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26 Comments on You Need This Much Money to Buy a House
Chris: Thanks for the post. I always like it when I see one of my mortgage brothers featured. I wish you well!
Kenny - The underwriting software that Fannie Mae and Freddie Mac have determines the riskiness of the loan. The software analyzes all aspects of the borrower's loan file: income, assets, credit, employment history, housing history, etc. If Fannie and Freddie's statistics show that the borrower is likely to repay the loan, then it gets approved. The amount of reserves that a borrower has is only one part of what determines the risk. It would seem to make sense that the more money someone has in the bank, the less likely they are to go into default, but there is much more to the picture than that. Many people with no reserves always pay their mortgages, and many people with lots of money in the bank do not.
Thanks Chris for the detailed explaination. It makes all sense. It gives me more insight how a lender approves a loan. Great information. Thanks again for sharing.
Chris, plus, if you're a qualified Veteran, you can get a VA loan for what, $100 down? If you want to purchase a home, it's not as difficult as most people think.
Getting a loan approved is easy.....I have not read those words in a long time. Thanks for letting me know it is still possible.
Thanks will share with the team.
I'm sure every Realto and lender get that question asked at least once a week. After reading your blog, I think I need another page on my website to touch on this subject. Thanks!
Hi Chris, great breakdown, I wonder if it's too simple and nobody will get it... ;-)
Good information. People truly do not realize how much they need to plop down to buy a home.
Hi Chris,
Coveniently, our forthcoming Transaction Intelligence® tool works backwards from a prospective homebuyer's "constraints" to quickly answer Home Purchase Power and layout a detailed purchase scenario.
The tool also takes another step to analyze each practical rate/cost alternative and conclude the buyer's "financially correct" choice. Thousands in future equity depend on this choice.
Test drive Beta at www.mortgeniusbrands.com/
Not sure that getting a loan is always that easy. Especially nowadays. But you're right in that if you have your ducks lined up it sure makes the process flow a lot smoother.
Why is it that you think that a borrower with other properties is a higher risk and thus needs to have higher cash reserves than someone without any other assets?
Hi Chris or if they are doing USDA (most of our market) they can get it for no money down!
Bob Crane - The riskiness of a loan is determined by the percentage of past loans with the same attributes that have gone into foreclosure. People who multiple properties go into foreclosure at a higher rate than people who only own one house.
I am glad that my small banker appreciates the excess collateral that I bring to the table.
Good information. but more importantly DTI is the biggest challenge I've encountered during the last several years.
Talk to a good LOCAL lender, one who knows your market, and does the paperwork locally. It adds to the process if you are working across several time zones to get answers.
I think some people are completely unaware of how affordable homes really are. Great post.
Chris:
You make it sound so easy. I wish it were that easy, but I suppose if the mortgage broker knows what they are doing the loan process can be easier.