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Originally Posted by taylor192
This is why I think university is a sham.
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I'm glad Taylor is posting but I have to elaborate on his post as it really struck a chord with me.
School is a sham for some things, but not for everything. For med or law I can see value in school. A technical element of some kind is important. School has it's place. The problem is, the school is a business that has done a great job of brainwashing everyone into buying into their lies and false promises.
While I can also see value for those who wish to learn 'some' elements of something, it is important not to live in a box taking everything the school says as the law of the land. World, life and experience holds the key.
This is why many university grads end up starting at the bottom of the corporate ladder anyway. Employers also like university grads because if you could be the school's bitch for 4 years, chances are, you'll be their corporate bitch for 40. Never questioning, never stepping out of line. The perfect little bitch.
I think most business schools and finance classes are pointless and actually lead you down the wrong path. I'm a University Grad with plenty of designations after the fact. The reason? I finished school hoping to have it made and I didn't. I took designation after designation hoping that I would be enlightened and learn how to make money.
I made money using NONE of the tools that were given to me through professional education. In fact, in many cases, I had to defy those rules that were pounded in my head during my formal education. In the end, I learned by actually understanding the HOW and then actually doing it the way others do. Not the way a text book told me to.
I'm not going to thread-jack but I could write a book on this.
Quote:
Originally Posted by taylor192
Come on, if you researched this subject you'd know that subprime was caused by:
- people buying more than they can afford (aka you)
- people taking out loans to finance downpayments (aka you)
- people taking mortgages with rates that will go up, yet they cannot afford on paper when rates go up (aka you)
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To get even more technical, most people out there don't even know what 'Sub-Prime' is. Prime is the perfect situation for the right client. Sub Prime is anything that breaks that norm. Another way to think of it is lending beyond the standardized acceptable historical norms.
This means extending amortization periods beyond 25 years, buying with less than the previous required minimum down payment (if anyone mentions CMHC as a safety net, I suggest you research), buying based on inflated income in cyclic industries and the list goes on.
Most buyers recently (2008/2009 data) statistically purchase with 5% down (this 5% in 45% of the cases is borrow from other lines of credit because the current value is so cheap). The average amortization of mortgage is 35 years (previously 25) and plenty over the last few years took 40 years while they were available). The average person's debt ratio is within 2% of their threshold. Their debt ratio in over 80% of the cases is based on dual income. Only one person needs to be laid off or have a wage decrease and the family is in trouble.
The scary thing is, the real estate world in Vancouver is like a perpetual machine. I'm not saying prices can't go up, but when they run too hard and too fast, there is trouble. If a builder is buying up condos because they are making $100,000k a year building. What do you think happens when the market slows down? The wages go down and the price goes down and the demand goes into the toilet.
The biggest irony of all, sub-prime is and was not the cause of the bubble in the US nor is that the real problem in Canada contrary to what the news says (the news is also about as reliable as a fortune teller hence why I do not have cable TV)
Real estate bubbles (especially in Vancouver) have happened again and again and will continue to happen again and again. The reasons are always different but there is always some kind of catalyst to make people feel smart.
Quote:
Originally Posted by taylor192
What do you do in 5 years if rates are much higher and you cannot make the TDS or GDS? I know you're not maxing out the $350K pre-approval, yet even at $300K you're not leaving a lot of wiggle room considering you've borrowed $150K from your parents.
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While Taylor mentions this, many people either just don't listen or think it can't happen to them. Well, it can. It will. Just wait.
It was only a few years ago that prime was at 6.25%, people forget that pretty quick. Besides, interest rates are irrelevant if someone doesn't even have a job to make the mortgage payments anyway. It's easier and feels nicer to pretend everything is okay. While these people live in fantasy land, I get to make money off their backs.
Does that make me an asshole? No, it makes me forward thinking and lemmings always drown.
Quote:
Originally Posted by taylor192
You are correct in that the US and Canada are different, we have recourse mortgages, the US does not. US buyers could walk away from bad mortgages and leave the debt with the bank. Canadians cannot. If for some reason you cannot renew, and housing prices drop, the bank is allowed to take back the house, sell it at a loss, and sue you for the difference. If the bank doesn't do that, CHMC will.
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Which makes our situation potentially worse. CMHC also is back by the taxpayer so guess who has to pay if something goes sour? They are not looking too good right now either. If their balance sheet was a company and they were on the stock exchange they would be getting delisted right about now.
Quote:
Originally Posted by taylor192
LOL I wish I had parents that wouldn't miss $150-200K.
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You do and you don't. I think you're the kind of person who'd rather do it themselves. You know how it is with hand outs. It's just like a baller version of the soup kitchen.
The bums are right back the next day waiting for the next bowl. Very few learn to make their own soup
