People Getting Stretched to Limit. Credit Card Balances Soar.

[A.J. Holst]

A mostly unreported issue:

Mortgage escrow shortages / delinquencies are on the rise.

Substantial increases in property taxes and home owners insurance are adding $300+ to mortgage payments.

Credit card usage among homeowners is increasing as HELOCs are now maxed out and adjusting to current rates...and yes, it's for gas and groceries not fabulous vacations.

[gregintenn]

25 minutes ago, A.J. Holst said:

A mostly unreported issue:

Mortgage escrow shortages / delinquencies are on the rise.

Substantial increases in property taxes and home owners insurance are adding $300+ to mortgage payments.

Credit card usage among homeowners is increasing as HELOCs are now maxed out and adjusting to current rates...and yes, it's for gas and groceries not fabulous vacations.

I’ll argue it was for a home they could not afford to begin with.

[Garufa]

29 minutes ago, gregintenn said:

I’ll argue it was for a home they could not afford to begin with.

And having the biggest, newest, pickup truck on the block in a neighborhood they can’t afford living in with insurance rates skyrocketing to match the grossly overinflated house values in this state.  

Not to mention everyday expenses that are unaffordable due to previously mentioned commitments. 

“But the bill just says minimum payment due”.  That kind of ignorance has a lot to do with it as well.

And none of that has jack #### to do with the government.

[gregintenn]

6 minutes ago, Garufa said:

And having the biggest, newest, pickup truck on the block in a neighborhood they can’t afford living in with insurance rates skyrocketing to match the grossly overinflated house values in this state.  

Not to mention everyday expenses that are unaffordable due to previously mentioned commitments. 

“But the bill just says minimum payment due”.  That kind of ignorance has a lot to do with it as well.

And none of that has jack #### to do with the government.

Well, except for inflation, I would agree with you.

[Grayfox54]

I'm also unhappy with the price of groceries these days. But I'm old, retired, live alone and financially secure. I don't like it, but I do just fine. 

For those who do struggle, the internet is plumb full of info on how to make every grocery dollar count. You won't eat fancy, but you will eat. But then some people refuse to substitute hamburger for steak. They're also real fond of fast food and restaurants . Much of their problem is in their own dietary habits and tastes. 

As for mortgages,  then you hit upon one of my pet peeves. For individuals, the housing market sucks! Big real estate corporations are buying up single family dwellings all over the country. Often buying sight unseen and for thousands over asking prices. First time home buyers can't compete with that. Or worse, end up buying more house than they can actually afford because that's all there is out there. 

For many young couples, the dream of buying a home is just that, a dream. 

 

[Garufa]

38 minutes ago, Grayfox54 said:

I'm also unhappy with the price of groceries these days. But I'm old, retired, live alone and financially secure. I don't like it, but I do just fine. 

For those who do struggle, the internet is plumb full of info on how to make every grocery dollar count. You won't eat fancy, but you will eat. But then some people refuse to substitute hamburger for steak. They're also real fond of fast food and restaurants . Much of their problem is in their own dietary habits and tastes. 

As for mortgages,  then you hit upon one of my pet peeves. For individuals, the housing market sucks! Big real estate corporations are buying up single family dwellings all over the country. Often buying sight unseen and for thousands over asking prices. First time home buyers can't compete with that. Or worse, end up buying more house than they can actually afford because that's all there is out there. 

For many young couples, the dream of buying a home is just that, a dream. 

 

Using Kroger as an example, I have literally seen nearly 100% increase in prices on some things in the past 4 years and I swear every week I go in there something I want has been jacked up again.

As far as housing goes you hit on an even greater issue.  It’s literally tearing the fabric of society apart, especially in TN.

Just imagine if all these people raising hell about language, he/she’s, Palestinians, and whatever the outrage of the day is started focusing on the increasing threat to their daily lives then we might start seeing some of that “change” everyone talks about.

[Omega]

Many, not all, homes were within the homeowner's budget when they bought them, but inflation and tax assessment hikes have taken their toll.  With all those Californians and New Yorkers making all the homes and property go up in value, the new, and probably temporary issue has left many homeowners in a bind tax wise.  My assessment went up over 60% for the 24 tax season, so those on a fixed income will definitely feel it next April, so living within their means right now is out the door next year.

[ArmyBrat61]

12 hours ago, Grayfox54 said:

Big real estate corporations are buying up single family dwellings all over the country. Often buying sight unseen and for thousands over asking prices.

Where are these corporations? My house is for sale and all I get is low ballers! 

