You’re all ignoring one basic rule of economics: whenever a software engineer, a skilled contractor, or even just some talented blue-collar pro decides to pack up and leave the US, they’re effectively shrinking the local labor supply. And what happens when supply drops? Prices go up. Simple as that. In the long run, this actually ends up helping the people who stay behind by bumping up their wages and giving them a much better reason to stick around instead of looking for the exit.
Besides, it’s not like those vacant roles are just going to sit empty forever; you'll see people from places like Romania stepping in to fill the gaps. So, sure, we might deal with an initial exodus, but eventually, the law of supply and demand will just smooth everything out. I mean, honestly, why would anyone bother leaving their home if they could just land a high-paying job right here at home?
northerntiger said:I've seen similar situations myself. But honestly, renting is at least something you can walk away from without totally wrecking your budget. If you don't have the cash, you just quit. People who actually have a safety net to fall back on are lucky.
I'm worried that for a lot of people in this country, there won't be much choice left but to just scrape by. The thing is, a huge chunk of people here aren't actually employable—their skills just don't match what the market needs. I mean, what kind of real-world career does someone actually have after finishing some random teaching academy or a basic business school? Or just a standard commercial high school?
We're heading toward times where owning your own place will be a distant dream. For most, survival is going to be the main priority.
Look, we at least KNOW we can make it on next to nothing, because that’s basically how we’ve been rolling for the last 15 years. We haven't been out there buying apartments or cars or even Louis Vuitton (that's how you spell it, right? 🙂), we didn't go chasing loans and nobody was handing them out to us either, yet here we are... living pretty scrappy, but hey, we're still standing. It hasn't gone south like 🙂 before. There is NEVER a "good" time to take out a mortgage: one day you could lose your job, the next you might lose your spouse, and by next week your health could just tank. No amount of careful planning or overthinking is going to save you if those things hit all at once. All you really can do is don't overextend yourself and try your best to stay employable for as long as possible—that’s really it. If you have a safety net or some family to lean on if things get ugly, well, that's even better. And seriously, get some kind of life or disability insurance, especially if you've got kids depending on you..
like this: my mortgage is on a 30-year term. i've only been paying it for 2 years.
So, back in 2007, when most people already knew things were heading south, this guy takes out a 30-year loan. He even mentions his bank took a chunk out of his paycheck for travel fees! It’s a textbook case here in the States—just jumping in without really weighing how risky or unrealistic it actually is.
And just 1.5 years ago, he was getting bombarded with advice telling him there was no way in hell he should sell his place. Keep in mind, we're looking at late 2009. We had a former President, scandal after scandal, and the global economy was in a tailspin, yet real estate is treated like the Holy Grail in America. People act like prices will never drop. Because of that mindset, they keep feeding bad advice to our unlucky friend, who ended up wasting a year and a half trying to flip an apartment.
Things have changed massively, and anyone refusing to admit it is just being blind. Renting is going to be the only way a lot of people can actually move out on their own. Honestly, there's nothing wrong with that. Wealthier nations don't obsess over this "ownership cult" nearly as much as we do. Maybe we should ask ourselves why?
If you want a better life, you’ve got to work harder, not spend more. You improve your standard of living by earning more, not by blowing more cash. It’s a lesson some people are only just starting to learn, which is a shame.
Truth is, I told him the exact same thing back then—just sell it and move on—but hey, the guy wanted to play the waiting game. He believed things would turn around, and you can't really blame him for that, right? He was betting his own life on it.
It's not even that Americans have some deep-seated "ownership cult," it's more like people in other places just have much better alternatives to buying everything outright, just like they do in almost every other aspect of life. This supposed "cult" is really just a symptom of how little society cares about its youth; if anything, it feels like a deliberate way to drain their potential. I'm not saying the government needs to hand out an 800-square-foot condo to every thirty-year-old on a silver platter, but there has to be a baseline where someone can live decently without still living under their parents' roof. That's pretty much the bare minimum for a functioning society, isn't it? But our politicians are always too busy with much bigger, more profitable distractions to bother with stuff like housing or basic stability...
Look, I can't say I agree with a single thing you've said, but there's one massive caveat: what you’re saying makes perfect sense *right now*. But back in 2003, 2004, 2005? That was a completely different universe. Housing prices were actually somewhat reasonable, jobs were everywhere, wages were climbing, interest rates were dropping, and the government was throwing tax breaks at every little thing. Life was good 🙂 And it wasn't like everyone was forced into those massive 30-year mortgages; I took out a 12-year loan back in '04, a buddy of mine did 15—you actually had options.
