Housing prices & mortgages are far more tyrannical than taxes

[Texacon]

Unbelievable stupidity resides at this link

chillspike  (364 posts)       

Mon Jul-19-10 08:27 AM
Original message

Housing prices & mortgages are far more tyrannical than taxes
 
Edited on Mon Jul-19-10 08:30 AM by chillspike

So where is the outrage at that???

I had a brief discussion at dinner last night with the two tea party nut jobs in my family, my Dad and older brother.

Their big enemy (to them), and granted rightly so, here in New Jersey is taxes. Taxes here ARE out of control but I told my brother if he really wanted something to complain about, his 30 year mortgage was $24,000 a year whereas his taxes were $8,000 a year. But he and my Dad complain a lot more about taxes. I pointed out that the largest sum of my brother's pay check was going to the bank to pay off his mortgage and that if he didn't have to pay a mortgage, his yearly taxes, while I agreed still high, would be much more manageable.
Of course, he replied with talk about a mortgage being "an investment not lost money" and he mentioned the tax break he gets for having a mortgage. But it is lost money. That money goes to the bank. You only get to keep any extra left over.

But I pressed and said that still didn't change the fact that the largest chunk of his monthly income is going to pay off his house and the bank. Something he doesn't seem to complain about nearly as much (if at all) than he does taxes. It seems to me the taxes wouldn't be as scary if the mortgage weren't there.

if anything is out of control and deserves anger with torches and pitchforks it's housing prices and mortgages. I mean, look at it: Houses are so expensive that you have to take out a loan that will take 30 years of your life to pay. That means, for the most of us, we are locked into servitude for the rest of our living days. And who ever pays off a 30 year loan? My brother has so far owned 3 different houses and he has yet to stay in any of them long enough to pay off his loan for them entirely. When he sold, each time the largest portion of the buyer's payment went to the bank.

I have to go but I will elaborate more on this later.

The point is, I think the largest portion of the tea baggers outrage should be directed at where the largest portion of their pay check is disappearing.
 

DUmmie, when I buy a home my paycheck isn't disappearing.  When I pay my taxes most of it disappears down a (dare I say it) black hole.

xchrom (1000+ posts)       

Mon Jul-19-10 08:34 AM
Response to Original message

2. It's hard to make back all you pay out in interest.
 
Talk about labor free profit.

Mind you I have nothing against reasonable
interest rates but most of us haven't seen 'reasonabl'
in a long time.

Taxes I really don't mind paying -- I get schools, court houses, roads, etc.

I don't know what this DUmmie considers reasonable .... a 30 year mortgage can be had for close to 5% .... oh, wait .... one must have good credit to obtain that.

 

lunatica  (1000+ posts)       

Mon Jul-19-10 08:46 AM
Response to Original message

7. I would pay much more for rent than I pay on my mortgage
 It's actually far worse if you rent. That's money you will absolutely never see recouped. At least your brother has recouped his money every time he sold his house. It may be the same as taking two steps forward and two backward but by renting you're always walking backwards.

Rents go up at the whim of the landlord. We were evicted twice because our landlords were realtors who used the house as a quick interest making investment and sold the house out from under us to other realtors who were doing the same thing and who were within their legal right to evict us so they could raise the rent on new renters. After the second time of being forced to look for a new house against our will we bought a house.

Today I pay far less for my condo than I would pay in rent as as long as I can keep paying my mortgage I won't be foreclosed on. As much as I struggle to pay it I would never be able to pay rent.
 

Yeah, that's why you were evicted.  So someone else could sign a lease for more monthly rent.  They wouldn't let YOU sign a new lease for more would they......  Wonder why.

reformist2 (58 posts)     

Mon Jul-19-10 10:14 AM
Response to Original message

11. Huge mortgages are why the economy isn't recovering.
 
 Probably the most effective way to get this economy going would be for Washington to do something to reduce mortgage debt across the board. Something like a $25,000 mortgage reduction credit for every adult. Not to be spent, but to be applied towards one's mortgage.   

Yeah, that's the ticket.  Washington should just give us more money!  That'll fix it!!  No one has to pay for anything because Washington has all the money if they would just give it to us ....

pipoman  (1000+ posts)       

Mon Jul-19-10 10:32 AM
Response to Original message

12. You have to live someplace
 The difference between taxes and a mortgage is that the mortgage is money you spend, taxes are money sent to someone else for them to spend. As I understand the teabagger movemnet, they object to taxes i n general. I personally object to our level of taxation and we still have no health care, under funded schools, pot holes on the roads, poor people laying in the streets, and rich, arrogant politicians.

