Homes and Finances - One big PITA

[HannibalX]

The wife and I thought we were going to purchase a home this year. We found the home we want and have been pre-qualified for a mortgage for over a year now thru our credit union. We are set to make an offer on the home and go into the credit union to make sure all our paperwork is in order.

Now come to find out we aren't going to be approved for the mortgage because we aren't putting enough down. Sheeshe. The mortgage person also told us we wouldn't be able to afford the monthly payment of $1300/month either with our annual income. I was like "Huh?". I pay $1,225/month in rent right now and have for the last year - where do these people get these figures?!? I think I can swing the extra $75/month. :roll:

We aren't rich by any means but we certainly are not poor. We have a combined income of about $74k/year. My wife just moved into a new position with her company as well and will be getting a raise come the first of the year.

So I explain to the mortgage person that we already pay xxx/month and we make xxx/month and next year will be making more than that. It was like was talking to a brick wall. "Let me run it through the computer again - no I'm sorry you can't afford this loan, can you put more money down?" Damnit if people can't make decisions anymore without a computer. Anyone who can do simple math can figure out we can afford the loan.

We went to two other places to get a mortgage and it was the same thing with them.

We are first time home buyers as well, but unfortunately because both go to work and work hard and don't use well-fare there isn't any program to help us with the down payment. So people who are giving it all they have at life are entitled to NO help meanwhile worthless deadbeats who are undeserving get all the help.

:roll:

 

[BlueWeasel]

What's your current debt-to-income ratio?

 

[HannibalX]

The only debt I have is a car payment and a Shell gas card.

 

[waggy]

something is screwed up. or we are not getting the full story.

 

[HannibalX]

Originally posted by: waggy
something is screwed up. or we are not getting the full story.

Yeah something is screwed up alright. We didn't renew our lease so I have to go find a new apartment tomorrow.

 

[spidey07]

That's too much house for that salary/income. Sorry. It's really that simple.

You could look at first time home buyers.

 

[IHateMyJob2004]

You pay rent now.

Later on, you'll have the same bills and taxes and repairs and periodic maintenance ... etc etc etc

How does your current rent deal with energy costs? Is that included in your monthly rental cost or do you have to pay for your hot water extra?

The Google can help you out to see what mortgage companies look at. There are some simple formulas they use to figure out what you can afford.

 

[IHateMyJob2004]

Originally posted by: spidey07
That's too much house for that salary/income. Sorry. It's really that simple.

You could look at first time home buyers.

I did an FHA loan my first time around. Not bad if you can't get the 20% down. PMI does suck though.

 

[HannibalX]

Originally posted by: IHateMyJob2004
You pay rent now.

Later on, you'll have the same bills and taxes and repairs and periodic maintenance ... etc etc etc

How does your current rent deal with energy costs? Is that included in your monthly rental cost or do you have to pay for your hot water extra?

The Google can help you out to see what mortgage companies look at. There are some simple formulas they use to figure out what you can afford.

My rent includes the roof over my head. I pay all utilities out of pocket. Everything is electric here in FL and I generally pay about $200/month electric bill. Water/trash/sewer from the city is like $25/month.

 

[dquan97]

credit score/report?

 

[HannibalX]

Originally posted by: spidey07
That's too much house for that salary/income. Sorry. It's really that simple.

You could look at first time home buyers.

You have to make a ridiculously low annual salary to qualify for any of the first time buyer programs/down payment assistance programs. For a two person house hold you have to make like 30k or less - well we both work so that?s out.

Now if I was a bum working part time and sitting on my ass the rest of the time making $10k/year I could get a $15k check from HUD for the down payment ? that with the cash I have for the down payment would be over 20%. The home we are looking at is $170k.

 

[waggy]

Originally posted by: Trinitron

Originally posted by: IHateMyJob2004
You pay rent now.

Later on, you'll have the same bills and taxes and repairs and periodic maintenance ... etc etc etc

How does your current rent deal with energy costs? Is that included in your monthly rental cost or do you have to pay for your hot water extra?

The Google can help you out to see what mortgage companies look at. There are some simple formulas they use to figure out what you can afford.

My rent includes the roof over my head. I pay all utilities out of pocket. Everything is electric here in FL and I generally pay about $200/month electric bill. Water/trash/sewer from the city is like $25/month.

how are taxes? i pay nearly as much in taxes each month then i do for the mortgage heh

 

[HannibalX]

Originally posted by: dquan97
credit score/report?

680 for me, 650 for the wife.

 

[HannibalX]

Originally posted by: waggy

Originally posted by: Trinitron

Originally posted by: IHateMyJob2004
You pay rent now.

Later on, you'll have the same bills and taxes and repairs and periodic maintenance ... etc etc etc

How does your current rent deal with energy costs? Is that included in your monthly rental cost or do you have to pay for your hot water extra?

The Google can help you out to see what mortgage companies look at. There are some simple formulas they use to figure out what you can afford.

My rent includes the roof over my head. I pay all utilities out of pocket. Everything is electric here in FL and I generally pay about $200/month electric bill. Water/trash/sewer from the city is like $25/month.

how are taxes? i pay nearly as much in taxes each month then i do for the mortgage heh

Taxes on the home are like 2k/year.

 

[IHateMyJob2004]

Originally posted by: Trinitron

Originally posted by: IHateMyJob2004
You pay rent now.