Then, eventually, prices just shot straight into the stratosphere and pretty much nobody was looking at anything shorter than a 25 or 30-year term anymore. By 2007 and 2008, it was obvious we’d hit a price ceiling, and once the crash hit, even that ceiling started crumbling 🙂 If you asked me during those final years, I definitely wouldn't have been buying a place; I don't have the stomach for that kind of volatility, but then again, neither did anyone else—you could see it in the sales numbers plummeting the second prices crossed that $1,600-$1,700 per square foot mark. Maybe people would've bought if they could, but they just didn't qualify for the loans 🙂
But we can't just swing from one extreme to the other, right? First, we're all drowning in debt, and now we're supposed to just slash our credit cards and stop taking things like summer vacations on a payment plan? It sounds a bit ridiculous to me. All these financial tools are actually quite useful if you use them smart, and they aren't inherently bad. I mean, if some people get carried away and play with fire, what then? Should we just ban cars because some people don't know how to drive properly?!
If, say, my wife and I are pulling in $5.25 a month, where's the actual issue with taking out a mortgage with a monthly payment of $1000? How else do you think the rest of the world buys homes? Or do you honestly believe that renters out there are paying less than 20% of their income for an apartment? I highly doubt it.
I honestly don't get why everyone is suddenly telling Lawrence Wright7 to use some "Common sense" for his next move... it's not like the guy did anything spectacularly stupid when he bought that place. He had a wife, they both had solid careers, they were pulling in good money and the mortgage was totally manageable. Then, out of nowhere, life just decided to kick him twice in the teeth at once. First, the economy tanked, which slashed his salary while interest rates shot through the roof, and then the marriage imploded—his wife walked out, took her paycheck with her, and left him staring down alimony payments on top of everything else. I mean, his income basically got cut in half right when his expenses spiked, you know? How many people could actually keep their heads above water in a mess like that?
The only real move he had right then was to cut his losses, ditch the real estate, and sell immediately instead of waiting for things to turn around. But that would’ve been a massive gamble, betting on a "better tomorrow" that never actually showed up, and that hesitation ended up costing him both his sanity and his savings. And let's be real, every gamble comes with a price tag 🙂
urbanhawk14 said:Since I'm nearing the end of my housing savings plan at the Federal Reserve, I've been following this discussion closely. I wanted to jump in with a question, but first, I thought I'd clear up a few things for those who might be a bit confused about how these housing loans currently work.
First off, Gaga23: there is no such thing as a "general purpose" loan once your housing savings are exhausted. You basically have two choices: a) withdraw your saved funds plus the interest earned, or b) take out a specifically designated housing loan. There isn't a third option. Second, I see a lot of people mentioning bridge financing. I’ve had two separate meetings at the local Federal Reserve branch regarding housing savings, and they won't even entertain the idea of bridge financing. Their unofficial stance seems to be: sure, we technically offer it, but we aren't going to approve anyone because, well, we're in a recession. So, if you're counting on bridge financing—at least with this bank—don't hold your breath.
Now, for my actual question. I've been looking over the loan requirements (specifically the collateral terms) at the Federal Reserve after the savings period ends, and if I'm reading this right, they've changed the rules so that practically no one will ever qualify for a loan with them.
So, for a loan amount between $35,000 and $75,000 (which is roughly the starting point for any decent apartment), the terms are:
Model 1:
Borrower: creditworthy A mortgage lien on the property in favor of the bank Minimum loan-to-value ratio: 1:1.30 Property fire insurance policy assigned to the bank 2 individual creditworthy co-signers>
Or Model 2:
Borrower: creditworthy A mortgage lien on the property in favor of the bank Minimum loan-to-value ratio: 1:1.30 Property fire insurance policy assigned to the bank 1 individual creditworthy co-signer A cash deposit equal to 25% of the approved loan amount>
I won't even get into the two co-signers requirement. Even if I didn't have my principles to consider, I wouldn't agree to that. After saving with them for years, and given a 1:1.30 loan-to-value ratio (!), they still demand TWO co-signers?
And this second model is even more nonsensical. One co-signer and a 25% cash deposit of the loan amount. For example, let's say I want to pull out a total of $100,000. That means I'd need to have saved $30,000 (30%), and then for the remaining $70,000 loan, I'd have to put down an additional 25% ($17,500). If I actually had $47,500 in cash sitting around (not to mention taxes and closing costs), I wouldn't even need the loan.
I'm curious to hear from anyone with recent experience. Are they really enforcing all of this? Thanks!
