Home buying thread

splorge said:

why would a bank not approve you up to the maximum allowed according to their policy?

it seems inefficient to give a yes/no answer to an arbitrary number, instead of saying you are approved up to and including X.

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I actually had a bitch of a time dealing with lenders and this. They kept asking our price range and we"d be like "well we are looking in the 250k-300k range but we don"t know what our max range is?" We weren"t too worried about going for our max price because both of us will be making a lot more money 12 months from now.

They kept going right down the middle and "pre-approving" us for like 275k but wouldn"t tell us what our max was. We"d ask if that was our max and they"d be like "oh if you find something higher we can probably do more, but that is a good starting point" we"d ask how much more and they"d just kind of give us the run around.

This made house-hunting very frustrating but we eventually found a lender who told us flat out "your max price is $290k w/ us" who also had the best rates and lowest closing costs we"d seen so far so that was good. As long as they were competitive I was going with them since they didn"t dick us around though.

They are probably starting to do that to keep people from buying more house than they can afford. That is a major reason why the housing market is in the shape that it is.

banks have formulas that dictate how they approve loans, whether it be pre approval in the US, or after the fact like where i live in asia (you cant even talk to a bank until you show them a sale and purchase agreement for a property).

mostly it revolves around financial figures like net positive average monthly cash flow for a period of time (usually 1-2 years), previously existing debt, whether or not income is supplemented by a third party etc.

the property in question will affect terms like the tenure of the loan, the valuation, the loan ratio, etc.

both the financial and property details can affect interest rates, depending on how risky they see the property or existing debt.

based on financial records which are normally made available to the bank, and the property in question, the bank will apply their formula to dictate terms of the loan, which can vary from bank to bank depending on how aggressive they are at the time in acquiring mortgage market share.

the system in the US is a little more relaxed, but thats what contributed to the mortgage mess.

if a person isnt qualified for a specific amount, then the bank shouldn"t approve that loan. the point of the vetting process is that the determination of what people can afford is NOT left up to them, its left up to the bank.

the bank knows much better than people what their realistic chances are of repaying the loan.

TheCutlery said:

It"s not an arbitrary number. It"s 10k more than I wanted to spend. That seems pretty reasonable to me. Why bother trying to get me preapproved for 350k when I don"t want to spend 350k?

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it costs the bank time and money to approve someone, so it makes sense to reduce the number of approvals/person. if you find a property at 100k, then one at 150k, then one at 200k that would require 3 approvals if you only asked for the valuation.

if you know exactly the amount you want to spend then its not necessary, but property investors often wait a while for a good deal to appear, then snatch it up. its impossible to say whether the good deal will cost 200k or 500k.

Would you all suggest going to a Realtor first and use the lender they suggest or hit up a bank and do that independant of the Realtor? We just starting this process and first thing is to figure out how much we can get. Looking at the houston house market should be able to find at least a 1800 square foot house made in the last 10 years for about 90k fairly easy.

We just moved into our first home. I checked out some lenders on my own (mainly by their current rates) and if they offered free pre approvals, I called them. Some charge $150 + just to tell you that you can afford x amount of dollars...fuck that noise.

As far as realtors/buyers agent, we didn"t use one, so don"t take my advice on that. Personally though, our realtor was a lazy asshole and I realized everything he was doing half assed I could do while I was "working". Checking out other homes for sale/sold in the area, how long they are/were on the market, listing prices, etc. I"m sure a realtor/buyers agent is helpful depending on your situation and maybe could have saved us some money, but we were happy with the price we were able to negotiate.

Depends on the realtor. Definitely ask for recommendations but most good ones won"t have a problem with you shopping around. I talked to maybe 3 or 4 banks. Some of them just ignored state programs that can get you lower interest rates for part of the loan and our realtor promptly informed us that was shitty and not to go with them.

+1 for the free pre approvals. One even did it over the phone, gave him some info, took maybe 45 minutes and called me back. You could probably get by without a realtor, but having access to the MLS is awesome. My girlfriend"s dad has his license so I could use his log in and see that someone has tried to sell their house 3 times in the last 5 years and failed every time and dropped the price every time. Shit like that helps negotiate a ton.

That was quick thanks all, using this websiteHouston Real Estate - Houston Homes, Houston Home Value and Houston Relocationcan even search by area or what school your child we be going to and has links to school rating and population broken down by race. Good stuff.

Hatorade said:

Would you all suggest going to a Realtor first and use the lender they suggest or hit up a bank and do that independant of the Realtor? We just starting this process and first thing is to figure out how much we can get. Looking at the houston house market should be able to find at least a 1800 square foot house made in the last 10 years for about 90k fairly easy.

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You got > 20% down?

Lyenae said:

You got > 20% down?

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Yeah more then that too for closing costs if we have to pay those. Been saving our asses off for 6 or so years now, minus a motorcycle haha.

Hatorade said:

Yeah more then that too for closing costs if we have to pay those. Been saving our asses off for 6 or so years now, minus a motorcycle haha.

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If you can front 20% down you should have no problem getting a loan anywhere.

Hatorade said:

Yeah more then that too for closing costs if we have to pay those. Been saving our asses off for 6 or so years now, minus a motorcycle haha.

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Move towww.bridgeland.com. Seriously. I am almost there.

Pics of my house being built:

Bah didnt see the 90k

Dis said:

Bah didnt see the 90k

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Yeah we don"t make much but aren"t retarded with our money either, 100k or lower 30 year loan(hopefully paid off in 15-20) will allow us to keep same lifestyle. We have no debt at all just rent, car insurance, life insurance.

House is looking good man, exciting stuff.

Also how do you not use a realtor? Aren"t all properties tied to a realtor unless being sold by owner?

Hatorade said:

Yeah we don"t make much but aren"t retarded with our money either, 100k or lower 30 year loan(hopefully paid off in 15-20) will allow us to keep same lifestyle. We have no debt at all just rent, car insurance, life insurance.

House is looking good man, exciting stuff.

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Hey fuck it, its all good. I just read your last post, didnt see your first inquiry. Ill be the exact opposite of you, broke as fuck . I have been promised a raise at the end of this year, so we will see how much the raise will offset my increase in house payment.

What side of town are you looking to move to?

Edit: Also I (wife mainly) will be throwing a small get together to show off the house. I should have the XBOX set up, Modern warefare 2 will be out. You and James can come over if you like. PM me if you are interested, BBQ, beer and XBOX. My wife can entertain your wife. James can entertain everyone.