I agree with you 100%. When we bought our first house 30+ yrs ago, we bought what we could afford on my income alone even though both of us worked. When we bought our second home 10 yrs later, we did the same thing and upgraded to a 2400 sq ft place but still stayed conservative on the financing so it would be paid off in 15 yrs. We bought it in 1987 and credit was tightening up and the only way to finance was with an ARM. We didn't like it, but negotiated a 5 yr ARM with a cap on the interest rate. We calculated the worst case scenario on the ARM to make sure we could still afford it and monitored the fixed rates for the next few years. When credit loosened up, we converted to a fixed rate and then paid it off in 15 yrs.
During that time, lots of people we know bought "trophy houses" or "McMansions" that cost a lot of money to maintain in taxes, heating & cooling, furnishing, landscaping, etc and we just shook our heads wondering how they could afford it. Those same people now have thousands and thousands of dollars in credit card debt, are upside-down on the big SUV payments and are blaming everyone but themselves. Just look at some of the cable shows on home makeovers. It's not unusual to have $100k plus on a kitchen remodel or $50k plus on a bathroom remodel. They are beautiful to look at, but who needs a $1000 dollar kitchen faucet? Or who needs a $50K Cadillac Escalade to get to/from work?
As you say, no one held a gun to those young couples buying a $350k home. The "predatory lending" theory is a "red herring". I don't blame the lenders but I also don't feel sorry for them. Example: The 90" year old lady who shot herself was given a $45k mortgage and an equitly line of credit 4 yrs ago. That transaction alone lacks common sense on both sides. Now Fannie Mae gives ther the house and forgives the mortgage. Guess who really picks up the tab? You and me as taxpayers. I'll bet there's a lineup at local ammo dealers of senior citizens buying handguns, shooting themselves in the leg and then expecting to have their medical bills paid by Medicare and their mortgages written off. :lol:
It all boils down to people living beyond their means, crying "woe is me" and epecting others to pick up the tab. However, I'd bet that most of the people that read this forum are salt-of-the earth, fiscally conservative types and you're preaching to the choir, Goose.
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