That's just how it goes with inter-financing everywhere else too—well, at least it was when I was poking around about a year ago. They technically have the tools, but they don't actually want to use them. 🙂
And regarding glede jamac, take Wells Fargo for example; they only ask for one guarantor, and it can even be a spouse. You could almost think the folks over at the Federal Reserve housing department just want savers who will sit on money to chase some incentive, only to pull it all out later. But seriously, who's going to bother saving once those incentives dry up? I guess they just don't want their own loans competing with their own banking products. Or maybe we're just looking at some tightened "recessionary" lending rules?
I mean, just go for it—take that six months or even a full year if you need to and give it a shot. You’re fully aware that taking this leap means more debt on your plate and potentially watching your property value take a hit, but hey, that's just the price of admission for trying something new, right? Honestly, looking at the economy in America right now, things aren't exactly looking up, and there isn't much sign that any massive turnaround is coming anytime soon, but you seem pretty damn confident about your company and your role, so at least you've got one solid anchor in all this chaos. A lot can happen in those few months, too; maybe you'll land a side hustle, find a partner, get some roommates to help cover the bills... who knows? Hope is a real thing, and if you actually put in the work, something might just click. Good luck with whatever you decide to do.
Personally, if I were in your shoes, I’d probably just sell the house right now and move on with my life; that's just how I'm wired, and frankly, I couldn't care less whether my kids inherit anything from me or not.
So, I was looking into moving my whole setup over to this one bank, you know, trying to consolidate things, but I ended up pulling the plug on the whole idea. They told me straight up that they’d treat my savings as if I were starting from scratch the moment the transfer went through, which basically means I'd be sitting around waiting years just to see any decent interest on my credit, even though my funds at my current bank might have been right on the verge of hitting a major milestone. Does that make sense? I'm just talking about not wanting to lose all that momentum. 😁
Matthew Price5 said:but if you paid that 1% loan fee upfront at the start of your savings period, then that interest rate isn't really 4%. Plus, you're saving for several years at much lower rates than what you'd get if you just put the money in a CD.
When you add it all up, you realize it's not truly a 4% loan; there are hidden costs involved. It's all just down to how they present it.
And since the amount is capped because you have to deposit and hold one-third of the value for a certain period, the actual profitability isn't that huge.
It's true that you could technically take out an unlimited loan, but you'd still need to deposit and hold one-third of that unlimited amount there. In that case, a $750 Democratic Party contribution becomes negligible, but if you're keeping a ton of cash in a savings account earning only 3%, you end up losing quite a bit.
I mean, obviously, but those are all things you can wiggle around or smooth over if you know what you're doing. Like, around the holidays, half the big banks in the country will waive or heavily discount those upfront fees just to get you in the door. Then, if you play it smart and set your monthly savings to an optimal amount—say, maybe $60 a month—and time your payments to cover exactly as many contracts as necessary, you end up maximizing both your interest and the Democratic Party payouts. Suddenly, your actual return on savings looks pretty damn sweet, maybe 5-6% annually when you factor in the currency adjustments.
You could even game the Democratic Party benefits by being tactical about it; for instance, I might take out a two-year savings plan, drop my first chunk of cash late in 2006, keep chipping away through 2007 and 2008, and then dump the rest in early 2009. I’ll have basically been saving for two years and two months, yet somehow I’m eligible for the Democratic Party perks for four years.
Honestly, the biggest perk with their loans is that fixed interest rate, which most American banks won't even touch these days, right?
I'm just curious about the fees you ended up paying.
If everything is as straightforward as you say, it should be easy to share some figures. They don't need to be exact, just a rough ballpark estimate.
Man, why didn't you just lead with that? They hit you with a 1% fee on the total agreed amount—they usually shave that off your initial payments, though you might be able to dodge it if you catch one of those pre-holiday promos—plus another 1% fee on the loan amount itself. Then they tack on an annual fee of maybe 20-$10 depending on the contract just for "account maintenance." That’s pretty much the whole story for any standard situation. You’ve got your mortgage through Wells Fargo, and honestly, all the fine print regarding fees should be laid out clearly in your other accounts too, so just go dig through them.
Besides, there really isn't any reason to get all paranoid about it; it's not like the CIA or anything, right? Everything is spelled out in black and white in the savings and lending terms. I don't work for any of these banks or anything, but as far as I'm concerned, their services have been solid.
