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The FICO simulator I put up is a great tool, is free and doesn't even ask for your name. I advise it to all my clients. If they are honest with the questions, their actual FICO is pretty darn close when pulled by a creditor.
Some folks enjoy monitoring their credit with tri merge outfits who charge a fee per month and you get unlimited pulls. Usually $14.99 or something per month.
Your "clients" ? BankRate is a huge multi billion dollar corporation, on the stock exchange, etc. It IS a marketing tool for the most part. It does have some merit, but cannot be relied on totally. And there IS a form to fill out on that link to sign up, "Create Your Member Profile". Helllooooo ?
Unless you are a banker, lawyer, CPA, CFP, etc., I'm sorry but your figures are all wet for a heavily debted young couple. A FICO of 660 is marginal. The girlfriend/wife has a good FICO. PITI is not the only measure the financial institution would use.
Repeat: This is exactly how homeowners in this country found themselves in the foreclosure mess. Fannie Mae and Freddy Mac encouraged and enticed low income high debt borrowers to buy with 0% or 5% down on homes to suit their "dreams". And, 25% of FHA loans are currently underwater. The mere suggestion of $228K is off the wall and irresponsible.
My advice stands. They need to stay put, not rely on future raises, those may not happen. They need to save save save; pay off the student loans and credit card(s) and make a plan that they can work with, and work toward equity in a home for the long run. They will be fine in 5 years if they are diligent. They want a house with a basement and that is doable, but not now. I want a trip to Paris and a BMW.
I rest my case.
Last edited by QuilterChick; 12-29-2012 at 09:50 AM..
Your "clients" ? BankRate is a huge multi billion dollar corporation, on the stock exchange, etc. It IS a marketing tool for the most part. It does have some merit, but cannot be relied on totally. And there IS a form to fill out on that link to sign up, "Create Your Member Profile". Helllooooo ?
Unless you are a banker, lawyer, CPA, CFP, etc., I'm sorry but your figures are all wet for a heavily debted young couple. A FICO of 660 is marginal. The girlfriend/wife has a good FICO. PITI is not the only measure the financial institution would use.
Repeat: This is exactly how homeowners in this country found themselves in the foreclosure mess. Fannie Mae and Freddy Mac encouraged and enticed low income high debt borrowers to buy with 0% or 5% down on homes to suit their "dreams". And, 25% of FHA loans are currently underwater. The mere suggestion of $228K is off the wall and irresponsible.
My advice stands. They need to stay put, not rely on future raises, those may not happen. They need to save save save; pay off the student loans and credit card(s) and make a plan that they can work with, and work toward equity in a home for the long run. They will be fine in 5 years if they are diligent. They want a house with a basement and that is doable, but not now. I want a trip to Paris and a BMW.
I rest my case.
You have just rehashed what you said before. The same negative spin. You cite the same tired talking points and ignore the rest of the facts. .
Most who have come to this thread agree that a 100k loan for a couple who could qualify for a 228k loan based off their income and FICO is a no brainer. Its cheaper than their current rent and this is probably one of the best times to purchase with prices and interest rates being this low.
I am a banker by the way. I am a direct professional. I know exactly what I am writing. If they decide to save up and purchase within the year, the risk is extremely low in their situation. Its a very small mortgage.
Most would also agree that this is one of the best times to purchase. The conditions are excellent by historical standards. If you disagree, fine. Most agree its still a buyers market.
Im glad you have rested your case. I am sure your negative concerns have been duly noted
Most who have come to this thread agree that a 100k loan for a couple who could qualify for a 228k loan based off their income and FICO is a no brainer. Its cheaper than their current rent and this is probably one of the best times to purchase with prices and interest rates being this low.
I am a banker by the way. I am a direct professional. I know exactly what I am writing. If they decide to save up and purchase within the year, the risk is extremely low in their situation. Its a very small mortgage.
Most would also agree that this is one of the best times to purchase. The conditions are excellent by historical standards. If you disagree, fine. Most agree its still a buyers market.
Im glad you have rested your case. I am sure your negative concerns have been duly noted
Aaaagggh. You are SPEAKING completely like a banker. Yes, rates are low right now, and that is great. But the margins are utterly ridiculous in this situation. If it truly is a "fact" that this couple could QUALIFY for a $228,000 mortgage, as you wrote, then that is absolutely insane AND suggests that there is a major problem with the margins you are citing. Has recent history taught us nothing?!
Yes, PITI is around the same as their rent. But their rent might very well include some utilities. Even if it doesn't, it certainly includes repairs and things like a new roof and landscaping and all those other things that homeowners have to pay for out of their own pockets. AND right now they can't afford much of a down payment. Yes, they COULD get a low-down-payment mortgage, but again, what has recent history told us about people who did that? AND they don't even have kids yet, when their expenses will go up drastically at the same time that they will likely lose one income at least for a time. It is really sound financial sense for them to wait at least a couple of years.
I don't think anyone is saying it's a bad time to buy if you have your financial house completely in order AND your financial situation isn't likely to change drastically in the relatively near future. Nor is anyone disputing that it is a buyer's market in most places. What some of us are doing is raising issues that BANKERS should have been a whole lot more concerned about in the last 10-20 years.
I think at this point some of you need refocus yourselves on the OP and stop making it some kind of self serving internet war .
The loan is for 100k. less than half of what he qualifies for . If you dont like the 35% qualifying ratio that gives him a $225k amount , dont blame the messenger. Blame Freddie Fannie Fha and VA. They come up with the formulas.
Nobody has suggested he get a mortgage this high. And we seem to keep repeating the same information. I invite you to refocus on the borrower who just came to see if he could afford a 100k house. Stop trying to make it into some other argument that doesnt exist.
He definitely can. Now its up to him if he wishes to pursue it. And I wish him the best.
I agree with Thomas. A $100K loan sounds reasonable for someone making half that amount yearly. Some people would just prefer to purchase and have their "rent" money go toward building something instead of lining other people's pockets. I highly recommend making the purchase as long as you have set down and worked out your finances and know you can do this. It is wise to put a rainy-day fund aside for repairs and such so just factor that into your budget.
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