An Economic View From the Trenches!

I have a unique perspective on the economy because I’m what you would call “in the trenches”. I’m a mortgage loan officer and I work one on one with clients from all walks of life every single day. I get to see what everyone makes, how much money they have in the bank, how much debt they have, what their job history is, and how their retirement plans look.

I’m bound by fiduciary obligations to keep all of that information completely private obviously, (just like an attorney/client relationship works) but I can tell you how people’s finances look as a whole! So here is what I’ve seen over the years. Some of it may really surprise you.


Most of the people I talk to have pretty good credit. I’d say the average is in the low 700 range. But keep in mind….these are people applying for a mortgage so this sampling (and everything below) probably doesn’t reflect the whole population out there.


An interesting thing I’ve noticed is that VERY few people stay at the same job for more than about 5 years. It’s very rare when I see someone at the same job for 10+ years. And most of the people I talk to have made at least one major career change in the past 10 years.


This one obviously swings a lot depending on a lot of different factors but I’d say the average client I do a loan for probably has an annual household income of around $60-70,000. The majority of households have two income earners as well.


Most people have at least one car loan and a few thousand dollars in other misc. debts. It’s a pretty low percentage of the people who are debt free. And it’s extremely rare when I see someone who is totally debt free (no mortgage or anything).


This one is really concerning. VERY few people have more than a month or so worth of living expenses in savings. A big percentage of the people I talk to have nothing at all saved! But I sure see a lot of fancy cars on the road, people in designer clothes, and huge flat screen TV’s in people’s homes. Maybe they have a money tree and aren’t worried about savings. Who knows!


This one is even more concerning! I’d say only about 5% of the people I talk to have a solid plan for retirement or are anywhere near prepared. I closed a loan last month for a couple both in their 70’s who were both working full time and they signed up for a new 30 year loan. Very sad!

The moral of the story

The thing that continues to surprise me is this: What really matters is now HOW much money you make, but WHAT you do with the money you make. I did a loan for a guy earlier this year that has been making over $250,000 for the past 10 years and has only $20,000 in combined liquid assets and only a little equity in his million dollar house! He’s been living large every month for 10 years and has nothing to show for it! (Hope he doesn’t lose that job!!!!)

I met another single mom school teacher this year that made $40,000/year and had over $50,000 in savings! How is that possible?

I really believe that 90% of your financial health is based on the day to day choices you make and probably only 10% is based on circumstances that happen to you. I think people’s “needs” and “wants” are way out of whack, and conservative principles are what win in the long run time and time again. At least that’s what I’ve seen in my profession. Good food for thought anyway.

Crazy things I’ve seen

• The most credit card debt I’ve ever seen was $115,000

• I took an application from a dentist who had perfect credit and made $300,000/year but couldn’t buy anything because he had too much debt.

• I met a real estate developer who was worth $12 million on paper but had no liquid assets and bad credit so he couldn’t buy anything.

• The biggest mortgage payment I ever closed was just over $10,000/mo. It was a 1.5 million dollar loan. (How would you like to be married to that payment for the next 30 years? Who cares how much you make…..ouch!)

• Back in the good old days, if you had a 720 or higher credit score, you could buy a million dollar home with zero down and no income/asset documentation! Is it any wonder the banks all started collapsing?

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