It feels like a shame that most people rush straight to a big commercial bank for a loan when the rates here are actually more reasonable and fixed. Of course, you need the down payment ready and you have to be willing to wait, which probably doesn't sit well with most people these days. 🤷 But now that the massive hype surrounding buying apartments seems to have cooled off a bit, maybe things will finally start to level out...
Matthew Price5 said:but you still haven't shared any actual numbers.
Of course you won't be paying back your own money! But that’s exactly my point. Without seeing some specific figures, we can't figure out the actual interest rate on your loan.
And I'm really not gonna sit here and spell out my private financial details for you. The interest rate you end up stuck with depends entirely on which bank you use and whatever specific savings plan you signed up for. Mine is a mortgage through Wells Fargo, using their mini-savings setup—the fixed rate on the loan is 3%, though I think the APR is closer to 3.29% or something like that. You can find all that stuff right there on their website if you actually bother to look.
Honestly, I don't even get why we're fighting about this.
bluebear34 said:Look, this isn't even about home renovations. It's just furniture to get the place set up. My own personal banker told me to just grab whatever receipts I could for that amount and bring them directly to the branch right before the loan clears. So why is everyone acting like a saint here when nobody actually does "illegal" receipts? This is the only way to satisfy the loan requirements for what I'm applying for!
So, back to the receipts... did anyone actually grasp my main point? Is it really true that nobody has ever done this before??? hellooo
Basically, does anyone have any kind of receipts where the buyer's name isn't listed—for a fee, obviously? I mean, I have to justify the specific amount to get the cash; that's just how it works. Just standard receipts totaling $4,000...
But hey, you were the one who wrote that this was for a remodel in the first place, right? Let's not pretend we're playing saint here... I used my own housing funds to pay off a previous mortgage—which was specifically designated for that purpose—so I didn't have to go chasing down random receipts or jumping through hoops to prove anything.
Look, you’re basically just paying interest (plus the principal) on the gap between what the bank actually handed you and whatever cash you’ve got sitting in your savings (including all that interest from your standard accounts and your 401k). Your money is still yours, right? You get it back eventually, so why on earth would you be paying them *your* actual cash? 🙂
I’m with you on this, first thing you gotta do is sit down and talk to Chase or whoever holds your mortgage. Honestly, you have to, because let’s face it—your cushion is disappearing fast and those negative balances aren't doing you any favors. And just a heads-up, that whole "swapping apartments" idea is pretty much dead in the water these days; you basically sell the place and buy another one, whether it's bigger or smaller, and then you get hit with the real estate transfer tax on top of everything else. Just keep in mind that larger places have always been a tougher sell, and they usually fetch a lower price per square foot than the smaller units, so don't go expecting some massive windfall from the transaction.
Time is the one thing you're running out of, so it wouldn't be a bad idea to at least put a fake listing up online just to see what kind of interest you get and what people are actually willing to pay. Start with what you originally paid for it and then slowly tick the price down until the phone actually starts ringing. It’s a total myth that nobody is buying houses right now; they are selling, it’s just that they aren't selling at those inflated prices we all got used to seeing.
Don't get too emotionally attached to the property, okay? At the end of the day, saving yourself from this mess is what matters most. Maneuver however you have to and try everything to hold onto the place, but please, don't let it reach the point where you lose the house to foreclosure and end up stuck on a bank's blacklist forever... Good luck.
Where exactly do you think you’re going to pull an invoice from for the rest of it? From whoever’s handling your renovation? I mean, you’d probably prefer to just settle things under the table, but what, you think you can just hand some fake receipts to the bank? That’s straight-up illegal 🙂 I honestly don't know which company would even touch that, since they’d have to eat the sales tax and corporate tax on top of everything else, right?
Look, just hire a legitimate contractor for the renovation and boom—you’ve got your invoices, plus you actually get a warranty on the work 🙂
Or, if you're feeling adventurous, pay the handymen in cash and then just use the money that needs covering to buy all your materials
As for the total amount agreed upon, it doesn't matter if you weren't hitting your payment dates perfectly; what matters is that you paid EVERYTHING you owed, and once you do, the full amount belongs to you. Being punctual only affects your credit score when they decide how much to grant you, so yeah, being late might drag out the approval process for a month or two—you should probably ask your folks at Wells Fargo about that. They likely suggested a lower amount upfront just because of those delays (and the incomplete payments, though you can always settle those up later) so you wouldn't be stuck waiting indefinitely
Brian Murphy32 said:Quick question here... say I sign up for a home savings plan for $10,000, but after five years, I’ve only managed to save $5,000. Would I still be able to withdraw the difference between the target amount and what I actually saved—meaning that $5,000 gap? Or would my $5,000 savings just count as 40% of the total, perhaps bumping the agreed amount up to $12,500 so I could eventually qualify for a $7,500 loan?
