|
Termyn8or -> RE: need advice from someone that knows about home loans (6/5/2008 6:11:34 PM)
|
There is a formula they use for that. I don't have enough information, but I can say this much, if he is trying to buy a house for ten times his annual income you'll have that. For example if he makes say 35K a year and wants to buy a house for 350K.
If you don't want to give out figures how many times his income is the house ? But that doesn't work totally because let's say you make 350K a year and want a 3.5M house. The actual numbers matter because in the latter situation there is alot more disposable income. In the former situation there is a chance of losing the house in foreclosure.
If people here know him you might not want to reveal the figures, I agree that it is generally nobody's business. But to answer this question effectively more information is needed.
There is alittle secret to this thing too that not everybody knows. You can lie about your income. I highly recommend against this, you can get yourself into alot of trouble. You won't go to jail, but you can lose alot. I know someone who almost bought a business that way. It was a bar and it was back when bars made money. They actually approved the loan after he simply got the blank tax returns and filled them out "creatively". He just figured out of the money he made he would pay the payment. It actually went through but the guy caught cancer and died, the purchase was not made, but the loan was approved.
But the difference is that this was a running business with profits, not a private home. Sometimes it may be worth the risk, but you have to know exactly what you are doing. And you better have the first payment or you can be charged with fraud. But once you make the first payment you would rarely, if ever, have any criminal problems. Of course that is Ohio law. It's also perjury, but see if you make the damn payments the issue never comes up. This works because the IRS is not allowed to disclose any information.
One guy won a million dollar lawsuit against the IRS because of this. It is set in the code, a hundred grand per infraction, and they disclosed information ten times. Also your employer will not generally give out that information either. You can tell them anything you want, but it is alot better not to, believe me. Laws may have changed, and if they haven't they are likely to very soon.
And did he only go to one bank ? Shop around. Another lender might be a point higher on interest, but really if he has the 50% downstroke, getting that down to 20% would result in a nice slush fund. Just don't spend it - for the same reasons that one lender asked for such an exhorbitant downstroke. He could lose the job at any time.
Actually the best course of action is to get prequalified before you even go house hunting.
In 89 we bought a double for about a third of our annual income. Took it on fifteen because it shaved a whole point off the interest compared to a thirty year. The loan amount did not change, but back then there was a decent economy going and it became more like one fifth of annual income. Paid it off early. I had a full time job, a part time job and a small home based business. Now I am not making as much money, but then I don't have to because there is no house payment.
If you get a lender to require less of a downstroke, that is nice, you have money in the bank. Now here's the tripup that happens to alot of people, they got a slush fund and they immediately have to spend it. They might go to a Hummer dealer or Jacuzzis r us. Who knows.
I know money is the worst thing to have, but with a new job and a new house the situation is different. Ya can't spread yourself too thin. You have to be sensible because we are in tough times right now. The last thing you want is to get your dream house and then go into default. Sometimes it is better to buy under your means and be more assured of being able to keep it.
They asked for fifty percent down for a reason, and perhaps HE should explore that reason. And I think alot of people who have a credit rating under 700 are going to be turned down or given terms like this, a high downstroke or a high payment. That is how it is in light of what has happened. They are thinking of prosecuting people over all these foreclosures and I understand why any lending institution would raise the bar so to speak.
And last but most - DO NOT GET AN ADJUSTABLE RATE OR GRADUATED RATE. If you can't get a fixed rate loan on a house, pay the fucking rent. I mean that. Either that or buy WAAAAAAY under your means, like a fixer upper and get some sweat equity into it. Always keep a slush fund though, because today you have no idea what might happen. Look at a house, look at the foundation and ythe roof.
Dammit, I can't fix that typo, that means it is time for a reboot. But I am pretty much done really. I'll be back, but the point is, be sensible, if you don't you could be right back where you started, actually worse off.
T
|
|
|
|
