(Closed) mortgage help, please!

posted 8 years ago in Home
Post # 17
Member
13094 posts
Honey Beekeeper
  • Wedding: July 2010

We just bought our house in March so I’ll share.

DH and I combined make ~$105-$110K.  We got pre-approved for $270,000 but we could have been approved for much more.  The way our broker operated, instead of approving you for the max possible based on your incomes, they just pre-approve you for a little bit more than the max you want to spend.

We got approved for a 30 year conventional mortgage at 3.875%.  We put down 8% as down-payment.  We could have put more (but couldn’t have gotten to 20%) but it would have had no affect on our interest rate so we felt we were better off keeping some extra cash in our accounts.

It was very easy for us to get approved for this and, as I said, our broker said we could have been approved for much more (we just didn’t want to spend that much).

Post # 18
Member
2622 posts
Sugar bee
  • Wedding: November 1999

Another factor is your current debt. School loans, car loans, credit card debt. Plus how much savings you have and as others have said, credit score, work history.

Its tough to estimate, but go ahead and apply for a preapproval and that will give you the best idea.

I found we were approved for way more than we were actually comfortable paying. Be sure to know what your monthly payments would be (taxes and insurance included) plus expected utility costs to ensure you are not buying too much house for yourselves.

Because of our savings and credit we were approved for almost 4x’s what we make. 

Post # 20
Member
65 posts
Worker bee
  • Wedding: June 2011

I know that all states are different but my DH and I wanted to just see where we stand, and talked to our bank and we were approved for (well this what we asked to be approved for, and she said we could get more but we made a budget and only asked for what we felt comfortable financing) 115K for a house loan, and that was on a 33K a year salary. (We just used my DH income, because I will be student teaching next year so that is 4 months with no income, and we can be approved without my income so we did it that way, just to be safe) 

It was a 30 year conventional loan at 3.325%, we have 5% down…. (We havent picked a home yet) I hope that helps you!! 🙂

Post # 21
Member
1660 posts
Bumble bee
  • Wedding: October 2011

We were pre-approved for 5x what we make – which is just crazy! Our credit scores are 770+ and we do not have debt aside from the mortgage on the house we currently own.  We’re in the process of buying a house that is 2x what we make, with a conventional 30-year loan, 20% down, and an interest rate of 3.25%. (I don’t know how painful/easy the underwriting process will be at this point). Anyway, that was the amount that felt comfortable to us, and actually a fair amount more than we originally planned on spending.

Good luck!

Post # 22
Member
363 posts
Helper bee
  • Wedding: April 2013

View original reply
@futuremrsk18:  Together we make a little over $90k, pay about $1200/month in student loans, have zero debt other than the loans and were approved for about $300k as long as we put down about 25%. With your high student loan debt, it might be iffy for $200k. You should really go talk to the loan officer so they can give you a better idea.

One thing that was really frustrating for us was that they seemed to caculate our debt based on the max amount of student loan repayment that could possibly be due instead of what was. For example, one of our loans was lower than the max because we are on income based repayment. Instead of counting our monthly payment at the reduced rate because we weren’t making enough to pay the max, they calculated it at the max because they seem to want to do all of their calculations based on the worst possible calculations they can think of to take on the least amount of risk. It was incredibly irritating because if our loans went up to the max due it would be because we were also making a lot more money, but they didn’t want to take that into account.

Good luck! Our offer was accepted 2 months ago and we still don’t have a decision on the mortgage Yell

 

eta: FI’s credit was over 800 and mine was about 775

Post # 23
Member
7308 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Our loan experience was very easy. We were told by our mortgage guy that he would have no problem pre-approving us for 4.5-5x our annual income. However, we were only willing to spend 2.37x our annual income. We chose that amount because we wanted to be able to afford the monthly payment (principal, interest, taxes, and insurance) on the lower of our 2 salaries.

We got a conventional 80/20 loan at a 3.5% interest rate, and paid 0.75 points to secure that rate. Buying points means that you pay more cash upfront in order to get a lower interest rate. Buying the 3/4 point cost us about $7k, and will save us more than $30k over the lifetime of our loan. Since this is our forever home, it made total financial sense to spend the extra cash upfront.

Our scores were in the higs 700s-low 800s, we only have 1 item of debt (a car loan that is equal to 10% of our annual income), we had plenty of cash for the downpayment + closing costs + 6 month emergency fund, none of the money we had was a gift or of a questionable source, and we both had 6+ years at our respective employers. Our mortgage guy said we were the easiest loan of the 120 he was dealing with at that time.  If you set yourself up correctly, the process will be straightforward and fairly painless. I don’t say totally painless, because watching our account drop by 6 figures in one day hurt a lot. like stomach churning, heartburn inducing, woe is me hurt… but it was worth it. 🙂  

Post # 25
Member
69 posts
Worker bee
  • Wedding: May 2013

We went with a VA mortgage since e was prior military and they don’t require down payments. We were approved 4x our yearly salary. With credit scores of 770 and 680? Closing cost will be around 16k.

 

Just fill out a prea approval from the bank. It’s a great tool to bring to the table for negotiating with the seller.

Post # 26
Member
1721 posts
Bumble bee
  • Wedding: March 2013

We got approved on FI’s salary alone (75k) for $305k. I make 31k but we plan on me working only part time to none at all when we have babies so that we could easily afford the mortgage on his salary alone. The house we are purchasing is 239,000, so well below that $305k. With PMI, Tax, and insurance, our payment will be $1300 per month

Post # 27
Member
98 posts
Worker bee
  • Wedding: January 2013

We were approved for 155K based on his salary only (50K a year) with an interest rate of 4.25% last year.  We only had to put down 5% for a conventioal loan but do have to pay PMI till our equity hits 20%.

Post # 28
Member
8434 posts
Bumble Beekeeper
  • Wedding: April 2013

My Fiance and I recently purchased a home in June 2012 and we were approved for $185K on his salary ($50k) and I don’t work.   Our home ended up being $150k and our payments (tax, homeowners ins., and mortgage) is less than $775 a month.  We have a 30 year at 3.75%, but no PMI.

Post # 29
Member
2455 posts
Buzzing bee

We just closed on our house on Friday. 

We ended up getting the loan just in DH’s name because his credit score is near perfect (over 800). Our loan is just about 3x his salary. 

We got an awesome interest rate of 3.25% (with me it would have been 3.5%) and put 10% down on a conventional loan. 

Post # 31
Member
692 posts
Busy bee
  • Wedding: March 2013

Check out your city  hall for any first time home buyers programs. Those will help with closing costs and stuff.  This is an awesome thread. Thanks so much for those of you who are sharing personal info. It really puts things into perspective. I am also on the school loan boat. Together we’re 70k ish in debt.  We also need a new car and aren’t sure if we should do that before or after getting a house because they’ll factor that in. We make about 53k together. We also just moved to a small town where houses are on the market for a while. It’s kind of scary buying and feeling like “what if I have to sell and there is nobody to buy?” lol 

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