@ptatohed wrote:
I think the first 20% of the article actually matched the article's title. Then it turned into 'Be prepared if your marriage fails' doom and gloom advice.
I also didn't understand the subheading 'Your Spouce's Credit Score Can't Impact Your Finances' and then it goes on to say that one spouse can cause a mortgage decline or higher rates.
Be prepared if your partner sabotages you, does dumb things with money, and/or you live in California and community property applies.
Ermmm, didn't marry a saboteur, I handle the finances and he's okay with that, not in California.
I think we're good!
But married people often buy houses and then become house burdened. And that is a problem.
One spouse's credit doesn't typically affect another's personal financial decisions, however it can affect a mortgage or a joint car loan.
The lowest credit score out of the two is what the mortgage lender will be looking at, so with a bankruptcy weighing me down I've probably got to sit this out for at least another couple of years. Then again, with the housing prices where they are, and the Fed where it is, it wouldn't be happening anytime soon anyway.
I saw a thing the other day that said there's 27.4 empty homes in America per homeless person. It wouldn't surprise me that in a country that pours bleach on food that gets thrown away to keep prices up if housing inventories have something similar going on. Can you even imagine 17 million homes going on the market all at once? There'd be a riot involving all the people who were told their home was valuable suddenly see it plummeting.
During 2008, my mother had a neighbor who tossed his keys in the mailbox. Wells Fargo foreclosed eventually, but by then the home had been vacant for so long without being winterized, it had been broken into and vandalized by teenagers, it had a tree land on top of it during a storm.
By the time the bank did anything with it, it had to pay the city to come out and demolish it. A few years prior it had been a perfectly fine "owner"-occupied house. They call people "owners" while they make 30 years of payments to a bank based on a job they think they'll have. The bank doesn't do anything when something breaks, and all the weird noises you hear at night are the entire house breaking.
Twice a year, the government decides how much it wants in taxes. In Illinois, that'll probably come out to about $8,000-$9,000 on top of the mortgage, and it won't end even if you ever do pay the mortgage off. That way when you get your itemized bill, the library that swears they saved you $78 that year actually costs $519, and the forest preserve that's essentially a swamp with some snakes and weeds and police force and board of directors with six figure salaries and pensions costs $783. Totally worth having to defund your children's college savings account to pay for, you know. :/
You also have to mow the yard, grass, which is the dumbest crop anyone ever decided to plant, and pay for homeowner's insurance to protect the bank, also you if someone breaks in to steal from you and slips and twists their ankle and sues. It's really fun, you know. Then if you can't come up with 20% of half a million dollars for a starter home, they'll charge you "PMI", or "mortgage insurance" in case you default, but you'll still be sued if you default.
Even having to pay PMI is your first clue that you're broke and shouldn't be buying a house, because you're too broke to cough up a reasonable down payment, so now the house will cost even more, and you can't cancel it until 21% of the principle is paid off, and that's with a letter to the lender via certified mail that they might try to say they lost unless you hire an attorney. You can afford an attorney, right? Of course you can. $600 an hour to send letters? Pshaw! That little thing? Then many people just forget they're even paying it and never cancel it.
Many people who "buy" a home can't even begin to afford it when they sign the loan regardless of whatever their credit is, but anything wrong with their credit will only make it worse.
When my FICO score was 806 and a 30 year fixed rate mortgage was 3%, I knew I'd never be able to buy a home. With a bankruptcy and mortgages for people without one running at 7-8% and housing prices doubled due to inflation mostly, I have given up the "thought" of maybe someday owning a home.
If I even got started somehow now, I'd be 70 if I ever paid it off. I'd probably end up like nearly everyone and be tempted to "tap" the equity, setting the date back to "not while I'm still alive" and pay interest on that too when other expenses came up.
Then when they wheeled me off to the old folks home someday after I lose my mind and can't handle my affairs, Medicaid would claw back the house to pay for it. Regardless, I'll have no heirs, so why does it matter what I leave behind?
It's like having children. When most people don't do it right, why do I think I would do better? Many couples are looking to buy a house they can't afford and otherwise wouldn't need because they need room for children that cost about a million dollars each that they'll have to find somewhere.
I see things like homeownership through the lens of "on a long enough timeline, you always lose". You throw an enormous amount of money and then someone figures out how to take it away.
It's easier, especially as a couple with no children, to save money by not buying a house. Let your landlord worry about all the incidental things that come up, let the apartment complex spread the financial pain around.
Mortgages are a relationship killer. They suck your bank account dry between that, repairs, taxes, "insurances" that go up if you ever use them or protect the lender and not you, and the constant temptation to "tap" the equity and ruin what you've already accomplished, usually to put out other financial fires caused by having all of this in the first place. Mom's "owned" four houses, lost all of them, and lives in an apartment owned by a slumlord now, and she's nearly 70.
What could have been done without these toxic ex-husbands, the mortgages, the fights about money, reversing their progress with HELOCs, and then bankruptcy? We'll never know, but we can make an educated guess.
At a certain point, income ceases to matter much because if you "drill a bigger hole into the bottom of the boat", you can make all the money you are likely to and still be broke and have a lot of banks calling wondering where the payments are.
My in-laws are working professional six figure jobs, each. They're working 70-80 hours a week due to their house, their maxed out credit cards, the two kids they shouldn't have had, and the three car payments. They decided, somewhere in their brain, that they would buy three expensive flashy impractical vehicles, including a $90,000 BMW for their 16 year old children.
As a result, their net worth is less than nothing, despite earning 8x what me and my spouse do.
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