this post was submitted on 03 Feb 2024
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I honestly just think it's ignorance and/or plain idiocy. One of my closest friends who's not dumb by any means, bought a home with his gf when homes were highly overvalued but loan rates were still on a record low (European country). I asked him if it was really such a good idea and if they couldn't just rent or keep living seperately for a while longer - but no.
Well, when everything caught up and their rate doubled all of a sudden it's hard to make their economy work (luckily they get by and are both educated but the rates can't go much higher before shit hits the fan).
He later had to get a new car and could barely afford a 20yo used car and complained that it's hard to have money left after all costs of living and I, like a good (bad?) friend, discreetly (not very much) brought up the fact that I "told him so". His response was "yes I know but those are the rules we just have to play by and it's out of our control".
So, what you're saying is... Is house rates went up on his mortgage right?
And because of that he became poor?
So you're saying your right with the assumption that if he rented his rent wouldn't also double??
Yes?
Okay, wow.
You do know rent is just someone with a mortgage on a house too right? (Paid off or not)
And if that landlords mortgage goes up, that will also make the rent they charge go up. ( Often far more than the rent, as it's percentage related. So, if your friend was renting, he'd be even worse off...
Firstly, apartment complexes and the likes are usually owned by bigger companies with more leverage when negotiating loan rates compared to individuals. Secondly, renting a small apartment while holding on to their down payment money / saving even more is clearly gonna be cheaper than buying a 2 bedroom home in the middle of a city.