Most people's mortgage payment which includes taxes, insurance, principal and interest is less than the amount it would cost to rent the same home. The value of a piece of real estate is a combination of the price of the land (usually small portion), the price of lumber and other building materials including plumbing and wiring, heating and roofing etc., the price of labor to build the house, and the value and desirability of the location. The prices of existing homes is largely influenced by the cost of new construction. Now, which area of new construction, in your opinion, is over valued? Lumber? Labor to build? Land?

Also people have been duped by bankers into spending more than they can afford and spreading it out over 30 years as the norm. Banks usually finance for 30 years (some even longer) without ever explaining other terms to people. For instance, a 100k mortgage at 7% for 30 years is $665 per/mo, for 15 years it is $898, a difference of only $233 per/mo to cut the mortgage term in half. The result would be $143,000 less paid out for that $100k property in return for paying only $42,000 more over the coarse of 15 years. People are encouraged to spend an amount on a mortgage which puts their payment where they need to be based on a 30 year mortgage.

Another problem is that people, especially first time home buyers, often feel they are entitled to a 'turn key' home, their 'dream home'. The era of starter homes is in the past it seems. As early as the 1980's when I was selling real estate, mortgage companies required a home buyer to put 20% down on a home. This 20% could not be borrowed or gifted. It had to be earned income in the possession of the buyer for at least 1 year, or the buyer had to show how the money was earned (through the sale of investments, or another home, etc). Additionally, the principal, interest, taxes, and insurance on the home combined with all other debt couldn't exceed 35% of the family's gross income. The result of these restrictions on say a $100k home is that the buyer had to have $20k in cash. At that time people would buy starter homes because they didn't have the down payment. They would live in the home and fix it up, then sell it and use the equity to move up to a more expensive home. This process took 15 or 20 years in most cases before the people were in their 'dream home'. The process was good for the economy, it was good for neighborhoods, and it kept existing home values in check with new construction.

What changed? The repubs pushed bank deregulation which relaxed the standards and dems pushed for lowering mortgage restrictions. If you saw that show on HGTV about first time home buyers which was popular during the housing boom, prior to the real estate bust, the problem was obvious. First time home buyers were looking at $300k+ homes while driving their newer Lexus while employed in entry level jobs. They would talk about how they need this location or that, this feature or that, and were unwilling to compromise. Then they would go to the closing, sign a first mortgage for 90% of sales price, and a 2nd mortgage for 25% of the sales cost. Both mortgages would be interest only payments for the first 5 years (no down payment). They would dance out of the closing with a check for 15% the purchase price which they would promptly take to the furniture store and buy a house full of new furniture. This idiocy was happening every day, all across the country. The result? Well, we all know what the result is...now we are all paying for the result, and those kid's new furniture too.

This is the scenario which has led us to where we find ourselves now.

How in the hell did this poster get on DU??

Good post!

Then we get ....

reformist2 (58 posts)     

Mon Jul-19-10 10:44 AM
Response to Original message

13. But we can bail ourselves out.
 What we just went through was a classic bubble. A tulip-bulb mania. Now everyone is saddled with these huge mortgages that are killing the economy. Why not just reduce them across the board? It seems stupid to punish ourselves when we don't have to. And if we do nothing, the only ones who will benefit will be the banks.

Not only MORE stupid but     Why can't we just have free stuff??

This one should be interesting to watch.

KC

[thundley4]

reformist2 (58 posts)     

Mon Jul-19-10 10:14 AM
Response to Original message

11. Huge mortgages are why the economy isn't recovering.
 
 Probably the most effective way to get this economy going would be for Washington to do something to reduce mortgage debt across the board. Something like a $25,000 mortgage reduction credit for every adult. Not to be spent, but to be applied towards one's mortgage.   

  you DUmmie.  What about those of us who were responsible and have paid off our mortgages.  We're better for the economy because we don't have that monthly payment going to the bank and that leaves more cash to infuse into the economy. No car payment also means having more available cash to spend.

[Texacon]

you DUmmie.  What about those of us who were responsible and have paid off our mortgages.  We're better for the economy because we don't have that monthly payment going to the bank and that leaves more cash to infuse into the economy. No car payment also means having more available cash to spend.

