and it's not "getting fired" it's called getting laid off
i.e. a recession/depression

[Anonymous No.49719010]

>>49715998
She's seething that she probably lost $200,000 and can't just flip it for easy profit.

[Anonymous No.49719038]

>>49715998
>hotbitch2019
no, it's some trolling chud

[Anonymous No.49719040]

>>49718884
it's already happening, doofus
very few houses are being sold for cash

[Anonymous No.49719049]

>>49715953
If you live in the house it doesn't matter. Either you pay a higher interest rate with lower value or you pay a lower interest rate with higher value. Your monthly payments will be the same.

[Anonymous No.49719051]

>>49718835
The last part is schizo posting but the bank not going after you is the basis of the aftermath of the 2008 crisis. They realized they'll lose less money letting you pay when you can than trying to resell

[Anonymous No.49719070]

>>49717881
>That happened one time.
Bruh, it happened once in YOUR lifetime, and is poised to happen AGAIN, but worse. If you were unfortunate enough to have bought anywhere from 2003-2008, that's a mistake that would cost you 20% of your working life to dig out of. If it happens again, even to the same degree, that's 2 decades of misery, where you would have otherwise expected to see growth

>I can think of no aspect of American life that the government would be quicker to step in and print Fedbux to save than home ownership. Hell, they've already done it once. And even if they don't, what are banks going to do about it? Hire a private army to boot hundreds of thousands of Americans out of foreclosed-upon homes? Good luck.
Lmao pure delusion. What do you think they've already been doing? Printing more money won't save this problem. They're the ones who created this scenario to begin with, and are frothing at the idea of syphoning what's left out of the middle class. Also, defaulting on your mortgage payments poses a variety of financial/mobility issues beyond just having a roof over your head.

> You really think the gubment would just do that?
> Use force to protect their assets?

Gee good goy, I can't think of a single scenario where that has ever happened!

[Anonymous No.49719071]

>>49715953
>I'd like to talk to the manager of The Recession

[Anonymous No.49719073]

>>49715953
Depends on how underwater you go. Over 50% and just stop paying, live for free and save until the bank can evict(probably a year) and then it’s 7 years till you can get a mortgage again.
Otherwise just ride it out and it should recover in 5 years.

[Anonymous No.49719094]

>>49718884
Historic rate is like 8%. We're only at 5.5% right now. Plus with all of these outside investors that are buying cash they don't care about that rate.

[Anonymous No.49719123]

>>49716164
Buddy you can buy them in Baltimore for $8k right now

[Anonymous No.49719144]

>>49719094
>outside investors that are buying cash
show proof that this is happening to any significant degree. hint: you can't

[Anonymous No.49719167]

>>49719144
Show proof you're not a Jew.

[Anonymous No.49719180]

>>49718147
Usury is morally reprehensible.
If tolerated at all, any usurious loans should be assumed null and void 7 years after signature date. If you can't recollect your stake by then, you deserve to have to spice cut off.

[Anonymous No.49719183]

>>49718785
I'm using the numbers you provided

[Anonymous No.49719197]

>>49716216
No the bank also takes on risk which is why the require appraisals before giving the loan. They cannot come to you and say “uh guess our appraisal was wrong so please give us more money”. It’s on them to not value a house more than it’s worth. That’s why people have to put 30-40% down in a hot market. The market may say a house is worth 1.2m but the bank says that’s too much appreciation and they only value it at 900k so you have to cover the extra 300k

[Anonymous No.49719201]

>>49717112
Bro, you can not defend that question

[Anonymous No.49719244]

>>49716216
You don't get margin called on a fucking house retard. It isn't 1930.

[Anonymous No.49719249]

>>49718835
>Can the IRS go after
>very unlikely
Good luck, have fun. It's not like they know every single about you once filled out the loan application.

