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Old 02-05-2013, 10:25 PM
 
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Just a few questions,as this whole mortgage thing is strange to me.

Why don't some banks want to lend me $68,000 for a short sale I'm trying to purchase?
One bank said the amount was too small. What the?
Even if I just list job #1(89,000) its hard. I have decent credit,could be a little better in the savings dept though.

Sorry,treid to re-edit title.
It should have read: almost 2x less than income.
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Old 02-06-2013, 07:20 AM
 
Location: East of Seattle since 1992, originally from SF Bay Area
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As a short sale, it could be that the property is not worth the $68,000
or in an area where the prices are still falling and they expect it to be under water again soon. It could also be that they just are not interested because they have plenty of other people borrowing larger amounts. I know there are many lenders that will not finance a car for less than $7,000, just not enough profit in it for them to bother.
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Old 02-06-2013, 07:51 AM
 
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Quote:
Originally Posted by Hemlock140 View Post
I know there are many lenders that will not finance a car for less than $7,000, just not enough profit in it for them to bother.
I would say that is most likely the reason for most big banks.

Have you tired talking with credit union?

If all else fails possible try getting a personal loan i know the rate is much higher but with the low amount it will force you to pay it off quicker which is always a plus
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Old 02-06-2013, 10:05 AM
 
Location: Boise, ID
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Yeah, like Hemlock said, some banks don't want to do junior loans (aka baby loans). Different banks set their low ends at different points. Some banks also will do the junior loans, but charge a higher interest rate.

When I went to refinance my house, because I only owe about $80k, my interest rate was going to be higher than someone who owes more.

It isn't a relationship to your income in this case, it is just the fact that the loan is under $100k (or whatever the low end cap for your bank is).
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Old 02-06-2013, 10:24 AM
 
Location: Eastern WV Panhandle
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Have you tried at a local/community bank with a branch in the same county as the property? When I took out a land loan for $25k no national bank would touch it because it was too small, I had to find local financing.
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Old 02-06-2013, 03:29 PM
 
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2 words, Credit Union.
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Old 02-06-2013, 03:34 PM
 
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Ok,but I thought common wisdom was to get a mortage 1 to 1.5x your income?
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Old 02-06-2013, 03:45 PM
 
Location: Austin
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Originally Posted by jerseygal4u View Post
Ok,but I thought common wisdom was to get a mortage 1 to 1.5x your income?
So people making $50k should only buy a house worth $75,000? Most markets don't have houses in that price point. Every area has a different "rule of thumb" and the rule changes as the rates change, but in my area, with typical debt like car payments, student loans, and credit card, the average buyer can afford 3.75 X's their salary. At $50k, that means they could buy a house with typical 3.5% FHA or 5% conventional at $187,500.

Is it wise to spend at your limit? No. Many of my buyers stay around the 2.5-3 x's their income to keep a buffer. Many people max out their limit based on 1 income in a 2 income family so they can keep the other income for other stuff.

Many of the banks and brokers in my area have a $70-75k limit on loans that they will not go below. They don't get paid enough for them, and the rates are higher for the borrow so they don't make sense to do. In areas where that price point is the norm, the banks more readily do those loans.
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Old 02-06-2013, 03:59 PM
 
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I thought that the reason the housing market is the way it is because people borrowed too much,meaning someone thought it was wise to lend 250,000 to someone making 50,000.
I guess the difference in my area is that the taxes will end up being more than the mortgage per month. Using the mortgage calculator,the monthly mortgage would be 275 but the taxes 350 per month,plus homeowners insurance $50.
The more house,the more taxes. So if I did want to purchase a home in the 180,000 range.my monthly taxes would be scary: $700 per month(that's actually my sisters taxes,and the actual amount she paid for her home).
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Old 02-07-2013, 02:01 AM
 
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You are using the wrong yardstick. I'd buy a million dollar house at 1% but a much lesser house at a 10% rate,.


Your total monthly bills, including everything on your credit report, and the house payment, including taxes and insurance and HOA, should be less than half your total gross monthly income, according to fha/va/usda.

45% for Conventional loans in most cases.

LESS if your comfort zone dictates as such.
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