If you buy anything on credit, you are living beyond your means.

[LC EFA]

EmilyAnne  Donating Member  (1000+ posts)  Thu Feb-19-09 04:43 PM
Original message
If you buy anything on credit, you are living beyond your means.
   
Edited on Thu Feb-19-09 05:19 PM by EmilyAnne
I am so tired of hearing conservatives vilify people who are at risk of foreclosure by implying that they deserve it because they are irresponsibly living beyond their means.

Unless a person dropped a bunch of cash and paid for their house, their car, their college education and their kids' braces in full, they are living beyond their means.

It has always been up to a lender to determine how just how much beyond your means you could live. They would look at your income and do some simple calculations and, presto, you were given just the right amount of debt.

I seriously doubt that these people have "bought" homes, fully intending to just sit on their asses and not make payments because they are just lazy or irresponsible. Everyone knows what happens when you don't pay the mortgage. The outcome of eviction and the potential loss of all money invested in the house are not surprises. So, obviously, the reason they can't keep up with their payments is not due to selfishness or laziness, but rather that the simple calculations that the trusty lenders used to determine their ideal level of debt were wrong.

I don't know what the answer is to this problem. I am a renter.
Still, I don't understand the people who have no sympathy for people who are going through foreclosures.
They were misled by financial experts who were free from any government oversight.
They shouldn't have been given certain loans, but they were, trusting that the lenders knew what they were talking about.

If its not the pregnant women and children who benefit from SCHIP or the "Illegals" of California who are just flooding into our hospitals for freebies or Reagan's Welfare Queens, I guess its lazy homeowners who have brought the entire American economy to its knees. My ass, they have.

I am adding this video link to illustrate the sort of conservative BS I am talking about. Rewarding "bad behavior?" What about the Wall Street bailout?

[link deleted]

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5091827

Dummie shows they have no concept of what the phrase means.

ZombieHorde  Donating Member  (1000+ posts) Thu Feb-19-09 04:45 PM
Response to Original message
2. I am going to school beyond my means. K&R&nt

Education is normally an investment. If you realize that your degree in Contemporary Rodent Art Publishing isn't going to pay off what you spent getting it, wouldn't you think to finding a more useful area of study.

SCantiGOP  Donating Member  (1000+ posts) Thu Feb-19-09 04:48 PM
Response to Original message
5. this is what saved capitalism
   
I remember a class in college where the professor said that Marx would have been right had capitalism not invented consumer credit, that allowed people to buy major assets such as houses with their future earnings. I think your analysis is correct.

This is why tenure should be limited and subject to regular review.

Winterblues  Donating Member  (1000+ posts) Thu Feb-19-09 04:59 PM
Response to Original message
7. Bull
   
If you have the history and the means to pay back your loan then it is not beyond your means. People borrow all the time. Whether it is getting a friend to help you put up a shed on your property (borrowing labor) or borrowing a book for a report that is due. You borrow something you pay it back, no problem and it is in no way beyond your means. When you borrow something that you know will be almost impossible to repay, then that is beyond your means..You make it sound like borrowing is a bad thing. It makes the world go round and always has.

Quiet you.

Johonny  (1000+ posts)  Journal  Click to send private message to this author  Click to view this author's profile  Click to add this author to your buddy list  Click to add this author to your Ignore list      Thu Feb-19-09 05:56 PM
Response to Reply #7
15. I agree
   
Economic growth works based on borrowing and ability to pay it back.

treestar  Donating Member  (1000+ posts)  Journal  Click to send private message to this author  Click to view this author's profile  Click to add this author to your buddy list  Click to add this author to your Ignore list      Thu Feb-19-09 05:13 PM
Response to Original message
11. The lender told them they were qualified
   
A big deal is made of homeownership in this society. To the point we are encouraged to go into debt for it.

Then how they can criticize people in the midst of job losses is really unkind. Is anyone's job that certain? Anyone can lose their job. So the banks might have realized that.

It's like saying no one should buy a house if they might lose their job. So the only people who can buy one are those that can pay cash for it.

And the banking and title industries would fail, too. Automakers couldn't sell - most people take out a loan to buy their car.

Ignorant judgmental Republicans at it again. Makes me want it to happen to them - they lose their jobs, etc.

Heavens, I seem to have lost my job. Dammed if I know where I left the bastich. I'll get back to looking for it after these cheetos and bongs.

City Lights  Donating Member  (1000+ posts) Fri Feb-20-09 05:58 PM
Response to Reply #12
38. Many of our nation's fattest cats get credit with 0% interest.
   
During the campaign, Cindy McCain was reported to have almost $500K charged on an AmEx card with 0% interest. Some special card AmEx issues for the fattest of the fat cats. IIRC, it was an AmEx Centurion card.

How does that work ?

leftyclimber  Donating Member  (1000+ posts) Fri Feb-20-09 12:05 AM
Response to Original message
22. Yup. Those of us who are buying food on credit because it's the only way we can eat
   
we should all go to hell.

Never mind that the poverty line hasn't been raised since the 1960s. Never mind that it's almost impossible for people without children to qualify for food stamps, and not that easy for people WITH children to qualify. For that matter, never mind that most Americans look down on people who pay for their food with food stamps regardless of what kind of food we're purchasing.

We should all just go out somewhere and die.

