Mortgage applicants: anecdotes please.
Started by kgg
over 17 years ago
Posts: 404
Member since: Nov 2007
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similar story here (me + 3 other friends who were looking)
combination of rates on jumbo and tighter requirements even with top rated credit
many of the brokers seem to tell you it is a great time to buy --
Buyer's market --- YEA YEA!!
but when you explain the % shift in affordability and hence point out the offers need to come in 20-30% below 2007 they turn cold -- um it is not a mrket for that kind of buyer
As others have pointed out, it takes time for the wave to travel or the mountain to come to mohammed
Three weeks ago JPM gave me a commitment letter for what I consider to be a very big mortgage (almost 4X salary) and the broker said I could go higher. I thought the old rule of thumb was buy a place that costs 3X salary, not take a mortgage bigger than that. My credit score is apparently high, and I can put down 20% with some money left over, so, at least from this data point, you can still get a LOT of credit.
That said, it seems like many of places I am looking at were bought with 10% down and very low rates. (Been spending a lot of time on ACRIS) If that doesn’t exist any more, where do the people come from to buy these places now?
So, it does seem like you need to put more down that the past few years, but the ratios are still about the same.
Yes, general rule of thumb may be 3x salary. However, the banks will lend based on debt to income ratio up to 45%, sometimes more. Considering that it is based off your gross income, many will think thats absurd. I think thats up to the buyer. To give you a general idea of what you will qualify for here is a general calculation I use. Add up all your monthly expenses that show up on your credit report with your mortgage payment, common charges, taxes. Then use your your yearly salary and divide that by 12. Then multiple that monthly income by .45. If your total monthly obligations are less 45% of your monthly gross income then you should qualify. Of course your monthly mortgage payment will depend on your rate. But this is just a general rule of thumb we use at the bank. If you have any questions about qualifying for a loan, please feel free to contact me. sunny_hong@countrywide.com