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I like dual-income buyers to qualify on one income.
It takes a lot of tension out of the deal when they are working within reasonable and affordable means.
There is nothing quite like a Friday closing where the buyer has to produce their paystub for that day to get funded.
BTDT.
Location: Finally the house is done and we are in Port St. Lucie!
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No.
When first starting out, as first time buyers, I think we found the house and then applied for the loan. Waiting to see if we were approved was nerve wrecking. That was back in my early 20's.
Now in my mid 50's, we did get pre-approval and we were approved for WAY more than we were willing to go. If we had bought in that price range, say goodbye to traveling, vacations and any other fun stuff....unless we saved up for such things.
I like having the luxury to decide to do something and then acting on it immediately.
I like dual-income buyers to qualify on one income.
It takes a lot of tension out of the deal when they are working within reasonable and affordable means.
There is nothing quite like a Friday closing where the buyer has to produce their paystub for that day to get funded.
BTDT.
Yes, our lender actually talked us out of both being on the loan as we didn't need to be. Just makes it easier!
Yikes-- that would be nerve wracking! I have had periods where I lived paycheck to paycheck but wow, that is some serious risk taking to have to bring a paystub to closing to prove you can get a loan! Do you ever try to counsel someone like that down a different path?
When first starting out, as first time buyers, I think we found the house and then applied for the loan. Waiting to see if we were approved was nerve wrecking. That was back in my early 20's.
Now in my mid 50's, we did get pre-approval and we were approved for WAY more than we were willing to go. If we had bought in that price range, say goodbye to traveling, vacations and any other fun stuff....unless we saved up for such things.
I like having the luxury to decide to do something and then acting on it immediately.
I think it is really about what your priorities are.
We are buying a place that is a bit of a fixer, nothing too bad, but on arguably the best street in a small state capital which tends to have pricey real estate. We could have just sunk all of our budget into a house, but we would have never been able to leave it.
For my first house, I did and I don't regret it for one minute. When you don't make much money, you tend to have to do that. Its great if you make 100k in your 20's but that was not me. I made like 29K when I bought my first house. I was approved for 77K and I spent 75K. That was in 2003. I sold that house for 94K in 2006 when I moved to Texas. Now, I make more money and don't have to spend up to what I get approved for to get a good decent house.. But when you don't make much money, you do what you have to do.
Depends on where you decide to live. I wanted a condo, so had to take HOA into account. Was approved for 150k, but had to find something significantly cheaper to truly afford it. Ended up borrowing only 88k.
For my current mortgage, I wouldn't even let them tell me what they'd approve me for. I told them what I wanted to spend, and was approved to that amount. I capped it at about 118% of my annual income. Since I owed about $4K on a car loan and $15K on student loans, I obviously would have been approved for more than double what I asked for.
The first time, in 2008, I made $30K a year and they approved me for $150k I took out $113K, which was fine until I needed major repairs and had used my savings on repairing the house to livable standards (it was a HUD foreclosure). I had to put it on a credit card, and then I was on a cycle of never paying down my credit cards for the next 8 years. That is why I did things a lot differently this time around!
Same. I had a max dollar amount I was willing to spend and was approved up to that. I have no idea to what amount they would let me go.
The majority of buyers find something between their max payment and the max payment I give them, but almost all are well below my max payment.
But there's max qualified and max qualified on paper. I have a doctor that is easily pulling in 45K per month, however, on paper he doesn't break 30K per month, all because of an investment that's showing losses on paper. This scenario can be demonstrated just the same, maybe better, if it were a buyer making 45K per year, but on paper we can't only count it as 30K per year. Many times there are cases where the "rules" on calculating income do not represent reality. We see that too many times. If it's a conventional loan, there are safeguards in place. We must meet the Ability to Repay (ATR), or be prepared to face the Piper if they default.
But it is very rare these days to have someone wanting a bigger loan than they can carry. Usually, these borrowers are the same borrower with the credit history that is questionable or is overextended. We also will have their agents tell us we just have to find a way to make this work. It starts off as high stress and is that way all the way to the credit decision. And to round off the questionable buyer, these are usually the same ones that don't follow instructions (apply for a credit card during processing) or every single piece of paper is toxic. ( Each document adds another requirement - such as large deposits on statements, sketchy tax returns, sudden salary bump because YTD on pay doesn't jive). When things start unraveling, I have never had anyone suggest the buyer may have just bitten off more than they can chew and a loan denial would serve them better. No, the pressure to get the loan approved just intensifies.
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I took out $113K, which was fine until I needed major repairs and had used my savings on repairing the house to livable standards (it was a HUD foreclosure). I had to put it on a credit card, and then I was on a cycle of never paying down my credit cards for the next 8 years. That is why I did things a lot differently this time around!
