No, the bank will not give me a mortgage because I have no car nor anything of value, don’t have enough cash, and they don’t want to take a risk. So I’m stuck renting apartments the price of a house. Capitalism is a wonderful system!
Here in Denmark it’s normal to pay 6 months rent before getting the key. (3 months rent plus deposit equivalent to another 3 months.)
However, the market here is very different.
1: I believe it’s very easy to get a bank loan for this. If they say no, it’s because you can’t afford the rent. (I could be wrong here.)
2: The contract isn’t locked for 12 months or so at a time. You can cancel the contract at any time, effective from the last day of next month. Also the contract doesn’t expire after 12 months, generally you live there as long as you pay for it.
3: Many other details that means that landlords aren’t the enemy, they provide a service for people who can’t or doesn’t want to own and maintain their own property.
That all sounds reasonable. Alas, such notions are not within my grasp. Still, good to know some pockets of humanity have adopted a semblance of “the needs of the many”.
I haven’t heard about this “3x payment per month.” Back in the 80’s, I had to come up with first & last and a security deposit equal to one month’s to get in, so 3x for the first payment, but that was only one time and it covered… the first and last months and we got the security deposit back when we moved out because we’re didn’t trash the place.
3x payment per month just sounds like they’re charging 3x the rent they’re advertising.
I think they mean a ‘debt servicing’ type thing, where you need an income of 3x the rent per month?
Oh. Yeah, that makes more sense.
It’s to keep the landlord from renting to housing-stressed tenants. Spending >30% of a household’s monthly income on rent is housing stress. 3x is just easier to say.
Nah because they can’t afford a down payment.
This. I was only able to get my first house after college because I did one of those “down payment side loans” and my folks gave me a couple grand as a kickstart.
Nowadays the only way I can afford a house that’s not smaller or on true shit condition is because I had 17 years worth of equity in my previous house and put a huuuge DP down.
… put a huuuge DP down.
Giggity.
It’s all a predatory vicious cycle.
First time homebuyers don’t need a down-payment in the US. But payments will be much higher so it’s usually out of reach regardless.
You do need a down payment, it’s just much smaller, like 3.5%.
Down payments are meant to gatekeep the poor from ownership so that landlords can continue to exist.
I had all kinds of benefits thanks too the native American home loan program and my income was more than sufficient to purchase a much larger house than I did but even buying one of the cheapest houses in the neighborhood, my down payment was $22,000.
If I had not had 22,000 on hand I could not have bought the cheapest house in the neighborhood when it cost less than three times my annual salary.
I bought my first home with an FHA loan, 3.5% down was only $5k. Today that’s $15k for a median home, three times the median savings of a person under 35.
Mortgage payments are typically significantly larger than rent for the first ten years. It takes a long time for a mortgage to start making sense, unless you bought in 2019, then it took like a year to double your equity.
Or if you bought in 2009, that was also a pretty good time to buy. (My mortgage was cheaper than my previous apartment rent on day 1, too.)
True. I have a friend who bought in 08, and it took ten years for him to not be upside down. He still lives in that house though, and it’s worth way more than he paid for it now.
I have another friend who bought in like 2016, and when the market exploded in 2020, he was able to get out from under his PMI.
