Posted on: 05th Dec, 2012 10:40 pm
What is the general opinion these days on affordability? What pre-requisites are considered for financial prudence when purchasing a home? In past decades it used to be 20% down, 6+ months of seasoned reserves, no more than 35% of gross spent to service housing costs PLUS all debts and no more than 25% of gross to service all housing costs (PITI/HOA/Misc. taxes/Maintenance). Is all that out the window in today's environment of super high home prices? What are the standards today?
You can check out the given mortgage affordability calculator in order know better: http://www.mortgagefit.com/calculators/howmuch-afford.html .
Welcome Guest,
You should note that for conventional loan, you should have 20% down payment, a stable income, 2 years of employment history, 720-740 credit scores, etc. In case of FHA loan, you will require a credit score of around 620 and a down payment of 3.5% - 5%, etc.
You should note that for conventional loan, you should have 20% down payment, a stable income, 2 years of employment history, 720-740 credit scores, etc. In case of FHA loan, you will require a credit score of around 620 and a down payment of 3.5% - 5%, etc.
You have to submit proper documents to prove your continuous employment and income. If you are self employed, you have to submit, copies of your past 2 years tax returns. Proper documentation has become very important these days.
Here, I want to note that 20% down payment is more of a misconception. 10% down payment is fine with conforming loans. For FHA loan, this is 3.5%. For VA loans and USDA loans, no down payment is required at all.
The last post was made by me.