That would appease those assholes.

Works for me .

[Mike220]

We should all just go out somewhere and die.

Hey, I'll help start a collection to help y'all if you really mean it.

[Texacon]

They were misled by financial experts who were free from any government oversight.

OMG these people don't know anything yet they speak as though they are intelligent.  Have they never heard of RESPA?  The Government was/is VERY involved in what lenders do.

KC

[Carl]

I guess I am an idiot because I want out of NY and to do it am trying to liquidate what I have for assets so that I can take on a mortgage within what is likely my earning potential given my skills,education...etc.

I don`t give a rat what any of them try to proclaim,unless you are a complete moron (nuff said regarding the primitives) you know that if you bring home 2500.00/ month you can`t afford a mortgage that is 2000.00/month....I don`t care what anyone tells you.

It has always been a rule of thumb as far as I knew that a roof over head should never cost more then one weeks take home pay or you have a problem.
Is that still an acceptable basis?

[DumbAss Tanker]

I guess I am an idiot because I want out of NY and to do it am trying to liquidate what I have for assets so that I can take on a mortgage within what is likely my earning potential given my skills,education...etc.

Go for it.  I had to take a job in Jersey when I got off active duty back in 91, leaving that hellhole to transfer to Missouri was one of the great days of my career.  TX is good, so is Indiana, Tennessee, Kentucky...just steer clear of Illinois.   

[Texacon]

I guess I am an idiot because I want out of NY and to do it am trying to liquidate what I have for assets so that I can take on a mortgage within what is likely my earning potential given my skills,education...etc.

I don`t give a rat what any of them try to proclaim,unless you are a complete moron (nuff said regarding the primitives) you know that if you bring home 2500.00/ month you can`t afford a mortgage that is 2000.00/month....I don`t care what anyone tells you.

It has always been a rule of thumb as far as I knew that a roof over head should never cost more then one weeks take home pay or you have a problem.
Is that still an acceptable basis?

Hmmmm well, it would work.  You do not want to exceed 2 & 1/2 times your annual gross.  This puts you at the very top of what you could qualify for (as a rule of thumb) and most are not comfortable going there.  The lenders cap most paper at 38% of your gross for TOTAL bills with your mortgage not exceeding 26% (if I remember right from my mortgage days).  Again, these numbers are not necessarily where you want to be it is just where the lenders say you can go.

Using your example of $2,000/month you would have $24,000/year or $460/week.  Using 2 & 1/2 times your gross you could go to $60,000 on a mortgage and rule of thumb on a house note WITH escrows (principle, interest, taxes and insurance - PITI) you will usually pay 1% of the sales price of the home which in this case would be $600.00/month.

Hope that helps.

KC

[SSG Snuggle Bunny]

City Lights  Donating Member  (1000+ posts) Fri Feb-20-09 05:58 PM
Response to Reply #12
38. Many of our nation's fattest cats get credit with 0% interest.
   
During the campaign, Cindy McCain was reported to have almost $500K charged on an AmEx card with 0% interest. Some special card AmEx issues for the fattest of the fat cats. IIRC, it was an AmEx Centurion card.

How does that work ?

Simple, she pays off the balance each month before interest comes due but they make scads of money off of her by selling her concierge services.

[JohnnyReb]

For 25 years I must have been living beyond my means then because I stayed in debt....... ....But it was never for food, clothes, cars, boats, toys  etc. Only borrowed for things that would make me money....or at least hoped it would.

Make that 18 years in debt......every time I got up to the point of being "broke", I felt so good that I went and borrowed more money.....

[Texacon]

For 25 years I must have been living beyond my means then because I stayed in debt....... ....But it was never for food, clothes, cars, boats, toys  etc. Only borrowed for things that would make me money....or at least hoped it would.

Make that 18 years in debt......every time I got up to the point of being "broke", I felt so good that I went and borrowed more money.....

If you are borrowing for the right reason there is nothing wrong with it.  I do the same thing you are doing.  I buy assets (mostly) on credit.  I have 9 rent homes all of which have notes on them.  Last year was the first year I had to come out of my pocket to cover some expenses but we ended up putting in 2 new A/C's and we had one rather large house sit vacant for about 6 months.  Some of that was due to remodeling that was being done on that home and it is now rented as of last week.

On the up side .... I  have about 3 of those homes which should be paid off in the next 2 years.  Wooo Hooo!!

KC

[jukin]

What the DUmbfuxs don't realize it is less than 8% of the population that, yes, did overspend. They not only got a loan for their house but extra money to get a new car/truck, RV, boat, fancy vacation...

Or there are the people that JUST had to have the stainless steel appliances and granite topped maple counters that really could afford low end appliances and Formica. 

All should check out the people that didn't buy in over their head, the renters (http://www.angryrenter.com/).

So what obama and the socialists want the 90%+ responsible people to do is pay for the irresponsible.

Obama tweak on Marx:

"To each according to their irresponsibility, from each according to their responsibility."

[BlueStateSaint]

"To each according to their stupidity, from each according to their liquidity."

Fixed.

Also, jukin, I signed the petition at that site.  Because of the ****ups who went out and bought more than they ever could afford, aided by the lenders who just wanted to fatten their bonuses based on the number of loans they wrote, my wife and I are ****ed.