Unless you were one of the few fortunate souls to buy a home in California many years ago when prices were affordable, it's just not realistic for a new home buyer to afford a house on the west coast.
Home Price Disparity
"On the coasts, average incomes are higher. But just a bit. In Los Angeles, an average family makes about 15 percent more than in Oklahoma City. But an average home in Los Angeles costs 600 percent more than in Oklahoma City."
Simply put, this is ridiculous that home prices are so out of whack with incomes in California. These soaring home prices are the result of greed and it puts the possibility of owning a home by an average income ( or even middle-to-high income ) family way out of reach. As a result, lenders have become more "creative" in their approaches to allow people to hang themselves with their mortgages. Interest only loans are one of the many foolish attempts by lenders to get people into homes.
I heard another story on the news the other night about a single black woman who is a nurse in New York. Apparantly, she was able to get into a home with a nice fat mortgage of $4,000/month !!! Yes, a nurse with a $4,000/month mortgage. Even if she was one of the world's most successful nurses making six figures, a mortgage of this amount would be almost impossible for her to afford. Yet, the mortgage lender thought she could handle it. So, keeping in mind that a mortgage should not exceed 28% of your gross monthly income, this woman would have to be making $171,428/year (or $14,000/month) in order to afford this home. It's highly unlikely she is making that much money (even in New York City). You know, I keep slamming mortgage companies, but at some point people need to wake up and stop insisting that they are entitled to a home and to discontinue this foolishness of getting themselves into mortgages that are just not realistic.
No comments:
Post a Comment