Later on, you'll have the same bills and taxes and repairs and periodic maintenance ... etc etc etc

How does your current rent deal with energy costs? Is that included in your monthly rental cost or do you have to pay for your hot water extra?

The Google can help you out to see what mortgage companies look at. There are some simple formulas they use to figure out what you can afford.

My rent includes the roof over my head. I pay all utilities out of pocket. Everything is electric here in FL and I generally pay about $200/month electric bill. Water/trash/sewer from the city is like $25/month.

EDIT: Saw your credit ratings ... good ....

regardless .... you got rejected by multiple places for a mortgage. THe math simply doesn't work somewhere. Go read up on how they figure out what you can afford. The google is your friend here. Even wikipedia probably has the info.

Are you putting 20 down? What are mortgage rates like in FL?

Your probably looking at affording a $250K-$300K home if you put 20% down. From your salary, I'm shocked you didn't get approved.

Any other bills? Do you pay off your credit cards each month? Any car payments?

 

[IHateMyJob2004]

Go try these out:
http://finance.yahoo.com/loan/mortgage/calculators_index

 

[spidey07]

Originally posted by: Trinitron

Originally posted by: dquan97
credit score/report?

680 for me, 650 for the wife.

bingo. That's why.

 

[compressor]

You can do it! Keep positive!
Consider working with a knowledgable Realtor who can explain and help you through
the entire home buying process including loans and refer you to reputable loan officers..
They are there to help and it will not cost you anything as a Buyer to utilize their expertise.
But make sure it is a Realtor, not just a real estate agent.
There is a difference. Consider signing a Buyer Agency if your state offers it.
Again it does not cost you anything and puts a professional Realtor to work for you in your best interest.
Ask trusted friends for names.

Go to Fannie Mae or Freddie Mac or HUD
and read the tips for home buyers and different types of mortgages.

Don't give up. Call other lenders and ask if they have any zero down
loan packages or first time home buyers programs.
Or check into an adustable rate loan. You may be able to get a teaser rate for the first
few years that will allow you to get your payments down and qualify.
Refinance later to a more conventional loan.

Remember, you are the client of the lender.
They need you as much as you need them.
Ask lots of questions. (tell them I said to)

Your credit rating is important but there are lenders that will offer home loans
to "B" credit as well. You will probably have to pay a higher interest rate to start
however.

Try to eliminate as much current debt you have. Pay off credit cards and outstanding bills. It all helps. Make sure to not be late with any payments including utilities. It is reported to credit agencies.

DO YOUR HOMEWORK AND EDUCATE YOURSELF. And read the fine print.
There are predatory lenders who would take advantage of you.

Despite the doom and gloom you see in the press about the real estate market,
the time to buy is always NOW and it has become a Buyers market.
The hoops you may have to jump through will quickly fade away the first time you
open the door to your new home.
It is still the safest investment you can make
for your financial future.
And again, hire a Realtor as a Buyer Agent to help.

Good luck!

(p.s. in the interest of full disclosure, I am a licensed Realtor)

 

[spidey07]

Originally posted by: compressor
(p.s. in the interest of full disclosure, I am a licensed Realtor)

LOL, like it wasn't obvious from the post.

Zero Down financing!!! Yes you too can ruin your life! Sign here!

 

[JasonE4]

Originally posted by: IHateMyJob2004

Originally posted by: spidey07
That's too much house for that salary/income. Sorry. It's really that simple.

You could look at first time home buyers.

I did an FHA loan my first time around. Not bad if you can't get the 20% down. PMI does suck though.

PMI is deductible starting in 2007. I'm thinking about buying a house a lot sooner now (I graduate college this May).

 

[shortspanishguy]

Im a settlement agent and my best friend is a Loan Officer.

If you wanna give me your # I can pass it along to him.

 

[compressor]

Zero Down financing!!! Yes you too can ruin your life! Sign here!

Zero down financing does not "ruin your life".
I have gotten many first time home buyers into their first homes with such programs
over the years and they are still grateful.
It provides a way for people with little or no down payment to get into a house.
After a year or two you refinance into a conventional loan.
I actually call them the end of each year to remind them to consider refinancing
if they haven't already. I care about my clients.
It is done safely by thousands of people across the nation all the time.
That type of misinformation with no facts is why he should have a Buyer Agent represent him and his best interest.
It will all be explained to him, pros and cons so he can make an informed decision.

 

[waggy]

Originally posted by: Trinitron

Originally posted by: dquan97
credit score/report?

680 for me, 650 for the wife.

holly ******! those are not good.


how can you get so low with makeing a good amount? you might look at where you are spending money. sheesh.

but you should still be able ot get a loan. my wife's sister has credit as bad and she has a mortgage.

 

[bctbct]

Thats a pretty good sized payment and being a homeowner you will find that there are many more expenses.

Why not start out a little samller and then move up just to be safe when your income increases.

 

[shortspanishguy]

Originally posted by: compressor
Zero down financing does not "ruin your life".
I have gotten many first time home buyers into their first homes with such programs
over the years and they are still grateful.
It provides a way for people with little or no down payment to get into a house.
After a year or two you refinance into a conventional loan.
I actually call them the end of each year to remind them to consider refinancing
if they haven't already. I care about my clients.
It is done safely by thousands of people across the nation all the time.
That type of misinformation with no facts is why he should have a Buyer Agent represent him and his best interest.
It will all be explained to him, pros and cons so he can make an informed decision.

You are correct. I've seen no issues with zero down thus far.