[Tom B]

7 hours ago, Omega said:

Many, not all, homes were within the homeowner's budget when they bought them, but inflation and tax assessment hikes have taken their toll.  With all those Californians and New Yorkers making all the homes and property go up in value, the new, and probably temporary issue has left many homeowners in a bind tax wise.  My assessment went up over 60% for the 24 tax season, so those on a fixed income will definitely feel it next April, so living within their means right now is out the door next year.

A tax 'assessment' going up doesnt mean that our taxes will go up. Hopefully the tax 'rate' will go down.

But thats in a perfect world-lol. My house assessment just went up something like 40%. But I really dont expect the tax bill to go up that much. Though I'm sure it will go up a bit.

Edited May 23 by Tom B

[NoBanStan]

15 hours ago, Grayfox54 said:

For many young couples, the dream of buying a home is just that, a dream. 

 

I, like numerous other parents, have a child that's just graduated. It scares the heck out of me that he can't afford to live anywhere around me. Single bedroom apartments are charging rent that's as high as my house payment. So unless he buckles down and makes well over 6 figures (impossible at his age), he's gonna be living with me or shacked up with 2-3 friends 'house poor' in some crummy apartment.

[Defender]

2 minutes ago, NoBanStan said:

I, like numerous other parents, have a child that's just graduated. It scares the heck out of me that he can't afford to live anywhere around me. Single bedroom apartments are charging rent that's as high as my house payment. So unless he buckles down and makes well over 6 figures (impossible at his age), he's gonna be living with me or shacked up with 2-3 friends 'house poor' in some crummy apartment.

My daughter, 24, is in a similar situation.  She does have her own apt, but can’t get ahead.  She supports herself, but just b barely, and with no extras.

[NoBanStan]

1 minute ago, Defender said:

My daughter, 24, is in a similar situation.  She does have her own apt, but can’t get ahead.  She supports herself, but just b barely, and with no extras.

I feel for her. Just gotta keep on keeping on I suppose. Or push for those better jobs and promotions. At least she's 24 so she's got plenty of runway to catch up. She's doing better than most just by having a place of her own.

[OldIronFan]

I use a credit card exclusively and have for a number of years. As a result I have not paid for a hotel room, flight, or rental car in about 5 years. I have a card with travel focused points/benefits and use those to take (basically) free vacations. I even got them to foot the bill for my TSA Precheck and Global Entry ID. I say basically free because my points don't cover food, fuel, souvenirs, and tickets/entry fees. I spent 16 days on the road last spring traveling 7200 miles. Cost me about $2000 in food, fuel, gifts, and national park entry fees. The $2000 got me a few points towards the next vacation . I have never carried a balance past 30 days on that card and have paid no interest to the CC company. I do pay a small annual fee for that card but many years I manage to get that either waived or offset by some promotion/benefit. 

It has also had the bonus of being a shield against identity theft. I once had my ATM card hacked back when I still used one. It was a nightmare to get charges reversed with my bank. It was costly because I had a number of overdrafts or returned auto payments that occurred before the hack was discovered. I have had my CC number hacked or stolen a few times since then and every time the CC company caught it before I did. They locked the card number, contacted me about the potential theft, and reversed the charges within hours of the first fraudulent charge. I did not loose a penny on any of those occurrences because the CC company was so diligent about fraud. One of those occurrences was hours before a flight for a trip with my wife. The CC company overnighted new cards to the hotel we were staying at so we would not have an interruption or inconvenience on our vacation. 

0.00% interest, or even a promo rate like 1.9~2.9%, on a new car can be a screamin' deal. As long as the 30k or 40k you would have spent on the car is sitting in the bank earning 5%~6% or more in interest. I had a hell of a time paying cash for my last new car. The dealer did not want to play ball at all on a cash deal. He was happy to offer all sorts of incentives on financing though thanks to all the backend money they get on those that pay lots of interest on a crazy 72 month loan. 

Property Tax Assessments are a buzz word the media can use in a headline to scare you. My property tax assessment went up some crazy percentage a little while back but the actual increase to my property tax burden went up less than $100 annually. Less than inflation honestly. 

 

Honestly one of the biggest issues I see is a complete and utter lack of saving/investing. That is not just the young folks that are struggling to get ahead, or just get on their feet, but the middle age folks rapidly approaching retirement age.

I started my first IRA at age 18. I did that mostly for a tax break at the time because I was making too much money with few deductions available to me. I kept that trend going for many years and only failed to save a few very lean years where under/un employment issues occurred in the family. Even with over 3 decades of IRA, 401K, cash, and general investment savings under my belt I fear I will not have enough saved to live comfortably in retirement. I know I am in significantly better shape than probably 90% of my peers though. I have friends and coworkers that feel like they can't afford to participate in their company 401k plans because they need every penny from their paycheck to cover the house, cars, and credit card bills. 