[Anonymous No.49719296]

>>49719167
maybe dont believe all the lies you read on the internet, retard

[Anonymous No.49719299]

>>49719244
I think you can If take a HELOC out

[Anonymous No.49719303]

>>49716333

[Anonymous No.49719324]

>>49716529
Variable rates are like 6% of the market and it’s mostly people who expect to sell before the fixed term is up cause they are on some kind of temporary assignment.

[Anonymous No.49719346]

>>49716216
You must be eighteen to post here

[Anonymous No.49719375]

Ok, can you guys help me understand this situation so I don't get ass fucked? I've read two responses to what happens when your home is worth less then the bank note. I live in the U.S.

Here are some real numbers. I bought my home for 255k(jan of 2021), I put 35k down. I now owe 220k on this house. My last appraisal was 350k(jan of 2022). If I sell now I pay off the loan, and pocket 130k(assuming I could sell it for 350k, which I don't think I can). Now, lets say housing shits itself and my home value goes to 200k between now and jan of 2023. If I sell at that point I would OWE the bank 20k just to sell my home. At least that's my understanding. If I'm wrong please correct me.

Side note, are you guys selling your overvalued houses and buying something smaller? I've seen more for sale signs in my neighborhood this past month then in the past year combined. This is in the suburbs of San Antonio, and its near a school so I think its people moving due to school being over, but I don't remember seeing it last summer.

[Anonymous No.49719494]

>>49719049
wow you're retarded

[Anonymous No.49719571]

>>49719375
>If I sell at that point I would OWE the bank 20k just to sell my home
You have to pay the balance of the loan when you sell your house. If you sell your house for $1(after commissions and closing costs)and owe $200,000 you have to pay the bank another $199,999 cash to close.
If you sell it for $200,001(after commissions and closing costs) you pay off the loan with the proceeds of the sale and walk away with $1.
Only other way out is short sale(only available in special circumstances) or foreclosure. In a short sale a bank might take a small loss for a deal that allows them to recoup most of their investment rather than foreclose. And you might still be on the hook for the remaining balance down the line.

[Anonymous No.49719580]

>>49716112
this. if you've already locked in a low interest mortgage with a low payment, you're golden. sure, the value of the house is going to go down during the recession, but raising interests rates and freezing the economy is not going to stop the absolute bloodbath of inflation that is coming, it's only gonna delay it. the only worry is job security so you can continue to make the payments.

they multiplied the amount of money by 5x. this was the number last reported in december so it could be even higherr now. everything WILL 5x in price and there is literally nothing the government can do to stop it.

[Anonymous No.49719842]

>>49715998
They never have accountability and nothing is ever their fault. But enough about blacks, women are this way too.

[Anonymous No.49720095]

>>49716216
This is the intelligence of the average /biz/ newfag tourist.

[Anonymous No.49720096]

>>49715953
only on reddit.... it never seizes to amaze me how genuinely,profoundly and irreversibly retarded normies are

[Anonymous No.49720195]

>>49719296
Maybe suck a fat one.

[Anonymous No.49720277]

>>49716520
You vill own nothing...

[Anonymous No.49720321]

>>49715953
IM A RETARDED NIGERIAN AND EVEN I KNOW THIS ANSWER HAHAHAHAHAHAHA WHAT THE HELL HAS THIS BUTCH BEEN DOING FOR MOST OF THEIR ADULT LIFE NOT LEARNING SHIT ABOUT MONEY?????
>are you owed money???
BAHAHAHAHAHAHHAHA

[Anonymous No.49720345]

>>49716916
yeah if you’re buying some Lennar spec home ~1,300 sq ft shithole on a FHA loan you have a fixed rate, if you want to buy an actual nice home people use SBLOCs HELOCs which are are variable interest, I know this is all a little complicated but check your “zestimate” in a year and you’ll understand better

[Anonymous No.49720394]

>>49716333
>retard blows up the biggest bank branch in his city
>gives their government a reason to put in stricter surveillance laws
this is how retards ruin everything

[Anonymous No.49720418]

>>49715986
https://www.reddit.com/r/personalfinance/comments/vdbr0j/i_started_building_a_house_when_rates_were_3_now/

[Anonymous No.49720444]

>>49719038
>reddit pants

[Anonymous No.49721014]

Bros I've been living with my senpai since covid and I'm trying to buy a house but I can't do it. There's barely any houses for sell and the ones we've looked at are tiny trash houses that need work and they want 200,000K. People are saying the interest rate being low makes up for it but they told me interest rates have jumped up again over 6 fucking percent I don't know what to do. I make 90k a year and I feel poor as fuck. I've got like 37k in cash saved up but I don't want to spend it all on a down payment that won't even hit 20 percent of the cost.

