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Mini Skirts and Straw Hats - Part 9 On Mortgage Affordability

The wrap-up on raising skirts...

Who wears straw hats with mini skirts? No, I haven't lost my mind. And I'm not starting a new fashion trend either. But I do have mortgage affordability on my mind.

Lesson One: The bank says I can afford HOW much?

We can't rely on the bank for mortgage affordability

The bank hasn't a clue when it comes to how much we can afford in monthly house payments. Mortgage institutions qualify a borrower based on corporate and investor criteria. This might happen to line up with the amount of mortgage we can afford but don't count on it. We are each in charge of determining how much we can afford.

Lesson Two: Don't rely on the banks to remember

I've been asked recently if the banks have learned any lessons from the collapse of the system. I hope so but I'm not holding my breath.

After all, who has suffered most? Joe the homeowner. And that means you and me. So it is up to us to make sure we chart a different course for the future of homeownership by considering mortgage affordability.

Lesson Three: Resist the temptation of extremes

First, mini skirts, raising the skirt hems. Flappers. Excitement and abundance. Legs!

Next, doom and gloom. Pessimism. No legs

Joe the homeowner deserves better!

Lesson Four: Consider straw hats

J. Paul Getty got it right. Even though he was one of the wealthiest individuals in America, he focused on straw hats.

More here on mini skirts and straw hats. Common sense versus the extremes. A strong tomorrow for homeowners. Mortgage affordability.

Go Joe!

Get 'em all: Part One Part Two Part Three

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Posted by Kate Ford Mortgage Translator on 09/29/2009 10:29 AM

Comments (16)

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16 Comments on Mini Skirts and Straw Hats - Part 9 On Mortgage Affordability

SEP

Kate,

Nutsy was first to read this, got the point and he went out and bought me a nice straw hat. I think those fashion tips you gave him are paying off big for me.

Hi Kate ~ Yes, the common sense approach. I like that. For instance let's take young couples: They may have two incomes now and a significant disposable income...Getting married? Having kids? Think down the road a bit. It may not take much for the disposable income to change. The Lender doesn't look at the future. It looks at the past and present.

Steven, The hat, I hope, reflects your consideration as we'll never believe a squirrel could get the point of mortgage affordability. I suggest following J. Paul Getty versus Nutsy in the future for best results. You should pass that on to Nutsy's two other friends also.

Denise, exactly. The bank takes care of itself, its investors. High time Joe the home buyer learns it is up to him to watch out for his own mortgage affordability. After all, Joe knows his stuff the best! Thanks for coming in to comment.

Another twist is debt ratios vs. residual/disposable income. 38% debt ratios may rock a lender's world. But 38% of a $2000 salary vs. 38% of a $10,000 salary can make the difference between affording a mortgage or not, even though debt ratio criteria has been met in both instances. Kate

I have also heard the "I'm qualified for a lot more than I ever would have expected." And I try my best to give the "can you really afford the payment" talk. Straw hats in the fall is right.

Susan, It is also not uncommon for "afford" and "qualify" to be interchanged as synonyms. Straw hats in the fall! Kate

I really don't think things have changed much at all. I still see people buying homes that have no business doing so and putting hardly anything down. The more things change the more.........

All the more reason to stress mortgage affordability versus mortgage qualification, right? Thanks for commenting Jane. Kate

My first home I bought myself my second my wife and I bought together. I was thinking straw hats she was thinking mansion. Thankfully sense won out over emotion and we and our girls are in a comfortable home we can afford.

Now I'm not getting email notices. What's up with that?

James, I like your straw hat house. Buy them in the fall. Kate

SEP

Mrs Kate,

Due to your displeasing personality, I have asked AR to cut off your Email notices.

Nutsy

Nutsy,

A little early for Halloween, eh?

But while we're here and speaking of Halloween...

Nevada with its frontier legacy, has a holiday at the end of each October. Although coinciding with Halloween, Nevada Day is a separate celebration to commemorate our entrance into the Union. We became the 36th state on October 31, 1864.

Ms. Kate