The conventional wisdom is that it’s “really hard” right now to get approved for a mortgage unless you have 20% down and near-perfect credit. Yet, people continue to buy houses constantly. Anecdotally, I know a co-worker and a casual acquaintance that just bought houses that are definitely “as much as they can afford” (and maybe just a little beyond), each of which I know didn’t have much or any to put down and don’t make that much to begin with.
What’s the story? What’s the actual climate like, or is this something that varies by location? Are banks being more stingy and careful in some areas than others?
We got an FHA loan, 30 year fixed at 5.5% with 10% down with not much of a problem. We had gone to both of our banks and they said no way in hell without 20% and then we hit up a mortgage broker with a lot of FHA experience and it worked out nicely. Didn’t cost us a dime extra, and we didn’t need to jump through too many hoops.
It seemed that credit score was kind of important (she was at 720, I was at 670, we just left me off the finance package) and the number they really cared about was debt-to-income ratio.
ETA: this was this summer, we put in an offer in mid-June, once it was accepted (contingent on financing) we told the broker to hop-to, and had prelim approval in 2 weeks, closed in late July.
It took me a phone call to my bank and about 30 minutes worth of filling out paperwork to get preapproved for more money than I wanted to spend.
Just closed a week ago on a condo at 5.5% with 10% down. My parents actually provided all of the down payment, so my dad and I were the cosigners. Like picker, my wife’s credit score wasn’t as good as mine, so we left her off (and my dad’s was better than my mom’s, even though it was her inheritance money). The underwriter did want to know the exact parameters under which I could withdraw from my 401(k), because I need to be able to provide 5% down, even if I didn’t actually do it. Oh, and as we were waiting for final approval from the title company at the very end of the closing, I suddenly came down with a searing pain in the kidney, due to a 5mm stone, so there pay have been an undocumented karmic price.
I closed my first mortgage ever in May. NO down. USDA loan at 5%. Total cash in, about $3000.
$116,000. with 6percent seller cash back to escrow costs. USDA loan I got is for rural area only though. Not hard at all. Approved for $150,000, more than I was willing to spend.