Then you sir, should be willing to give more to the government so this DUmmie can have a house .... or a nicer house.  It is all about helping the underprivileged  brain dead.

KC

[Texacon]

This DUmmie should look up Chris Dodd and Bawney Fwank and ask THEM why the banks started lending the money:

Oregone (1000+ posts)     

Mon Jul-19-10 11:08 AM
Response to Reply #1

15. People always want more than they can afford. Stupid banks started lending it
 Except the banks weren't entirely stupid. They leveraged against the risk.

That aside, the amortized loan interest scheme seems sick and wrong IMO.
 

KC

[BlueStateSaint]

you DUmmie.  What about those of us who were responsible and have paid off our mortgages.  We're better for the economy because we don't have that monthly payment going to the bank and that leaves more cash to infuse into the economy. No car payment also means having more available cash to spend.

I'll see your and raise you one. 

My wife and I specifically did not close on one house we were looking at because of the sneaking suspicion (that I had) that we might not be able to cover the mortgage payments.  We didn't have anything for a down payment (still don't have much for one, but that's our problem).  In hindsight, we probably could have covered the mortgage; but taxes in the location we were looking in have skyrocketed.  We rent, and we're waiting for the market to come back down some more.  It'll probably happen, but it takes time (and foresight).

These ****ing scumbags want everything handed to them on a ****ing polished silver platter.  **** them.  To paraphrase Sir John Houseman in the old Smith-Barney commercials, "Earn it."

[NHSparky]

Sorry Tex, but that poster you cited as a good post had SOME good points, but lost it with these:

As I understand the teabagger movemnet, they object to taxes i n general.

Incorrect, DUmmies.  We are not opposed to taxes in general, just EXCESSIVE taxes which leads to wasteful spending, more taxes, more spending...see the cycle in motion?

The repubs pushed bank deregulation which relaxed the standards and dems pushed for lowering mortgage restrictions.

Actually, the Dems got a bunch of sweetheart deals with deregulation as well.  Let's not forget that major bank presidents like Robert Rubin, et al, were working for folks like Citibank, etc.  And when the Dems blocked any sort of reform (Bwaney Fwank telling us that Freddie and Fannie were basically sound--remember that?) they set up the whole house of cards to fall.

[Carl]

Of course, he replied with talk about a mortgage being "an investment not lost money" and he mentioned the tax break he gets for having a mortgage. But it is lost money. That money goes to the bank. You only get to keep any extra left over.

DUmp genius on display again.

[Ballygrl]

chillspike  (364 posts)        

Mon Jul-19-10 08:27 AM
Original message

Housing prices & mortgages are far more tyrannical than taxes
 
Edited on Mon Jul-19-10 08:30 AM by chillspike

So where is the outrage at that???

I had a brief discussion at dinner last night with the two tea party nut jobs in my family, my Dad and older brother.

Their big enemy (to them), and granted rightly so, here in New Jersey is taxes. Taxes here ARE out of control but I told my brother if he really wanted something to complain about, his 30 year mortgage was $24,000 a year whereas his taxes were $8,000 a year. But he and my Dad complain a lot more about taxes. I pointed out that the largest sum of my brother's pay check was going to the bank to pay off his mortgage and that if he didn't have to pay a mortgage, his yearly taxes, while I agreed still high, would be much more manageable.

I call my property taxes are over $200 more a month than my mortgage payment and I live in NJ, and the reason why people complain is because of the towns being bloated with non-necessary personnel, and the school system which is the biggest burden on my taxes, and that's because of the salaries and benefits obtained by the unions.

if anything is out of control and deserves anger with torches and pitchforks it's housing prices and mortgages. I mean, look at it: Houses are so expensive that you have to take out a loan that will take 30 years of your life to pay. That means, for the most of us, we are locked into servitude for the rest of our living days. And who ever pays off a 30 year loan? My brother has so far owned 3 different houses and he has yet to stay in any of them long enough to pay off his loan for them entirely. When he sold, each time the largest portion of the buyer's payment went to the bank.

People CHOOSE to buy houses, they choose to buy because they can either pay rent and enrich someone else or they can hopefully if they're smart enrich themselves when property values rise. And mortgages worked for how many decades? and who bitched? now all of a sudden since banks have become a top enemy of the left, they're bad now.

[JohnnyReb]

I think the fruit flies have gotten to one of chillspikei's daddys' "fruits of my loins". Namely chillspike.

