Rent payments aren’t reported to collection agencies so you’re absolutely correct, credit risk is a horrible metric risk to use when tenant risk could instead be used. I’m so glad you understand the on-time payment of rent is a much better way to determine whether or not someone can afford to a pay a mortgage, much less a mortgage with a lower premium. Credit risk is a bullshit metric that shouldn’t be used for mortgages at all; bank statements proving income and rent payments as well as whatever tenant letters you can scrape out of landlords are much better indicators.
If you think the history of money going to keep a roof over someone’s head is worse than a made-up, opaque number that is explicitly intended to benefit those with capital, you have no business talking about real people and should go back to talking about the stock market.
credit risk is a horrible metric risk to use when tenant risk could instead be used.
I don’t disagree with this statement but the formulas are set around “credit risk” and nobody got around to tracking “tenant risk” because that’s our society is structured.
Either way, people who own property want it this way.
You are implying a lot of things about how I think, which a quick background check would resolve btw.
You said that people that don’t understand the different between credit and tenant risk have no business buying assets. Either you are very bad at communicating or you don’t understand that most people can’t afford to look at a home as asset. That’s a very upper middle class and beyond perspective, similar to a car being an asset. They have utility; they are not financial instruments.
fair… i still stand behind that point too. i just don’t think rent seeker mortgage originator should be making that call since neither them or investor carries the risk, FHA and VA loans are backed by Daddy Sam, so why are they not front ending it?
Most sellers will take anything else before VA or FHA loans and most buying agents will try to get you away from them. Most sellers will also take cash over a loan, often even if the loan is a higher amount. I’m assuming a tight market like exist in most big US cities; reasonably priced houses go very quickly still in many places.
I don’t know why the real estate conventional wisdom goes against the loan; it really frustrates me and limits accessibility.
Rent payments aren’t reported to collection agencies so you’re absolutely correct, credit risk is a horrible metric risk to use when tenant risk could instead be used. I’m so glad you understand the on-time payment of rent is a much better way to determine whether or not someone can afford to a pay a mortgage, much less a mortgage with a lower premium. Credit risk is a bullshit metric that shouldn’t be used for mortgages at all; bank statements proving income and rent payments as well as whatever tenant letters you can scrape out of landlords are much better indicators.
If you think the history of money going to keep a roof over someone’s head is worse than a made-up, opaque number that is explicitly intended to benefit those with capital, you have no business talking about real people and should go back to talking about the stock market.
I don’t disagree with this statement but the formulas are set around “credit risk” and nobody got around to tracking “tenant risk” because that’s our society is structured.
Either way, people who own property want it this way.
You are implying a lot of things about how I think, which a quick background check would resolve btw.
You said that people that don’t understand the different between credit and tenant risk have no business buying assets. Either you are very bad at communicating or you don’t understand that most people can’t afford to look at a home as asset. That’s a very upper middle class and beyond perspective, similar to a car being an asset. They have utility; they are not financial instruments.
fair… i still stand behind that point too. i just don’t think rent seeker mortgage originator should be making that call since neither them or investor carries the risk, FHA and VA loans are backed by Daddy Sam, so why are they not front ending it?
Most sellers will take anything else before VA or FHA loans and most buying agents will try to get you away from them. Most sellers will also take cash over a loan, often even if the loan is a higher amount. I’m assuming a tight market like exist in most big US cities; reasonably priced houses go very quickly still in many places.
I don’t know why the real estate conventional wisdom goes against the loan; it really frustrates me and limits accessibility.
Cash buyer always asks for that discount though, u should know that ;)