Credit can be a tool. It is not in and of itself "evil". Using it as a crutch is a choice, a poor one. 
Now predatory lending practices are a different matter entirely.  That topic could support it's own multipage thread. 

[Omega]

2 hours ago, Tom B said:

A tax 'assessment' going up doesnt mean that our taxes will go up. Hopefully the tax 'rate' will go down.

But thats in a perfect world-lol. My house assessment just went up something like 40%. But I really dont expect the tax bill to go up that much. Though I'm sure it will go up a bit.

If you look at your assessment notice, you will see what the assessment rate will be and what it was, mine (just looked) is 71%, assessed last year was $43,750, this year will be $74,850 with a .25 ratio for both years, which will be fixed for the next 5 years.  That means it will be 71% more money I have to pay at tax time.

On a 7.3 acre parcel I also have in Montgomery County, the assessment was 147% higher, assessed $1,800 last year $4,450 this year, but I am in talks with the county about that one and feel confident that will change.  I think I will try and organize something for the home part, because the cash buyers are dwindling and values will either stop or even go down slightly but we will be stuck with the huge increase for the next 5 years.  I can see, not agree with, but can see raising it up by 30% or so due to bidenomics, but to use the onslaught of outsiders to set our tax rates seems outrageous to me.  

[Grayfox54]

When my younger son got married, he and his new bride went house hunting. They both have good jobs and the bank had already pre-approved a home loan. It took them over a year to find a house. Every time they found one they liked, those real estate corporations would swoop in and out bid them. Every single time! 

They finally had to go to a new subdivision 20 miles out of town and have a house built. So far they're managing, but I worry that it may prove more than they can really afford. 

There needs to be a law that single family dwellings can only be sold to single families. These corporations are raking in millions while screwing over people who actually need a home. 

[Omega]

35 minutes ago, OldIronFan said:

I use a credit card exclusively and have for a number of years. As a result I have not paid for a hotel room, flight, or rental car in about 5 years. I have a card with travel focused points/benefits and use those to take (basically) free vacations. I even got them to foot the bill for my TSA Precheck and Global Entry ID. I say basically free because my points don't cover food, fuel, souvenirs, and tickets/entry fees. I spent 16 days on the road last spring traveling 7200 miles. Cost me about $2000 in food, fuel, gifts, and national park entry fees. The $2000 got me a few points towards the next vacation . I have never carried a balance past 30 days on that card and have paid no interest to the CC company. I do pay a small annual fee for that card but many years I manage to get that either waived or offset by some promotion/benefit. 

It has also had the bonus of being a shield against identity theft. I once had my ATM card hacked back when I still used one. It was a nightmare to get charges reversed with my bank. It was costly because I had a number of overdrafts or returned auto payments that occurred before the hack was discovered. I have had my CC number hacked or stolen a few times since then and every time the CC company caught it before I did. They locked the card number, contacted me about the potential theft, and reversed the charges within hours of the first fraudulent charge. I did not loose a penny on any of those occurrences because the CC company was so diligent about fraud. One of those occurrences was hours before a flight for a trip with my wife. The CC company overnighted new cards to the hotel we were staying at so we would not have an interruption or inconvenience on our vacation. 

0.00% interest, or even a promo rate like 1.9~2.9%, on a new car can be a screamin' deal. As long as the 30k or 40k you would have spent on the car is sitting in the bank earning 5%~6% or more in interest. I had a hell of a time paying cash for my last new car. The dealer did not want to play ball at all on a cash deal. He was happy to offer all sorts of incentives on financing though thanks to all the backend money they get on those that pay lots of interest on a crazy 72 month loan. 

Property Tax Assessments are a buzz word the media can use in a headline to scare you. My property tax assessment went up some crazy percentage a little while back but the actual increase to my property tax burden went up less than $100 annually. Less than inflation honestly. 

 

Honestly one of the biggest issues I see is a complete and utter lack of saving/investing. That is not just the young folks that are struggling to get ahead, or just get on their feet, but the middle age folks rapidly approaching retirement age.

I started my first IRA at age 18. I did that mostly for a tax break at the time because I was making too much money with few deductions available to me. I kept that trend going for many years and only failed to save a few very lean years where under/un employment issues occurred in the family. Even with over 3 decades of IRA, 401K, cash, and general investment savings under my belt I fear I will not have enough saved to live comfortably in retirement. I know I am in significantly better shape than probably 90% of my peers though. I have friends and coworkers that feel like they can't afford to participate in their company 401k plans because they need every penny from their paycheck to cover the house, cars, and credit card bills. 

