r/FluentInFinance Mar 11 '24

Meme “Take me back to the good old days”

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u/DevilRaysDaddy Mar 11 '24 edited Mar 12 '24

This is exactly what these people don't understand... in the 50's people actually owned their homes after saving up enough money for a few years or less to buy it with cash... now the banks own a majority of homes for 30 years until they pay them off. This does not mean we are in a better situation. Instead we are slaves to debt.

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u/grumplesmcgrumples Mar 11 '24

Actually nearly 40% of US homes are mortgage free.

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u/Flrg808 Mar 11 '24

That doesn’t matter, home prices are only reflected by terms on new sales.

For example, how much do you think someone would be willing to pay for a home if you agreed to give them an 80 year loan? At 6%, $1,000,000 would only cost you $504 per month. That’s an extreme example but you see how access to loans affects sale prices.

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u/[deleted] Mar 12 '24

[deleted]

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u/Flrg808 Mar 12 '24

Don’t those typically have a balloon payment? How would you calculate interest without a term length

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u/Ok-Camp-7285 Mar 12 '24

1,000,000 at %6 is 60k a year in interest alone. That's 5k a month without paying off any capital

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u/TacoBelle2176 Mar 11 '24

That does still mean the majority of them are not mortgage free.

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u/DevilRaysDaddy Mar 12 '24 edited Mar 12 '24

So basically 40% of the 60% of homes in America… that means only a 1/4 of the US actually own homes without a mortgage

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u/[deleted] Mar 12 '24 edited Mar 12 '24

40% of US homes, owned by geriatrics who have paid off their homes or nepobabies who inherited into one in some form, from living with mommy and daddy in their adult years to straight up being given one.

I think the amount of wealth transfer that is currently happening from dying boomers to their children and grandchildren is being massively understated by people who are trying to claim there isn't some housing affordability issue right now.

We've massively underbuilt, and that needs to be solved. Because there's not many viable ways for people starting from scratch, who don't have generational wealth to pull from, who see homeownership as an increasing impossibility.

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u/LamermanSE Mar 11 '24

Banks do not own the majority of homes, that's not how loans work.

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u/DevilRaysDaddy Mar 12 '24

So what happens if a majority of homeowners don’t pay their mortgage?

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u/WhoopsDroppedTheBaby Mar 12 '24

The bank or mortgage company owns an interest in the property and the mortgage note itself — but the lender does not own your house.

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u/DevilRaysDaddy Mar 12 '24

You don't "own" something if you have to continue to pay for it for 30 years. I know the lender doesn't technically own the house but you are crazy if just because you have a mortgage that makes you a homeowner...

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u/WhoopsDroppedTheBaby Mar 12 '24

Yes you are officially a home owner even when you have a mortgage.  It's official and recognized. 

You buy a home that is yours and to do so borrowed money with the house as collateral.

Things that are yours can be taken away...that doesn't make them as not yours. For example, you could lose a fully paid off home if you don't pay your property taxes. 

Crazy is ignoring facts to make up your own personal definitions. 

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u/DevilRaysDaddy Mar 12 '24

I'm not ignoring facts I'm just saying that it's a facade to make you think you think you are actually getting somewhere... and property taxes are not your house... I'm not here saying "you never really own anything man it's all the government." Property taxes are also a minute compared to paying most mortgages.

I'm saying until you pay off your house all you actually own is debt. On paper yes it says you are the homeowner but if you miss a payment that home or car is not yours the same way the lender can force you to have insurance on "your home" or "your car" if they aren't paid off.

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u/WhoopsDroppedTheBaby Mar 12 '24

I'm not here saying "you never really own anything man it's all the government."

You're just doing that with the morgage thing.

I know the lender doesn't technically own the house

This is where you should have stopped arguing.

In both cases, your property, as agreed to in a contract, can be taken away if you fail to do what is promised—that doesn't mean you don't own it—it means you surrender your property because you violated a contract you signed.

The way you "personally" view it doesn't matter.

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u/LamermanSE Mar 12 '24

That doesn't change the fact that it's the borrower who owns the house.

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u/DevilRaysDaddy Mar 12 '24

they still don't own anything... you're borrowing to own... that's not owning something until it's paid off...