Take a look at what Michael asked me today. "I was recently laid off from my job. I was... getting ready to start my kick-off on my real estate portfolio." He asked me how he could proceed with buying a house.
I don't know enough about Michael to know if he should or shouldn't buy a house as an investor without a job. But I could offer him this advice: Whether or not a home buyer gets loan approval, it is the responsibility (and right) of every borrower to determine whether or not the mortgage is affordable.
Borrowing Kennedy's Inaugural Address =>
"Ask not what your country can do for you but what you can do for your country."
Let's make it applicable to the current housing market =>
"Ask not what the bank will loan you until you ask first what you can afford." (ok, so much for my sayings...)
Take for instance, one year acceptable debt ratios are 28%/36%. Another type of mortgage program sits at 29%/41%. Yet another set of ratios accepts 55%/55%. Which is correct? Which is reliable?
If we have learned anything from the last few years, it is that every home buyer, every mortgage borrower must first question what is affordable instead of depending on lender's qualifying debt ratios for an answer.
It's a good lesson to learn. This one little lesson supports the dream of home ownership. Mortgage affordability, that's what it's all about!
Your MortgageBuddy on Twitter,
Kate Ford
Free sign-up. Free link. Free promotion. Did I say free? => List of Mortgage Companies, a mortgage lender directory
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I wish people could self regulate and determine for themselves what is TRULY affordable for them. But alas, people's avarice is often times larger than their bank accounts. As a Realtor I try to advise my buyers not to stretch themselves so as not to be in the same situation that many find themselves in today. Good post and best of luck.