BEWARE of that screwball mortgage math

By
Mortgage and Lending with Fairway Independent Mortgage Company 385907

sometimes I just look at what I'm doing, shake my head, and say God help us.

the new or most recent mortgage math says that we can allow a buyer, including a first time homebuyer, to use up to 50% or more of their "gross" income towards their PITI and toal monthly debt.

does this seem a bit insane to you?

do you know anyone who gets to use/spend their "gross" income.

me neither

so when I'm doing the buyer this favor, I need to stop and wonder

am I really helping them or am I doing them a disfavor.

Let me stop her, and inject another thought before going on.

this is why when a buyer asks me what they can afford I respond,

"I don't know."

dear Mr. and Mrs Buyer you need to decide that. I can only tell you what you can qualify for.

sometimes you might be able to "afford" more, and sometimes less.

that brings me back to that 50% (of gross), "how much of the buyers "net" is that?

55-60% or more?

That's pretty scary to me.

the residual income left to pay for some of those luxuries like

FOOD

may not be very much

so to some/many first time buyers I should say,

Congratulations, you have just married your home.

All I'm really trying to say to all of the homebuyers, especially the first time homebuyers, and to all of us who may influence them, stop and think about what you're doing before proceeding. It's a big responsibility, not to be taken lightly, and

Beware, watch out for that screwball mortgage math.Ā 

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Topic:
Home Buying
Location:
Florida St Lucie County
Groups:
RealtorsĀ®
Keller Williams 'Rainers
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1st Time Buyers
Posts to Localism
Tags:
palm beach county
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martin county
indian river county
first time homebuyers
st lucie county

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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Unless a home buyer has a reliable and adequate source of income in addition to what is earned by employment/savings, etc., the percentage of about 30% is the only SAFE way to buy.

Aug 03, 2014 10:48 PM #1
Rainmaker
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Jay Beckingham
Fairway Independent Mortgage Company - Delray Beach, FL
"I love first time homebuyers"

Lenn,

back when i started we used 25/33 for adjustables, and 28/36 for fixed, with very few exceptions. when we moved to 33/38 for fixed, we thought we were just so liberal, and flexible...things have changed.

Aug 03, 2014 10:52 PM #2
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Rainmaker
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Jay Beckingham

"I love first time homebuyers"
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