Home Sweet Home

I heard on Fox News that our government would help people refinance their mortgages to get a more affordable payment, if your payment was over 30% of your income. That’s the same figure our bank said Dave and I could afford way back when we got our loan in the 90’s. We looked at what 30% of our income was. It was more then double what we knew we could afford. The banks were telling anyone with good credit back then that you could afford a house payment that did not exceed 30% of your income. Maybe if you don’t eat, don’t have any utilities, don’t buy gas or own a car at all, etc. It’s totally unrealistic. I can remember sitting across the desk at the bank when we were told that figure and the look on Dave’s face. We still had time to talk it over, so we went home and discussed it. We were building a house, so we could have made it bigger. We chose not to. We’re only high school grads, but we knew that a payment that was 30% of our income was way too high. We had several friends who were building at the time. I can remember conversations with them about the amount the banks were saying they could afford. I’ll admit it was a boost to our egos to think we could afford a payment that big. I had visions of Jacuzzi tubs and marble counter tops dancing in my head. Dave was envisioning a four-car attached garage. Then the Holy Spirit jerked us back to reality. I’m so glad we didn’t get caught up in that. Twenty percent is more realistic, if you have a weakness for…… say…….food.

According to the Federal Reserve Bank map at the following website http://data.newyorkfed.org/creditconditionsmap/, most states in American are showing only an average of 1% to 3% of mortgages are 90 days delinquent. Only Southern California and Florida rates are higher, coming in at 6% to 7%. That means that about 95% of American mortgages are current or less than 90 days. Why the government intervention? If they're gone to refinance loans to get a lower payment, I surely hope they get their payment down to 20% of they're income or they will just default all over again.