[Anonymous No.49721065]

Unless I'm missing something here couldn't you just sell your house back to yourself for half the price and recoup your losses?

[Anonymous No.49721104]

>>49718095
>computer isn't even plugged in

[Anonymous No.49721315]

>>49717035
>And in some cases, they willingly let themselves get foreclosed upon (strategic default) because paying off a huge mortgage on a house only worth half that doesn't make financial sense to them.
This works only in the US because you have non-recurse debt. Almost anywhere else in the world you can not just default on the housing loan. People elsewhere are on the hook with all of there other worldly assets and can't just "walk away" from the mortgage.

[Anonymous No.49721440]

>>49717414
Assuming those credit scores won’t go down.

[Anonymous No.49721444]

>>49720418
>i started building a house
this is the problem right here. people thinking that money builds things. this faggot is not "building" a house, he's paying someone else to build a house for him, there's a huge fucking difference. there is nothing in this world that exists because of money, everything was built by a man or men. people who make 6 figs sitting at a desk writing emails actually think they provide value to the world but it's all a house of cards that is beginning to fall.

[Anonymous No.49721559]

>>49716468
the house is the collateral

the mortgage is the financial product.

lel one is born EVERY minute god bless america

[Anonymous No.49721772]

>>49719580

I'm curious why you think raising interest rates and forcing an economic slowdown won't curb inflation.
Anyone else with thoughts on the matter, feel free to chime in.

[Anonymous No.49721798]

>>49721440

Uh, I would assume all of the data was collected at loan origination.
Banks would have no reason to provide updated credit score data on loans issued 20 years ago.

[Anonymous No.49721834]

>>49715953
I buy it with an FHA loan for like 35k

[Anonymous No.49722008]

None of you are making any sense. If my house goes down in price then my mortgage should go down too. Why would I pay more for something that's worth less? Idiots.

[Anonymous No.49722046]

>>49721772
I think the idea is that it just won't be enough. That 5x'ing the currency supply (at minimum) in 2 years can't be counterbalanced with a tepid rate increase to any meaningful extent - and that, on the other hand, any rate increase that *would* be large enough to fix such a monumental blunder would bring the house of cards that is our fragile and overfinancialized economy tumbling down.

[Anonymous No.49722070]

>>49722008
Oh boy, we got a live one boys

[Anonymous No.49722083]

>>49722008
Because you signed a contract at a loan amount, not a house value. Stay with us retard! I know shit is moving fast but come on, we need you with the rest of us.

[Anonymous No.49722112]

>>49720345
Kill yourself. Fucking fag, you don't use fucking HELOCs to buy homes you dumb nigger. What the fuck is going on in this thread. Does everyone who enters this thread lose 30 iq points

[Anonymous No.49722123]

Put half down on a house and you never have to worry about this loan collateralization shit.

My mortgage payment is less than some of you retards are paying for apartment rent.

[Anonymous No.49722165]

>>49716029
No, that is flat out wrong.
PMI - Private Mortgage Insurance.
You are required to carry PMI and it is built into your mortgage cost when you take out the loan unless you put 20% down when you buy.
The reason you are required to carry it is to cover this exact scenario where the market tanks and the property is worth less than the cost of the mortgage.

