Does anyone understand this

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MemberSince99
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Does anyone understand this

Postby MemberSince99 » Tue Jun 21, 2016 7:19 am

I read on some credit site that having a mortgage boosts your attractiveness to lenders because quote they know that this requires more skill.

Well I've been paying a mortgage for almost two years and have yet to see how it takes more financial skill than paying rent.

In a way you are now renting from the government instead of a private landlord. You don't really own it that's just an illusion you will do or not do whatever they tell you and pay whatever they demand or you will be removed.

But it's the skill part I don't get. All I can figure is they mean it will be a burden to keep up with the on going repairs?

Not sure I see it otherwise. Does anyone know?


thom02099
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Re: Does anyone understand this

Postby thom02099 » Tue Jun 21, 2016 8:51 am

MemberSince99 wrote:I read on some credit site that having a mortgage boosts your attractiveness to lenders because quote they know that this requires more skill.

Well I've been paying a mortgage for almost two years and have yet to see how it takes more financial skill than paying rent.

In a way you are now renting from the government instead of a private landlord. You don't really own it that's just an illusion you will do or not do whatever they tell you and pay whatever they demand or you will be removed.

But it's the skill part I don't get. All I can figure is they mean it will be a burden to keep up with the on going repairs?

Not sure I see it otherwise. Does anyone know?


Seems like the only "financial skill" a mortgage may require would be the freakin' hoops one needs to jump through to get one. A lot different than the "drapping" that goes on at some credit sites :)
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takeshi
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Re: Does anyone understand this

Postby takeshi » Tue Jun 21, 2016 9:39 am

I don't see how skill is relevant. Qualifying for one can be more difficult and mortgage lenders tend to scrutinize a bit more. We just recently went through the process with Chase and they required a ton of documents from us. Part of that was because my wife is commission only but credit cards and auto loans, for example, didn't require anywhere near the same level of scrutiny for her.

MemberSince99 wrote:I read on some credit site

Which one? As always, consider the source. Sites don't all have the same level of quality, knowledge, etc.

TXviking
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Re: Does anyone understand this

Postby TXviking » Tue Jun 21, 2016 11:57 am

MemberSince99 wrote:I read on some credit site that having a mortgage boosts your attractiveness to lenders because quote they know that this requires more skill.

Well I've been paying a mortgage for almost two years and have yet to see how it takes more financial skill than paying rent.

In a way you are now renting from the government instead of a private landlord. You don't really own it that's just an illusion you will do or not do whatever they tell you and pay whatever they demand or you will be removed.

But it's the skill part I don't get. All I can figure is they mean it will be a burden to keep up with the on going repairs?

Not sure I see it otherwise. Does anyone know?


Paying a mortgage over time helps show you're a dependable borrower. A mortgage is an installment loan with a fixed payment every month, and that payment is typically the largest single expense in most households. Paying it on-time simply demonstrates to a lender that you are less likely to default on your debts.

As far as I can figure out, that is the reasoning. As for your rant about ownership, no, you don't get allodial title. Your ownership is subject to conditions imposed by the government, just like your life and liberty are. That doesn't mean you don't own it, that just means you're subject to the jurisdiction of the government where the house is located. The additional conditions imposed by your mortgage are ones you agreed to in exchange for receiving the loan.

MemberSince99
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Re: Does anyone understand this

Postby MemberSince99 » Wed Jun 22, 2016 8:58 am

Takeshi I agree I don't see it takes any more skill than student loans really. It's a payment.

Viking I feel like I still rent just from the government. They can raise my rent at will to whatever they want just like a landlord can it's just called property taxes instead of rent. Tax toll tariff what's the difference in the end it's money they take from you.

You might enjoy fantasizing that it's yours but it's really not. You can't do what you want to it without their permission for many things. Your car if you want to you can replace the engine in it. But if you want to replace your house plumbing the government wants to jump right into that.
They say it's for your own good but I fail to see how in the case where my water heater was replaced the plumber said that while my piping was to code when it was put in it would need to be larger for current code, and that an inspector would force it all to be redone at a cost of thousands. And I would see no benefit for that it would only meet an arbitrary standard that will probably change again.

If that's for my own good then I don't need the nanny state thank you very much.

I have no problem with code standards per se I have a problem with them forcing them into older homes at a massive cost when what you have is fine and works well for no gain for the money spent. If you think that's cool then why not force all older cars to meet current safety and emission standards? Too expensive? Well so is replacing your plumbing.The case could be made that there is more value in reducing emissions than forcing my house to be piped with one inch lines vs the three quarters that was the standard when it was piped.

But in our system an inspector would force that change on a homeowner simply because the bureaucracy demands it. Can't afford it? Too bad so sad screw you is their view you will comply.

