Thursday, June 19, 2008

Mortage Lender Says Ha Ha Ha!

Ok, so I consider myself very up on the news and current events. And not just that Jamie Spears had a baby, but current events as well. And yes, I've heard about the subprime mortgage drama going on and how it's screwing up the economy. Lalala. But somehow I really didn't think this would impact Boyfriend's quest to purchase a condo.

Hey, last year a mortgage broker pre-qualified ME for an $80k mortage which I turned down because it wasn't enough to buy a cute house with a yard and a driveway (what was I thinking? I could have gotten a condo with that much and would probably started becoming more aware of my finances after going through the process). Alas, what a difference a year makes.

Boyfriend went to Lending Tree and filled out all the pre-qualification forms and by the time I had come home had gotten 4 "Approved" notices from 4 different lenders. The devil is in the details, however, as it seems there is not a snowball's chance in hell he is getting a mortgage without at least 5 % down.

And why is this? He credit score is about 750. His income is almost TRIPLE the median FAMILY income for our area and his debts are less than $10k. But, money talks, and he has none, well practically none.

I knew all about FHA loans and that you could get a mortgage with only 3 percent down if you were a first time homebuyer so we figured on a $125k(target) condo he would only need about $4k. Alas, FHA loans are not available in all condos. The mortgage broker he spoke to told him he should get a house instead. As if!

And, before you ask, why does Boyfriend have no cash? Well, I guess that's his story, but it may have a little something to do with the fabulous ten day vacation we took in April.

I even have fancy pictures to show for it. But, we're learning our lesson and a condo is just about 7 months of saving away. Perhaps by that time we'll be ready to live together!


Anonymous said...

First off, I am so gald you dint get into subprime mortagage mess last year with 80K mortgage. Secondly, If your bf doesnt have 3%, he is NOT ready buy anything.I dont really understand how people think that they can buy a house with no downpayment or min. and be better off.We are not planning to buy a house without 20% downpayment which is 70K. It is going to be easy but we have a plave we will have peace of mind.I can not still believe your bf even considering buying a place...

Anonymous said...

I meant to say it is not going to be easy to save 70K:)I wish it was easy :))

pennypincher said...

That drink looks fabulous. That is exactly what I need/technically "want" right now.

Sallie's Niece said...

Yes Chicky, I'm mostly glad I didn't do that also though I wish I had wised up to my finances a year ago. It sucks paying rent every month when for the same amount I could be building wealth.

As for Boyfriend, he has learned there is no easy way into home ownership available right now and is committed to saving.

And Penny, you can have that drink for $8 (+ a plane ticket haha)!

Jim ~ said...

Right now is a great time to buy a home, as long as you have money. I bought my house 2 years ago and was able to get around the 'down payment' situation by doing an 80/20 loan. My house came with about 5% equity so I was borrowing less than the house value at time. Fast track today and I doubt I could sell it for what I currently owe. Don't buy a home, condo, duplex, single family, without having some money for a down payment AND an emergency fund. Right after I moved in and we got to summer the AC was broken. Lucky for me with a background in electronics I was able to crack that puppy open and replace a part some places charge $100 bucks for only $3 from an electronics supply store.

Another word of advice is if he buys a house, make sure he doesn't need your help to do it. It protects both of you becoming stuck in a mortgage and such. Start saving up and maybe he'll be ready to purchase later in the year. BTW that drink reminds me of something I got at the swim up bar in Jamaica.

Sallie's Niece said...

Yeah he doesn't need my help to buy it (though I did offer to do the closing for free!) but it would mean adjusting his (our?) lifestyle a tad. How does a home come with equity BTW? I don't know everything about the process (though I took a class last summer when I was considering it for myself).

Anonymous said...

nonononono :) This market is not a GREAT market to buy. It is going to go down even more. Foreclosures everywhere it is a buyers market. Also buying home with these fancy loans not a good idea. I say at least 10% better 20%.

Jim ~ said...

My house came with equity because the value of it was higher than what was mortgaged on it. Basically if I would have turned around and sold it for the value it was at, I'd make money off of it. Instead we stayed there and now 2 years later I most likely owe more than my house is worth. It's a little depressing but every mortgage payment I make helps balance it out a little bit more. Property taxes also are a pain in the butt too because while the house value isn't going up, yet the taxes I pay each year do. There's a lot of stuff you have to consider when buying, not just the mortgage payment.

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