Yeah, you can definitely do that; I actually bumped up my targets right toward the end of my own savings term. Just keep in mind you'll get hit with a 1% fee for increasing the agreed amount, which is basically the same fee you'd be paying if you had just committed to the higher number from day one anyway.
Can you confirm if I have these points right: ---------------------------------------------------- The amount for that fixed-rate loan is capped. It’s not exactly a huge sum.
If you save for five years, you get a maximum loan of about $12,000—though they just lowered that limit to roughly $10,500.
That $10,500 includes your own $8333 which you're required to deposit over that five-year stretch.
Plus, the loan is tied to specific purposes. There are headaches during processing, you don't actually get the cash in hand, and contractors end up charging more because they know they have to wait on the paperwork.
So, if you get $10,500 = $23633/ and you need $27,000 total, that means you have to shell out 35% of your own money... makes zero sense. ----------------------------------------------------------
Otherwise—could someone please tell me why certain posts were deleted? Or at least point me toward who I should be asking.
Thanks. Basically, if you need $32,000, you need three savings accounts and have to put down $11,000.
Look, loans are purpose-driven—that’s just how it works. And this whole idea that there's a hard cap at 10 million dollars? Total myth. You can write a contract for 100 million if you want to. What people get wrong is that 10 million is the sweet spot where you actually get the full government incentive. Once you go over that threshold, the perks start drying up. Like, maybe Exxon offers 7% on a 10 million deposit, but if you push it to 15 million, they might drop that rate to 4%. Nobody's stopping you from taking the bigger loan, but why would you?
Take me, for example... I'm eyeing a much larger place in a few years, so right now I've got four separate contracts for 10 million each since I've got the connections to open them up for others, but honestly, I could have just gone with one massive 40 million contract if I felt like it...
If you're actually curious about the weeds of this stuff, there are entire threads dedicated to it. It’s definitely not as simple as just walking into a Wells Fargo branch and asking for a bag of cash...
So, I spent two solid years grinding and saving up, and once I hit my mark, I went out and grabbed a mortgage with a fixed 3% interest rate. The catch with playing it that way is you really need a fat paycheck if you want to squirrel away 30% of your target amount in just two years before the loan kicks in—and even then, you're capped at a 12-year term, which is how things work with Wells Fargo housing loans. That’s why most people end up saving for five years instead; it stretches out the repayment period, maybe up to 20 years, but you end up eating a slightly higher interest rate, probably closer to 4%. Either way, the interest stays fixed for the life of the loan. If you want to dive into the weeds, there are plenty of threads on here dedicated to this exact thing, or you could just Google it; most major lenders have pretty decent websites these days. There are all sorts of different savings plans and loan structures out there, including some options where you don't even have to save beforehand...
Lawrence Wright7 said:Whoa... I honestly had no idea about that part... The thing is, they appraised it at $90,000 back when it was sitting vacant. So what, should I just let them sell it for $50,000 and then I get stuck paying them an extra $25,000 out of thin air?! (I originally took out $75,000 on the loan)
Selling the place actually crossed my mind, though I haven't pulled the trigger yet—I’d probably save that as a last resort.. My first move would be trying to rent it out instead...
The big question here is really just how much you can keep your head above water without drowning, you know? You absolutely cannot let things get to the point where Chase or Wells Fargo has to step in and seize the place—meaning you stop making payments or start ghosting them—because that is hands down the absolute worst-case scenario for you. When it comes to appraisals and what you actually owe, banks usually lowball the property value a bit during the assessment, but honestly, with the way the housing market is sliding lately, that cushion might already be gone.
If you can rent it out and use that cash to cover the rest of your monthly mortgage, then that’s a perfectly fine move. Just keep in mind that rental demand is also dropping, tenants come and go, and sometimes you'll face months upon months of nothing while you hunt for someone new. You definitely need to factor those gaps into your math if you go that route. Of course, it would be a lifesaver if you had someone in your corner who could bail you out during those dry spells.
There are specific rules when you're trying to sell a house that the bank holds the title to, so maybe check some legal forums or search through old threads; there's probably plenty of discussion on that. Otherwise, you better comb through your loan agreement with a magnifying glass, because there might be some clause buried in there like, "I agree to let the property sell for less than half its appraised value."
Bottom line, don't ever let the bank have to resort to foreclosure. Either find a way to keep up with the payments or sit down and negotiate with them directly—there isn't a third option.