[Karin]

Here's a little nugget of stupidity:

pipoman  (1000+ posts)        Mon Jul-19-10 11:53 AM
Response to Reply #11
17. Yea. Where is that going to come from?
 What if an adult doesn't have a mortgage?
 

 reformist2 (65 posts)      Mon Jul-19-10 12:01 PM
Response to Reply #17
18. Print it. 
 Not to be glib, but this debt overhang is a big problem, and Obama needs to address it head on. I sure don't want to wait 10 years for a recovery.

For those without mortgages, they can apply their credit to pay down other debt. If someone has no debt at all, then maybe they could be given cash. 

reformist never learned where money comes from.  He probably still thinks babies come from storks. 

[Texacon]

Sorry Tex, but that poster you cited as a good post had SOME good points, but lost it with these:
 

Incorrect, DUmmies.  We are not opposed to taxes in general, just EXCESSIVE taxes which leads to wasteful spending, more taxes, more spending...see the cycle in motion?
 

Actually, the Dems got a bunch of sweetheart deals with deregulation as well.  Let's not forget that major bank presidents like Robert Rubin, et al, were working for folks like Citibank, etc.  And when the Dems blocked any sort of reform (Bwaney Fwank telling us that Freddie and Fannie were basically sound--remember that?) they set up the whole house of cards to fall.

You're right.  I didn't agree with all of it but thought overall it was a good post on how it all worked.

KC

[NHSparky]

I call my property taxes are over $200 more a month than my mortgage payment and I live in NJ, and the reason why people complain is because of the towns being bloated with non-necessary personnel, and the school system which is the biggest burden on my taxes, and that's because of the salaries and benefits obtained by the unions.

People CHOOSE to buy houses, they choose to buy because they can either pay rent and enrich someone else or they can hopefully if they're smart enrich themselves when property values rise. And mortgages worked for how many decades? and who bitched? now all of a sudden since banks have become a top enemy of the left, they're bad now.

Here, here.  Even at "only" $5,000 a year on my hovel, I still fail to see what I'm getting.

And someone should tell the primitive that if one is going to spend money on something, $24K a year on a mortgage 1--gets a damn nice house, 2--is better than rent, 3--beats what an equivalent in taxes returns me in the way of services, etc., from the government.

Oh, and FWIW, I paid over $35K in federal, state, and local taxes last year, not including sales taxes, cable/phone taxes, etc.  I paid less than half that in mortgage payments.

Suck it, DUmmies.

[Texacon]

Here's a little nugget of stupidity:

pipoman  (1000+ posts)        Mon Jul-19-10 11:53 AM
Response to Reply #11
17. Yea. Where is that going to come from?
 What if an adult doesn't have a mortgage?

 reformist2 (65 posts)      Mon Jul-19-10 12:01 PM
Response to Reply #17
18. Print it. 
 Not to be glib, but this debt overhang is a big problem, and Obama needs to address it head on. I sure don't want to wait 10 years for a recovery.

For those without mortgages, they can apply their credit to pay down other debt. If someone has no debt at all, then maybe they could be given cash. 

reformist never learned where money comes from.  He probably still thinks babies come from storks. 

Oh my Lord.

KC

[Mike220]

Stupid DUmmies...

Mortgages are voluntary. You are not required to have one, therefore you are not required to pay one if you don't.

Taxes are involuntary. Don't pay, go to jail.

[Freeper]

Stupid DUmmies...

Mortgages are voluntary. You are not required to have one, therefore you are not required to pay one if you don't.

Taxes are involuntary. Don't pay, get appointed by Obama to some post.

Fixxed. 

[USA4ME]

chillspike
 
Of course, he replied with talk about a mortgage being "an investment not lost money" and he mentioned the tax break he gets for having a mortgage. But it is lost money. That money goes to the bank. You only get to keep any extra left over.

Money lost?  So if he pays it, he doesn't get a house in return??

Primitives are too stupid for words.

.

[Freeper]

Money lost?  So if he pays it, he doesn't get a house in return??

Primitives are too stupid for words.

.

Yet the money they pay their pot dealers is worth it. 

[Texacon]

I don't understand how DUmmie puts the price of homes in there.  That is decided by the Buyer and no one else.  If you decide to purchase at whatever price that is your decision and yours alone.  I don't see how that could be tyrannical in the slightest.  But, that's just me.

KC