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Frankly I'm sick and tired of hearing people whine about the evil banks and how they are robbing people of their houses. No-one that has borrowed within their means and considers future possibilities has ever had to sell their house or have it repossessed.
When I bought my house I set myself a borrowing limit which I believed I could manage to repay back at up to 12% interest rates. I also factored in reasonable increases in salary over coming years which would extend my capability to 20% interest rates in the next ten years. I hope that they don't get anywhere near either of those figures but I know that I can manage it if they do. I did all this with the view that my wife's salary would not be contributing to our living expenses as we wanted to have children.
All of this meant that we bought a very modest three bedroom one bathroom house in an outer suburb of Perth, nowhere near the coast. It is a little squeezy at times and we can't fit in a plasma TV or any of the other niceties. Owning this small home has actually helped us live within our means by constraining our capacity to store these things.
Our house is ex-government housing. Almost identical to many that I lived in growing up with my father a country cop. I remember having a wonderful childhood. I never felt that we were missing out on anything, even though we kids had to share bedrooms. Truth be known I can't remember having any friends with better houses than ours.
Would I like a much bigger house with all of the mod-cons? Sure I would. Could I afford it if circumstances didn't change? Absolutely. Would I risk my happy marriage and the welfare of my beautiful baby girl to achieve it now rather than wait a few years? No way in hell.
Any one who is in a position of stress because they have borrowed too much has options. Change your lifestyle (i.e. sell the big screen, get a more modest car, etc.) so that you can afford it, refinance over a longer term to make payments more manageable, or sell and either buy smaller or rent.
The banks are no more at fault for people being in mortgage stress than the man who sells a car is for the owner driving into a tree. They may enable the act. They may not protect us from our own stupidity or naivety (in this age of easy information there is little excuse for either.) But they are not responsible.
Travis
PS - I have no affiliation with the banking industry in any way. I just think people need to take some personal responsibility for the consequences of their decisions.
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