Does the record amount of homeowners now look like a record amount of suckers?

Question

Why do you think that homeownership is so high? Do you think most of these people will be homeowners in a few months or a few years. I do not mean to use the word "suckers" in a bad way. I just want to know if you think thse people were tricked (either tricking themselves, or tricked by slick salespeoples) in to thinking that they could afford the home that they bought.
Or do you think that this is not the case, and that most of the new homeowners are comfortably paying their bills and will be ok?

Answer 1

People don't understand that capitalism is ALL about making money. So, those realtors who SAY they are looking out for you are looking out for their commission. The lower your purchase price the less they receive in commission. Who do you think they care about?

Lenders are in the business to sell you money. They make their money in two ways:

1. By getting you to agree to borrow MORE money and
2. By getting you to agree to borrow it at a higher interest rate

So, yes, MANY people who THOUGHT they could only "afford" a $150,000 home are pleasantly surprised to hear that they can afford a $230,000 home. Flattering, isn't it? The lender doesn't care if you have to cut back on EVERYTHING you do today to make that payment, they are looking at for themselves. People sign up for such loans every day.

In fact, the stock market surged today (on news that oil prices had dropped), but was down almost 1,000 points over the past 2 weeks on just such lending fears. People ARE defaulting on their loans! People ARE in over their heads.

Are they suckers? Maybe. But capitalism is all about making us all suckers. There is sooooooo much fine print, soooooooo much lying, and sooooooooo much hype and hard selling that it's hard not to be a sucker once in a while.

Answer 2

I think many people make the biggest investment of their life with very little knowledge and allow others to sway them into something they really can't afford. I'm not saying that pushy salespeople are off the hook for their behavior, but in the end buyers need to take the time to learn about loans and home ownership and what they can truly afford before they sign anything. I have large rental apartments and you should see the look on people's faces when I tell them they don't make enough money to live there. What are they thinking? And then there are the renters that try to give you cash or a money order because they can't use a checking account. These are the people that go out to buy and end up losing. There are many, many people that are paying their house payments-maybe not comfortably but they pay regularly. And there are those that buy what they can afford. . .

Answer 3

It has nothing to do with suckers. It has a lot to do with not doing your homework about purchasing a home. Educate yourself. A Realtor will tell you what you can afford. Right off the bat I will tell that that figure is bogus. It is an inflated figure. The actual figure scares away potential home buyers because reality sets in and they realize that they can't afford it. So mortgage companies have moved the bar for what a home owner can afford. WRONG. Borrowing your way into debt is not the route to take. Here is my advice. 28% of your income should be what you can afford. Anything more then that and you won't be able to pay other debts that you might incur or you will be eating a lot of boxed macoroni a cheese. You'll go to the movies once every couple of years and you'll avoid going to birthday parties. Lastly, the housing market is vastly overpriced. You are paying for poor quality at premium prices.

Answer 4

I assume you ask this question because you are responding to the chaos that is now the sub-prime mortgage market and the increase in the foreclosure rates. Home ownership is one of the premier ways in America to accumulate wealth and financial security. Unfortunately, in the very recent past, mortgage products that were made available to the consumer were used by mortgage brokers and consumers who acted irresponsibly. While the products did allow many consumers to purchase homes who would otherwise not have been able to, it is also the case that many consumers who were motivated by greed, ignorance, unethical sales people or some combination of the above, find themselves in a financial jackpot of sorts. In the end it is better to own than not to own - but only if the terms and costs of doing so are affordable to the borrower.

Answer 5

oh come on , done blame the salesman , everyday people sell to people , and the buyer feels robbed , when the salesman could not know how the market would react , it is up to the buyer to agree , by matter of payment , and this in itself is an agreement to the amount the buyer .