Credit can be a tool. It is not in and of itself "evil". Using it as a crutch is a choice, a poor one. 
Now predatory lending practices are a different matter entirely.  That topic could support it's own multipage thread. 

All the debit cards I have ever had, has a Visa logo, so they had the security and protections that any credit card had.  I bank with USAA now, but even when I had Bank of America, I never lost any money when my debit card was compromised, and it happened a few times, most times they caught it, other times I seen the weird charges.  My money was refunded either immediately or within a day or two most times. USAA used to have a debit card that did points, but they stopped doing it so I now have their credit card, I have it set to auto pay the balance at the end of the billing cycle, and I will manually pay any remainder even though it will not incur charges.  I have applied for creg to  ing dit cards every now and then from retailers to get the discount on a large ticket item I was buying but will cancel them as soon as possible and make sure I have no fees from doing so beforehand. 

Luckily I do not live paycheck to paycheck anymore, but the bad economy does put a dent on things, so I can see how some may get in a financial mess just by trying to get by.  All it takes is one slipup, unexpected bill or a health issue to get them under water.

[tacops]

26 minutes ago, Grayfox54 said:

When my younger son got married, he and his new bride went house hunting. They both have good jobs and the bank had already pre-approved a home loan. It took them over a year to find a house. Every time they found one they liked, those real estate corporations would swoop in and out bid them. Every single time! 

They finally had to go to a new subdivision 20 miles out of town and have a house built. So far they're managing, but I worry that it may prove more than they can really afford. 

There needs to be a law that single family dwellings can only be sold to single families. These corporations are raking in millions while screwing over people who actually need a home. 

The problem is that politicians have personal financial interest/benefit in these corporations doing what they do, thus no corrective legislation will be pushed. Just empty promises to make people think they are looking out for the masses BS.    

[pop pop]

Just saw a rough 52 acer horse farm, in Christiana, 1 old house and 2 decrepit barns, in very bad shape bring 850,000.00 last weekend. No road frontage, 1/4 mile from the road with only a shared road easement to get to it. Property is outrageous.  

edited to add; sold at auction. Very hard to change your living conditions when property, and everything is so high. Would hate to be in bad shape right now. 

Edited May 23 by pop pop

[Grayfox54]

The new owner will likely divide it up, build a bunch of houses and list at $250,000 or more each. 

[Tom B]

3 hours ago, OldIronFan said:

Property Tax Assessments are a buzz word the media can use in a headline to scare you. My property tax assessment went up some crazy percentage a little while back but the actual increase to my property tax burden went up less than $100 annually. Less than inflation honestly. 

This is kinda what I meant.

Lets say a house is assessed at $50,000, and you pay $1000/yr in taxes

If the assessment goes up to $100,000, it doesnt mean you will pay $2000/yr

 

 

[Johnny Rotten]

4 hours ago, pop pop said:

Just saw a rough 52 acer horse farm, in Christiana, 1 old house and 2 decrepit barns, in very bad shape bring 850,000.00 last weekend. No road frontage, 1/4 mile from the road with only a shared road easement to get to it. Property is outrageous.  

edited to add; sold at auction. Very hard to change your living conditions when property, and everything is so high. Would hate to be in bad shape right now. 

15k per acre is the going rate in my county, use to be 5k

[monkeylizard]

8 hours ago, NoBanStan said:

or shacked up with 2-3 friends 'house poor' in some crummy apartment.

What's wrong with that? I did it. My brother did it. I suspect a lot of folks on here did it. It sucks for a season, but it's a means to an end. It made me appreciate having my own place later.

[Grayfox54]

Depends on who your roommates are.  Some are much better than others. 

My oldest son shared a house with a "friend" and his wife. They finally recently moved out. Thank God! 

[FUJIMO]

6 minutes ago, Grayfox54 said:

Depends on who your roommates are.  Some are much better than others. 

My oldest son shared a house with a "friend" and his wife. They finally recently moved out. Thank God! 

Thats called motivation to save lol

[Omega]

4 hours ago, Tom B said:

This is kinda what I meant.

Lets say a house is assessed at $50,000, and you pay $1000/yr in taxes

If the assessment goes up to $100,000, it doesnt mean you will pay $2000/yr

 

 

I sure hope you're right, because 147% sure doesn't sound good on paper.