[Anonymous No.49722171]

>>49722123
Based

[Anonymous No.49722189]

i feel a lot stupider after having read this thread

[Anonymous No.49722230]

>>49722123
The house is the collateral! I have never heard a bank coming for more collateral because the housing market crashed.
Also my mortgage is $600 a month, fixed interest rate

[Anonymous No.49722259]

>>49722165
*not applicable to VA loans

[Anonymous No.49722262]

>>49716163
You bought the house you wanted at the price you could afford.
If any of what I said is wrong then its your fault for settling.

[Anonymous No.49722308]

>>49722046

It's really hard to nail down exactly where all that M1 went, who has it, and how it's affecting overall money supply.
It's not in people's savings accounts; national savings rates are at 15 year lows.
It's not in homes; the vast majority of that is credit, because no one buys homes with cash.

The thing that concerns me most, more than M1 surge, more than overnight reverse repo above $2.2T and repo being (seemingly) unpublished by the Fed for the last 18 months, more than the stock market mooning during a pandemic/shutdown, is the fact that banks no longer have reserve requirements.

They don't actually have to have a positive net asset balance to lend against.
They can just create money out of thin air with nothing in their vaults.
The only thing stopping this is what their shareholders think of the amount of leverage on their books.
If that tide ever starts to turn...oh boy.

[Anonymous No.49722320]

>>49722008
I know right? Why not just sell your house back to yourself and pay less mortgage. Kek this thread is full of dummies

[Anonymous No.49722394]

>>49721772
raising interest rates DOES slow inflation --when you only print a few billion. even then it does not stop inflation, it just slows the effects. there is a 1:1 mathematical correlation between increase in money supply and cost of goods, there has NEVER IN THE HISTORY OF MONEY been an instance where money was created and inflation did not follow at a 1:1 ratio. usually there is about a 2 year delay and we're just starting to hit that 2 years now, which is why the Fed is rasing rates. they can't stop it though, they can only slow it down a tiny bit.

a little over 2 years ago there was 4 trillion USD in curculation. now there is 20 trillion. 5x, %400 increase. a gallon of milk is going to cost $15 very soon. what we're seeing with gas isnt even due to inflation, so we could very well see it hitting $25 a gallon, and most fuel services are not allowing industrial companies to buy in bulk because they know the price is just going to keep going up. we are so fucked that it isn't even comprehensible.

[Anonymous No.49722433]

>>49722123

>have money so that you will never have to worry about having money
kek thanks

[Anonymous No.49722470]

>>49720095
Speechless. Luke warm IQs are fascinating to interact with. In Aus most loans are fixed term (2yrs) then variable or refinance mortgage at new fixed term rate based off of current market rates. Or you can just go variable for slightly lower than fixed rate. Or interest only, kek. So many people here are on interest only that are about to get rekt. 5% deposit with LMI. What could possibly go wrong

[Anonymous No.49722514]

>>49722394

Ok, so how much did we increase the money supply by?

[Anonymous No.49722575]

>>49721104
it's a laptop, anon

[Anonymous No.49722582]

>>49722514
are ye fucking retarded?

[Anonymous No.49722591]

>>49722394
Ok
now look at historical correlation between m1 or m2 and cpi
they both mean jack shit now because of eurodollar system
retard

[Anonymous No.49722683]

The funny thing is, sometimes you do get money back. My parents bought a house for $600k and a few years later the bank said the appraiser was wrong and should have never appraised the house that high. They got something like $100k off their mortgage. We think it was the bank covering their ass or something for not looking enough at what was going on.

[Anonymous No.49722745]

>>49715953
That was written by Biden's black female Supreme Court justice.

[Anonymous No.49722768]

>>49722591
inflation is not avoidable. we 5x;d the money supply. i do not understand how people can be so retarded as to think inflation will magically not happen. stop watching cnn.

[Anonymous No.49722777]

>>49722582

My point is that M1 is cash and demand deposits.
If there are $50 in the US economy, $3 are cash and $47 are credit money.
The M1 chart shows 4x. But the total increase in money supply isn't just M1, right?

[Anonymous No.49722809]

>>49722768
you did not process a single word i said retard
you still think milk will go 4x?

