NorthCounty4, since you say that you haven’t even gotten into the home details yet with the lenders, then perhaps it’s that the 90% LTV would be non-conforming (is that the right term?) loan. The key being >546K loan AND having <20% down.
In the bubble days, when I bought a house with less than 20% down, I got 2 loans, one for 80% of the sale price, and another one - a Home equity line of credit (HELOC) interest only for the (20%-DownPayment). Nowadays, for my price ranges there are no more interest only loans like that, since I asked. I qualified though to buy up to a 700K house with 5-10% down with FHA loan, which is not a good deal usually. (this was Chase) (and, no, I don't think we can afford 700K home, and we aren't buying yet).
If that is true, I agree with CONCHO, that means all the higher end houses are in trouble, because it may mean that only people with enough downpayment to bring the loan under 546K (i.e. even more than 20%) would be qualified. For example people who bought homes low and sold high or otherwise make very profitable investements. I agree with CONCHO, if people like you can’t buy a 800K house with 10% down, who will?
I know quite a few here hammered on 20% down, like in the old days. I would agree with that, ONLY IF the prices were like in the old days, adjusted for inflation of course. If the banks are so stringent with the loans, then it should bring prices down in short order, because how many would qualify?!
NC4, I think you deserve a lot of congratulations on how well you managed to save that much money, and save for retirement and college too. Take pride in that. Good for you! Yes, you deserve a nice house with enough room for your family, if you managed your money so well. I think some people here are actually quite envious and they wish they were in your shoes at age 30. (I wish that too, BTW. We are older, and we’ll never be in your financial situation.). If you made such wise decisions so far, please re-think the buying a home now, it’s not a good idea. Don’t think with your heart, and your nesting instinct. Yes you could, and you deserve,etc., but this is not the right time. Patience! Nobody has to BUY anything. You can rent it. Try to think of alternatives out-of-the-box. Rent a larger house if you really need to for your increasing household, and try to sell or rent your current one. Or, put up with the inconvenience of your townhome and continue to save until you get your 20% down of your dream home. Perhaps you can re-route some of your retirement or college monthly savings toward downpayment for a couple years. Your savings will go up AND prices will go down. And it will happen rather soon, probably just in 1-2 years. And I bet the rates won’t increase much at all.
