How crazy is this?

25 years ago, married to my first husband (with a steady job), we set out to try to establish some credit. It took 3 times applying but we finally qualified for a $250 line of credit with a Sears credit card. We were thrilled that we could start building credit and possibly buy a house one day.

Nowadays, the mail brings numerous 'pre-approved' credit offers for the 21 yr old and 19 yr old in this household.

Yesterday, in our meeting with the mortgage officer for the new house loan, we were told we could qualify for a $450,000 loan. Now, the new house we are building is way, way, waaaaaaaaaaaaaaaaaaaaaaaay less than that. And it has been keeping me up at nights, worrying if we can afford it. I am saying, unequivocally, uncategorically, that there is no way we could afford a $450,000 mortgage. No way, no how. Uh-uh. We were also told that the percentage of gross monthly income that could go towards a mortgage is now upwards of 55%, leaving 45% for income taxes and living expenses.

Syracuse is considered a very reasonable real estate market and an area with a low cost of living, especially compared to major metropolitan areas. You can still get a very decent house for $125,000 or even less. Part of this is because the jobs here suck. But there are some pricey houses being built in this area more and more often. I often wondered, as I saw development after development of $350,000 houses being built, 'who in the world in Syracuse is buying these houses?' Well, now I know. I don't know if this type of behavior qualifies as predatory lending but I do think that there are people being told by realtors and lenders that they can afford houses they really can't. It might be why the consumer debt load just keeps rising - people have to pay expenses with credit cards because they can't afford the cash with their high mortgages. It might be why more and more people are leasing cars instead of buying. When we bought our 2000 Toyota minivan, the salesman told us that approximately 85% of the cars he sells were leased. Leasing is cheaper on a monthly basis, and people can't afford to buy the cars. There really needs to be a concerted national dialogue about debt, credit and lifestyles in this country. I really do think that we are living on the edge of a precipice and that one wrong movement will send us careening over.