If it feels better to imagine it's yours I can't disagree with that but it's not really yours.

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CarefulBuilder14
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Re: Does anyone understand this

Postby CarefulBuilder14 » Wed Jun 22, 2016 1:03 pm

It's long-term car loans that bug me. If a person takes 5 or so years to pay off a tax-disadvantaged loan for a depreciating asset, "responsible" isn't quite the word that comes to mind. Yet, to FICO, it's simply an installment loan with a long history, indicating low risk.

I'm not saying everyone should only buy what they can pay for up front...but 3 years should be long enough.

A lot of CC issuers do ask, though, whether a person rents or owns...as well as for how long a person has been in one place. A person can, in that sense, get credit for a long-term commitment to an area...whether that's in form of renting, paying a mortgage, or owning free and clear.
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Kevin86475391
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Re: Does anyone understand this

Postby Kevin86475391 » Thu Jun 23, 2016 6:59 pm

MemberSince99 wrote:Viking I feel like I still rent just from the government. They can raise my rent at will to whatever they want just like a landlord can it's just called property taxes instead of rent. Tax toll tariff what's the difference in the end it's money they take from you.

You might enjoy fantasizing that it's yours but it's really not. You can't do what you want to it without their permission for many things. Your car if you want to you can replace the engine in it. But if you want to replace your house plumbing the government wants to jump right into that.
They say it's for your own good but I fail to see how in the case where my water heater was replaced the plumber said that while my piping was to code when it was put in it would need to be larger for current code, and that an inspector would force it all to be redone at a cost of thousands. And I would see no benefit for that it would only meet an arbitrary standard that will probably change again.

If that's for my own good then I don't need the nanny state thank you very much.

I have no problem with code standards per se I have a problem with them forcing them into older homes at a massive cost when what you have is fine and works well for no gain for the money spent. If you think that's cool then why not force all older cars to meet current safety and emission standards? Too expensive? Well so is replacing your plumbing.The case could be made that there is more value in reducing emissions than forcing my house to be piped with one inch lines vs the three quarters that was the standard when it was piped.

But in our system an inspector would force that change on a homeowner simply because the bureaucracy demands it. Can't afford it? Too bad so sad screw you is their view you will comply.

If it feels better to imagine it's yours I can't disagree with that but it's not really yours.


I quite agree. That and homeowners associations are why I personally have zero interest in ever becoming a homeowner. Honestly I'm much more comfortable with the idea as an investment strategy rather than something I'd want to be burdened with in my personal life.

CarefulBuilder14 wrote:It's long-term car loans that bug me. If a person takes 5 or so years to pay off a tax-disadvantaged loan for a depreciating asset, "responsible" isn't quite the word that comes to mind. Yet, to FICO, it's simply an installment loan with a long history, indicating low risk.

I'm not saying everyone should only buy what they can pay for up front...but 3 years should be long enough.


I quite agree with this too.

All that said, I can sort of see how having a mortgage requires more 'skill.' As Takashi and thom02099 said the barrier of entry involved in getting one to begin with requires an extra level of financial skill. Or perhaps 'tenacity,' 'financial literacy,' or 'financial resources' would be more apt terms than 'skill,' but regardless I can see all those things positively impacting one's reliability as a borrower.

The time horizon is also significant. Successfully managing a mortgage for 30 years is certainly a better test of financial endurance than a 1 year rental lease.

Bottom line: Having a mortgage is a better indicator of stability than renting.

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Re: Does anyone understand this

Postby Bama87 » Fri Jun 24, 2016 10:13 am

MemberSince99 wrote:I read on some credit site that having a mortgage boosts your attractiveness to lenders because quote they know that this requires more skill.


Interesting, which site would that be? Is it a reputable site? I am guessing they are talking about "skill" as in requiring the knowledge of understanding what you are getting yourself into when buy a house vs signing up up for a CC and spending money.

TXviking
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Re: Does anyone understand this

Postby TXviking » Sun Jun 26, 2016 1:47 pm

MemberSince99 wrote:Takeshi I agree I don't see it takes any more skill than student loans really. It's a payment.

Viking I feel like I still rent just from the government. They can raise my rent at will to whatever the


You could use the same argument to say your income is not yours since the government can raise income tax. Or that your liberty is not yours because the government can take it away at a whim. In countries with capital punishment, even your life can be taken away by the government.

Ultimately, the government can do whatever they want. Lenders, HOAs and neighbors can make your life miserable, but within the rules set by the government.

You can call a mortgage renting from the government. I call it investing in an asset for me rather than an asset for my landlord. If renting works better for you, great, and if you want to feel smug that you've seen through the government's great ploy, go for it. Ultimately, we are both subject to the rule of law, whether we like those laws or not. That said, I think you'll find your lease imposes far more conditions on you than my mortgage does on me.



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