Hear about how much debt everyone in the US has all the time, curious about some of your stories!
My bad debt is 10k left on a school loan from a for profit school that is now out of business.
Only other debt is house.
So how are you all doing with debt management?
Yes. Today you’ll hear people online talking about how mortgages are unaffordable. If they somehow decided to apply anyway the bank would reject them.
The difference between now and the years leading up to the 2008 crash is that loan officers would have given people those mortgages despite the payments not being doable as you said.
A lot of banks were offering variable rate mortgages that had lower interest for the first few years of the loan and advertised this lower monthly payments. This would get applicants in the door. When they asked about the later interest increases (that would bump the monthly payments higher than they’d be able to afford) they were assured that they’d be able to refinance their debt.
This and other shady sales practices are not happening today largely because federal regulations and oversight placed after the fact.
The TL;DR is that the math on mortgages doesn’t check out for a lot of people. In the early 2000s banks were more than happy to give you a mortgage anyway. That simply isn’t happening right now.