I live in Austin, Texas if that makes any difference.
Thanks,
Rob
A lot easier than 5% down these days. Your credit score and household income will still matter though. Are the other fundamentals like those in good shape? People are still getting mortgages if that is a subtle part of your question.
Is the rule still that mortgage payments should be no more than 29% of your salary?
Thanks,
Rob
For what its worth… I have been per-approved for a mortgage worth 2.5x my annual salary, with a 25% down payment. I have pretty good credit (750+) but one of the mortgage providers wanted proof of FIVE active credit cards (or other crediit sources) on my credit history! (I have one, and pay the f(%#er off on time). That seemed completely counter-intuitive to me, I wouldn’t lend money to someone with five credit cards, irregardless of thier credit score. The lender I went with was not that fussy, but did need two years complete tax returns (in addition to W2s), and pay slips.
This is in Northern California.
They are looking for a history of your ability to manage credit. Multiple credit cards with high limits and very low balances make future creditors happy. It proves you can manage your finances, and that many creditors trust you.
I do kinda see that, but lending money to five ACTIVE credit cards is just asking for trouble. Especially as the credit history is relatively short term, the fact you’ve kept it together for the last three years (I think that’s the limit of records in your credit history), does not mean you’ve kept those five credit cards under control before that, or you will still be able to when you add a whoping mortgage on top of that.
Active just means activated, I would imagine. I’d meet that requirement, but I can’t think of when I’ve ever had a balance – even for a few days – on more than one.
Anecdotally, 20% got them to look past a lot of my sins. Of course, all the outstanding non-average no-pay debt had to be paid. It wasn’t too bad and that was several years ago.
I suspect the lenders will like you, and YAY, no PMI.
If you are willing to pay 30% down and assuming you have a good credit score most mortgage lenders will probably bend down and kiss your feet or other things at this point.
I managed to qualify with 0 down, they really seem to weigh credit rating above all else. I had a slightly over 800 credit rating and had the same job for 15 years. This was during the housing boom in 2003-2004 so of course your ymmv. I seriously doubt you will have any problem.
I think you may have been a little myopic as far as determining credit sources goes. Don’t utilities count? It’s a lot more than just pieces of plastic with Visa, Master Card, American Express, or Discover imprinted on them.
Approval of a mortgage is personal. While you are receiving anecdotal stories from fellow Dopers, none of them have your personal/economic/geographic history.
The only factual answer you will receive that will have a direct bearing is when you pose the question to your lenders.
How do you come to the value of the home. ? That is a big problem. No body actually knows what houses are worth.
The “pay off bad debt first” rule is for FHA loans (which are the only type “nice” people ever hear of). “FHA” meaning the loan meets the requirements for instant sale to Fannie, Freddie, anyone who buys mortgages.
If the loan does not meet FHA standards, well…
With 30% down, even hard money (which is equity-based, not income or FICO based) will listen to you - you won’t like what they say (12% plus 5 points), but it is there.
Otherwise, it is back-to-basics in the mortgage business - good income, good credit - dance the same dance your grandparents did.
Back when credit ratings actually meant something, anybody coming in with 20% down, steady income, and actually wanted to buy a house to live in and not speculate… should have no problem getting a loan in any market.
Aren’t all anecdotal stories sort of meaningless if they didn’t happen in the last 10 days? Everything is different now, or so I thought. Money is hard to come by, so I think a conversation with your lender in reference to TODAY’S economy is going to be different from the conversation you would have had in August.
I am going to try to co-sign a loan shortly, and I have no idea how that’s gonna go. I’ll just have to wait and see.
If you meet traditional guidelines you should still be a good buyer in the eyes of a mortgage lender (20% down, good credit rating (yours is pretty high, imo), steady job/income verifiable by W-2s, and a good mortgage expense to income ratio in light of all other expenses (I think 37% is considered high)). Value of the house and all the other underwriter stuff is to prevent you/bank from taking on too much risk and to prevent fraud.