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I'm guessing my wife and I are in the same boat as a lot of people and dont have the big down payment but with prices bottoming and rates so low we are trying to see if we can try to buy. We have good credit (750's), dont have any car payments, minimal credit card balances and make 173k per year. We would like to buy a house that would be about 530-550k. Does anyone think we could get approved for a loan at less than 20% down? We live in Chicago burbs if that matters.
I think the bank is going to question why you have so little savings given your income. Yes, Chicago is expensive, but it's not that expensive. Unless your monthly housing expense will actually go down, if I were an underwriter I'd be concerned with your lack of savings as well as payment shock.
You can always get an FHA. That is what we just got approved for since we don't have 20% that is required now for a regular loan. FHA only makes you put 3 1/2%- 5% down.
Chicago62, you can buy a perfectly nice house in the Chicago suburbs for a lot less than that. We live in Naperville, which has some very expensive homes, as I'm sure you are aware. But there are very comfortable four-bedroom homes in our area in the low $300Ks and less. I just can't fathom spending that much for a house, especially if you don't have a lot of savings. Why not get something less expensive, pay your mortgage easily, and put the money you saved in the bank? Retire early. Go on vacation.
You can always get an FHA. That is what we just got approved for since we don't have 20% that is required now for a regular loan. FHA only makes you put 3 1/2%- 5% down.
FHA lending limits for the Chicago area are $410,000.
I'm guessing my wife and I are in the same boat as a lot of people and dont have the big down payment but with prices bottoming and rates so low we are trying to see if we can try to buy. We have good credit (750's), dont have any car payments, minimal credit card balances and make 173k per year. We would like to buy a house that would be about 530-550k. Does anyone think we could get approved for a loan at less than 20% down? We live in Chicago burbs if that matters.
Are you paying attention to the current housing crisis? Do you realize what caused it?
How secure is your job and your wifes job?
Ok, with all of that said you would have no problem getting approved for that amount with less than 20% down. I would highly suggest you think through a purchase of that size though. My wife and I make more than you and we have a 350k house. When you start getting up over 500k things can get dangerous really quickly. Please... live within your means. Ask yourself if you can make it on one salary IF YOU HAD TO, could you do it? If not, you should consider cheaper option.
Keeping up with the jones sucks. I've been there and done that.
If you consider that 3 times your gross salary should be your top mortgage, it'd be 519K in your case, so lower than what you'd wish to spend on. However, 2 to 2.5 times is more prudent, that's also if you have a big enough emergency fund in case you lose your job. It's a basic need in this economy.
So that'd be 346-432.5K. How much money do you have for a downpayment? Could you put down 20% in that price range?
You also say you have minimal credit card balances. To get the best mortgage rate (and peace of mind!), you should keep it at zero, especially two months before you apply for a mortgage (even if you pay it in full).
You both make a lot of money. You should be able to pay that off and save easily if you cut back on expenses. Good luck!
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