[Anonymous No.49722953]

>>49719346
Hahah variable during these times???

Who in their right mind would sign that, it's GUARANTEED to increase

[Anonymous No.49722961]

>>49716216
>loose

[Anonymous No.49722988]

>>49722768
The past few decades is how. They are used to deflationary effects of "globalization" that let them be comfortable printing money and pumping assets with it while slave goods got cheaper and shittier through slave labor, neutralizing that to roughly net zero inflation on cattle subsistence goods. Now real economies have been pulling the rug and the US elites seemingly don't even realize that was what they had been doing. Funny how world events are used to justify higher inflation but nobody ever mentioned it when they should have resulted in it being lower.

[Anonymous No.49723024]

so hey i think this is the best place to post it so here it goes.

im not interested in defending my kiked up country.
i am more interested in defending my countrymen.
if any one is worried about being foreclosed on, evicted, their housing taken, i will gladly take a rifle, some nocs and a spotlight and take the nightwatch defending your property and making sure the feds dont rip you out of bed in the middle of the night.

[Anonymous No.49723037]

>>49716992
Yes and no, fixed were low too.

[Anonymous No.49723069]

>>49723024
Based anon.

[Anonymous No.49723073]

>>49719180
but student loans are already cheaper than regular consumer loans.
especially in the country with by far the best universities in the world, even a 100k student loan is nothing in return for a degree that enables you to make that much in a year or less.

[Anonymous No.49723115]

>>49715998
kek, onlyfans insta hoe bought a stupidly expensive house at the top of the market and just realized the housing bubble is about to burst and the simp cant pay for OF anymore.

[Anonymous No.49723630]

>>49716987
The same way you'd benefit in closing ones leveraged position an any asset. It's called cutting your loses. What do you think is going to happen if the property's value drops below the amount owed?

[Anonymous No.49724484]

>>49717112
>the defender of even bigger retards

[Anonymous No.49724505]

>>49716216
>loose
>loosing

Holy shit Zoomers are retarded.

[Anonymous No.49724526]

>>49717023
>Who, in the last decade was retarded enough to sign up for an ARM?

Literally every single mortgage holder in Australia and New Zealand. Fixed rates are not even offered there for more than 5 years.

[Anonymous No.49724588]

>>49715953
A leaf friend of mine just bought a house last week lmao 600k for a 2bed shitshack cottage lmfao

[Anonymous No.49724679]

>>49722683
O for real b

[Anonymous No.49724843]

>>49715986
kek

[Anonymous No.49724872]

>>49716029
not unless you signed a very stupid contract and somehow leveraged up on your own house

[Anonymous No.49724904]

>>49716292
a women wrote this.

[Anonymous No.49725089]

>>49721444
>people who make 6 figs sitting at a desk writing emails actually think they provide value to the world but it's all a house of cards that is beginning to fall.
Senators who sit within their marble chambers and non-plebian bath houses discussing laws think they provide value to the world but it's all a house of cards that is beginning to fall

[Anonymous No.49725157]

>>49716333
>ushering in a new age of darkness.
*IT Team restores back up* oops plot failed retard

[Anonymous No.49725204]

>>49716112
>You bought a house.
>The price of your new house falls dramatically.
>Why do you care?
>You're not planning to sell a house you just bought, are you?
Exactly. Mortgages are *literally* 15-30 year investments.

[Anonymous No.49725368]

>>49720418
>edit: edit: edit:

[Anonymous No.49725415]

>>49716987
What if they're playing the long game?

You know, a world where the USD has crashed and only people who owned hard assets are still on top. A world where the vast majority of the public no longer has any assets of their own and require government assistance to live. You might have a scenario where it becomes guaranteed rent income from the plebs. Government gives them neodollars, they pay it to you in rent while receiving no ownership. Now you get to coast forever as the entire public is filling your pockets.

Pretty extreme scenario... but who knows what shit will look like in 10 years. Would ANYONE have imagined 2022 looking like this back in 2012?