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I called up 2 banks today just for the hell of it! The first was a branch of Bank of America and the other was BBT. I then posed this question to both:
I am looking at a home that is being sold for $128,000 and I want to know if I could qualify for a mortgage with $8000 down and a FICO score of 720. Is a mortgage possible?
Both banks gave me a preliminary YES and BBT said I could even get a "preferred rate"! So do not let the fear mongers tell you that "nobody can get credit". If you are credit WORTHY, you can get credit!
I totally agree!!! Bank of America just increased my credit limit on a credit card yesterday I run a zero balance and always have!!!
I called up 2 banks today just for the hell of it! The first was a branch of Bank of America and the other was BBT. I then posed this question to both:
I am looking at a home that is being sold for $128,000 and I want to know if I could qualify for a mortgage with $8000 down and a FICO score of 720. Is a mortgage possible?
Both banks gave me a preliminary YES and BBT said I could even get a "preferred rate"! So do not let the fear mongers tell you that "nobody can get credit". If you are credit WORTHY, you can get credit!
Try calling the banks for a home selling at $600,000 (avg. home price around here) w/ 20% down and good credit. You'd be qualifiying for a Jumbo loan which is a bit tougher to get now. How many Jumbo loans is Fannie Mae buying? I don't know of many areas where an average family could find an acceptable home for $128K (at least not near Chicago). We'd get a small 1BR condo for that.
Last week, we would have easily qualified for a "no-doc" loan but today our broker told us these loans have disappeared overnight.
Last week, you wouldn't have easily qualified, as "no-doc" loans have been gone for a while now.
According to you, you're making money, you are able to make payments, your credit score and history are good, so i don't see why would anyone refuse a loan to you?
Banks are gong back to plain 'vanila' loans, checking everything, and first thing is your ability to re-pay.
I don't know of many areas where an average family could find an acceptable home for $128K (at least not near Chicago). We'd get a small 1BR condo for that.
Yah, it's all about location. Here in Keller, TX, west of 377, $128K can buy you an 1800 square foot three bedroom house in great condition built in 2006, and you can pick from many in that size and price range... Pretty, quiet neighborhoods with nice community amenities and great access to major roadways too.
I would like to see the differences between high FICOs (mine is 806 but I don't own a home) and middle of the road FICOs and bad FICOs increase significantly, to reward those who have shown stability and responsibility and to duly PUNISH those who have not. Too often I've seen acquaintances and colleagues with very questionable credit and virtually nothing down going and buying into relatively (for this area) expensive homes while others of us save and moderate and take responsibility and stay in apartments the whole time.
Here in Atlanta, $128k would get you a 4 bedroom/2.5 bathroom home sitting on half an acre with 2000 - 2500 sq. ft. The big issue is still information. People aren't being properly educated to all of the things that go into owning a home (maintainance, taxes, .etc).
Having good credit definitely helps, and if you have 20% down and a good credit score, the great rates will be available to you but most Americans that are looking don't fit that profile. The average credit score isn't 720, it's in the 600's. If the average was 720, you'd need a 760 to get the best rates.
The media is making things seem a lot worse than they really are. I still get letters in the mail from Chase, and Bank of America trying to sell no-doc loans. They must figure that if they can get bailed out they should make as much money as possible, and I don't blame them for taking advantage of a flawed system. It just sucks that so many people are saying the sky is falling and thinking that it's true.
Last week, you wouldn't have easily qualified, as "no-doc" loans have been gone for a while now.
According to you, you're making money, you are able to make payments, your credit score and history are good, so i don't see why would anyone refuse a loan to you?
Banks are gong back to plain 'vanila' loans, checking everything, and first thing is your ability to re-pay.
Last week, our broker was closing on a deal for us where we did not need documented income. Today, he told me those deals are no longer available. Again, we may not get a loan in 2008 because we did not report an income on our W-2's last year. We will now play the game and pay ourselves an income at the end of '08 so we can qualify for a 'vanilla' mortage even though our situation is not really 'vanilla'.
We have no problem w/ the ability to re-pay as is evidenced by our credit score. However, these 'no-doc' loans originally met a legitimate need - small business owners who did not take an income so they could reinvest in growing their businesses. We did not take an income for 3 years so we could hire people, train them, pay their benefits, buy products, build an infrastructure, buy a warehouse, etc... you know, doing things to invest in american people and in the american economy. Believe me, there are many hard-working small business owners who will be in the same boat during this credit freeze. It is not these business owners who got us into this mess. But we will be paying the price and, unfortunately, so will our employees...
Just spoke to JP Morgan Chase today. Here is the policy for FLORIDA.
NO LOANS for condominiums, NO LOANS for vacation homes. Loans available for single family homes, minimum 20% down payment.
Moral: condo prices expected to come down further; if you have to borrow for a second home, you do not deserve it; single family homes as primary residences should maintain their value or at least not decline by more than 20% more.
One more thing. On the interbank market, overnight rates are in the neighborhood of 6%-7%, these are market rates.
This is where short-term rates, including rates to calculate mortgages with no gimmicks, should have been for these past six-seven years, as set by the market, not by government fiat.
There is no reason to pass a bailout, lending conditions will naturally go back to what they always should have been.
Sure there will be pain during the withdrawal period, but any bailout should be directed to basic sustenance, job retraining, and new productive jobs, not to paying off the bureaucrats and the cronies of komrades Bush, Dodd, and Frank.
Just spoke to JP Morgan Chase today. Here is the policy for FLORIDA.
NO LOANS for condominiums, NO LOANS for vacation homes. Loans available for single family homes, minimum 20% down payment.
So loans are back to where they were before s==t hit the fan and interest rates are STILL in the 6's and 7's?
What exacly is the problem here people? Oh yeah the morons in the boom then bust states that the rest of the country unfortunately gets lumped in with.
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I run a zero balance and always have!!!
