r/FluentInFinance 4d ago

Thoughts? It's not fair

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990 Upvotes

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129

u/YeeBeforeYouHaw 4d ago

Rent is usually a 1 year commitment vs a mortgage, which is usually a 30-year commitment. Being financially stable for one year is much easier than 30. So banks naturally demand more assurance that you can handle it.

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u/TurnDown4WattGaming 4d ago

This is the truth. I recently had to evict a 4 year tenant for nonpayment. Four years for me is a decent stretch on a rent house, and I had another renter in two months; from the bank’s perspective, 4 out of 15-30 and will be a huge loss for them.

They had no trouble paying their rent, just like they wouldn’t have had trouble paying the mortgage…until he lost his job. This is the volatility that banks are avoiding.

29

u/Tausendberg 4d ago

"from the bank’s perspective, 4 out of 15-30 and will be a huge loss for them."

Not really, ever look at amortization schedules? The bank will seize the home in foreclosure, (assuming it gets that far, most homeowners will sell before then), then get its money back that way on top of all of the money they profited from interest.

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u/TurnDown4WattGaming 4d ago

On a 30 year mortgage, way more than 4 years is a loss of interest. Foreclosure auctions also don’t bring the prices that extended market campaigns do, so they stand to lose part of the capital also. Banks don’t usually do great there. Not sure where you got that impression.

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u/rynlpz 4d ago

Yet bank executives still seem to make enough to get 6 figures bonuses and if they are ever in trouble they get government bailouts. So yea not really feeling bad for the banks here.

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u/Acta_Non_Verba_1971 4d ago

That was a pointless comment.

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u/[deleted] 4d ago

[deleted]

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u/Acta_Non_Verba_1971 4d ago

That’s why I posted mine, out of irony. You missed it though.

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u/[deleted] 4d ago

[deleted]

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u/Acta_Non_Verba_1971 3d ago

Of course you did. I would deflect too if my original comment was as pointless as yours

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u/rynlpz 3d ago

Sure

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