I Saw a Commercial the Other Day Advertising for Mortgages...They Were
By Adoniah
@Adoniah (7513)
United States
February 13, 2013 10:18am CST
Discussing the different rates. They recommended not paying more than 38% of your income out in mortgage payments...WOW...I cannot believe that a lender would loan to someone when the payments would be 38% of their income...
No wonder there are so many foreclosures. I remember when I was a kid, my father told me to never pay more than 25% of my income out for housing. If you pay more than that, you will never make it if an emergency comes up. First you save up a big chunk of money for a down payment so that the principle is not insane...I guess, back then, folks still believed in saving for emergencies or things they needed...Today folks just put it on a card and sink deeper and deeper into debt. Never really paying off the principle. This is also why the country was allowed to sink so far into debt without anyone complaining.
No wonder there are so many foreclosures. I remember when I was a kid, my father told me to never pay more than 25% of my income out for housing. If you pay more than that, you will never make it if an emergency comes up. First you save up a big chunk of money for a down payment so that the principle is not insane...I guess, back then, folks still believed in saving for emergencies or things they needed...Today folks just put it on a card and sink deeper and deeper into debt. Never really paying off the principle. This is also why the country was allowed to sink so far into debt without anyone complaining.1 response
@peavey (16936)
• United States
13 Feb 13
That's true. Attitudes have changed a lot over the last decade or so. "Instant gratification" seems to be the culprit because people just can't wait to get what they want. I can't even convince my own grown kids to fund a decent savings account for emergencies.
But 38% is crazy. I hadn't heard that and I hope the financial gurus are not teaching that now.
@Adoniah (7513)
• United States
13 Feb 13
The problem is that the 38% has become the norm...This is what I am so upset about. I rent and am on a VA disability so I know that my rent is always going to take more than 38% of my income. But, I am not raising a family with all kinds of scary emergency possibilities. I can Just do things like I just did and turn off my cable...Next year, the internet will probably go, but I will face that when it happens...
@peavey (16936)
• United States
13 Feb 13
Oh, I understand. I'm on a fixed income, too, other than a little writing here and there and a few things like myLot and so on. It doesn't bring in much, but my house is paid off. I couldn't survive if I had to pay rent or a mortgage, no matter where I cut. Well, I guess I could but it would be serious survival only.
Let me see... at a simple $4,000 a month (close to average any more?), 38% is a $1520 mortgage payment. Sounds about right from what I hear. 
