Woman forced to sell her dream car after paying $40k in interest over 3 years

[Squatch]

I sold a car to a coworker about 35 years ago. Squeeze-easy payments. She stiffed me on the last $400, or so, after she got fired. I later heard from her niece and nephew that her husband had been giving her the money to make the last six remaining payments on their mortgage. Yeah, well, she wasn't making the payments, and the bank contacted him with the threat of foreclosure. Like I said, there were six payments left. He threatened her with divorce, I was told. Hope he followed through.

 

[chili_pepper]

My son works with an idiot who has no idea how to handle money. He has maxed out everything.

I sincerely hope, for the sake of your son and yourself, that his safety and employment aren't in any way tied to this individual and his clearly questionable decisions.

 

[mxz800]

I sincerely hope, for the sake of your son and yourself, that his safety and employment aren't in any way tied to this individual and his clearly questionable decisions.

Son works for postal service, his co worker was hired at the same time. My son just laughs at all the stupid stuff he does.

 

[freedom_in_4low]

you could afford this $300k house on an income of $55k per year.

"Can afford" is bank speak for the threshold at which they believe it is still a good bet that you repay vs default. It's a statistical optimization, finding the perfect balance where being slightly more restrictive will make them less money by missing out on interest from those at that level of financial stress that will still manage to repay, and being slightly less restrictive will make them less money by having to fund too many foreclosures and repos; therefore making absolute maximum profit. It has absolute f-all to do with whether any individual applicant has the ability to repay, or better said, the combination of self loathing and self restraint to go without every single other thing that makes their life remotely livable in exchange for a toy they'll be upside down in for most of the next decade.

Sometimes they misjudge that optimal balance and put themselves into a corner where they have hold the entire economy for ransom in the form of a taxpayer bailout to survive.

 

[Shank]

She did say that GM Financial was the only lender who would approve her.

With them knowing that they could repo the vehicle at any time, it wouldn't surprise me if they were counting on her going into default.

Predatory lenders don't care about ancillaries like food. Or supporting your children.

My wife and I looked at a house years ago and there was a poster on the fireplace stating that you could afford this $300k house on an income of $55k per year.

I thought banks would usually lend 4x income on a house (I know there are a lot of other factors).

 

[freedom_in_4low]

I thought banks would usually lend 4x income on a house (I know there are a lot of other factors).

That factor doesn't account for varying interest rates or taxes.

I believe they compare the total payment to your net pay and keep it below a percentage.

When interest rose from 2.75 to 6.25 while I built my house in 2022 I was panicked that I wasn't gonna get approved because the new payment was (is) far more than I'd ever have thought was ok. He assured me I still had several hundred/mo to go before I even needed to worry about that. I'd have backed out of the deal in most most other situations but my wife was in school so I knew I just had to last about 18 months before she got out and started working and got our cashflow situation healthy again.