Chances of buying an REO or short-sale without 20% down?

[Scarlett]

Cash flow criterion works, Patientrenter!
[quote=patientrenter]
Scarlett, I am sure that you are a wonderful person, but if it would take you “years and years” to save 10% of the price of the home you want to buy, then you cannot afford it. The only way you can “afford” it is if its price only goes up, not down. That is never guaranteed. It is widespread denial of the simple ‘cash flow’ criterion for affordability that got the entire economy into its current fix.[/quote]

We have $170K income and excellend FICO scores. If we can’t afford a decent 4 br house that now goes for 550-600K, how many can then? By “years and years” I meant more like 5 years in the current conditions, playing it safe by first putting away money for college and retirement, before saving for down payment.

I am paying rent of $2700 and save ~$1000 per month, after retirement, college fund savings. I think in terms of cash flow, assuming steady income, it works just fine. With $3600 total PITI and 10% down, I could buy something quite decent right now, instead of waiting those 5 years. I don’t care much if the prices don’t go up, though it would be nice.

What if in 5 yrs the rates are over 10-15% and the prices haven’t dropped dramatically (though they probably would, with those rates)? I may not be able to afford the monthly payment then, even if I have 20% down. Why wait (except for prices to decline further)? Why should I turn off all the other savings and live in a crappy place in order to save that those money in couple years instead? What’s wrong in this case to buy now with only 10% down?

I can tell you what’s wrong. You are right, it shouldn’t take us years to come up with an extra 10%, when you have 170K yearly income, even with that high of a rent. The house market is still so much out of whack. The prices should be HALF of what they are now!!! Ok, maybe not quite half, but at most 66%. Then yes, I’d have 20% down right now. Well, I am waiting, maybe they will go down that much in a couple years. I think they will.

Scarlett

[HLS]

Scarlett, you need to get qualified for a loan.

For loan amounts below $417K, at the moment, there are 95% FNMA loans available with a mid credit score of 700+ This can change at any time.

As far as I’m concerned, FHA loans are like assigned risk auto insurance. If you are willing to pay the price, they will deal with you.

They represent more risk and will cost you much more than if you have a larger down payment.

If the loan amount is $417K-$546K in San Diego County you will need at least 15% down for FNMA
or
3.5% down for FHA loans up to $546K in San Diego County..

These are the guidelines for FNMA or FHA to buy the loans. I don’t know of lenders that make exceptions the way people seem to think.

Lenders/banks dont make money lending their money for 30 years on fixed mortgagges. They MUST meet the guidelines to be sold to FHA or FNMA. Then they are bundled into MBS.

Rates can be higher at banks, and programs or knowledge of the bank employee can be limited, the same applies to mortgage brokers.

You should find someone to work with regarding a loan. You need to KNOW that you qualify for a loan before you even start thinking about buying a house, not just assuming that you qualify.
Some of the guidelines are crazy. LOTS of people don’t qualify, but think that they do.

I doubt that the chances will increase to lend to really risky borrowers again for a very long time; that’s what got the world into this mess.

The current guidelines already allow for people that probably shouldn’t be buying homes to buy them. Not as silly as a couple of years ago, but still pretty silly. …HLS

[HLS]

Scarlett, you need to get qualified for a loan.

For loan amounts below $417K, at the moment, there are 95% FNMA loans available with a mid credit score of 700+ This can change at any time.

As far as I’m concerned, FHA loans are like assigned risk auto insurance. If you are willing to pay the price, they will deal with you.

They represent more risk and will cost you much more than if you have a larger down payment.

If the loan amount is $417K-$546K in San Diego County you will need at least 15% down for FNMA
or
3.5% down for FHA loans up to $546K in San Diego County..

These are the guidelines for FNMA or FHA to buy the loans. I don’t know of lenders that make exceptions the way people seem to think.

Lenders/banks dont make money lending their money for 30 years on fixed mortgagges. They MUST meet the guidelines to be sold to FHA or FNMA. Then they are bundled into MBS.

Rates can be higher at banks, and programs or knowledge of the bank employee can be limited, the same applies to mortgage brokers.

You should find someone to work with regarding a loan. You need to KNOW that you qualify for a loan before you even start thinking about buying a house, not just assuming that you qualify.
Some of the guidelines are crazy. LOTS of people don’t qualify, but think that they do.

I doubt that the chances will increase to lend to really risky borrowers again for a very long time; that’s what got the world into this mess.

The current guidelines already allow for people that probably shouldn’t be buying homes to buy them. Not as silly as a couple of years ago, but still pretty silly. …HLS

[HLS]

Scarlett, you need to get qualified for a loan.

For loan amounts below $417K, at the moment, there are 95% FNMA loans available with a mid credit score of 700+ This can change at any time.

As far as I’m concerned, FHA loans are like assigned risk auto insurance. If you are willing to pay the price, they will deal with you.

They represent more risk and will cost you much more than if you have a larger down payment.

If the loan amount is $417K-$546K in San Diego County you will need at least 15% down for FNMA
or
3.5% down for FHA loans up to $546K in San Diego County..

These are the guidelines for FNMA or FHA to buy the loans. I don’t know of lenders that make exceptions the way people seem to think.

Lenders/banks dont make money lending their money for 30 years on fixed mortgagges. They MUST meet the guidelines to be sold to FHA or FNMA. Then they are bundled into MBS.

Rates can be higher at banks, and programs or knowledge of the bank employee can be limited, the same applies to mortgage brokers.

You should find someone to work with regarding a loan. You need to KNOW that you qualify for a loan before you even start thinking about buying a house, not just assuming that you qualify.
Some of the guidelines are crazy. LOTS of people don’t qualify, but think that they do.

I doubt that the chances will increase to lend to really risky borrowers again for a very long time; that’s what got the world into this mess.

The current guidelines already allow for people that probably shouldn’t be buying homes to buy them. Not as silly as a couple of years ago, but still pretty silly. …HLS

[HLS]

Scarlett, you need to get qualified for a loan.

For loan amounts below $417K, at the moment, there are 95% FNMA loans available with a mid credit score of 700+ This can change at any time.

As far as I’m concerned, FHA loans are like assigned risk auto insurance. If you are willing to pay the price, they will deal with you.

They represent more risk and will cost you much more than if you have a larger down payment.

If the loan amount is $417K-$546K in San Diego County you will need at least 15% down for FNMA
or
3.5% down for FHA loans up to $546K in San Diego County..

These are the guidelines for FNMA or FHA to buy the loans. I don’t know of lenders that make exceptions the way people seem to think.

Lenders/banks dont make money lending their money for 30 years on fixed mortgagges. They MUST meet the guidelines to be sold to FHA or FNMA. Then they are bundled into MBS.

Rates can be higher at banks, and programs or knowledge of the bank employee can be limited, the same applies to mortgage brokers.

You should find someone to work with regarding a loan. You need to KNOW that you qualify for a loan before you even start thinking about buying a house, not just assuming that you qualify.
Some of the guidelines are crazy. LOTS of people don’t qualify, but think that they do.

I doubt that the chances will increase to lend to really risky borrowers again for a very long time; that’s what got the world into this mess.

The current guidelines already allow for people that probably shouldn’t be buying homes to buy them. Not as silly as a couple of years ago, but still pretty silly. …HLS

[HLS]

Scarlett, you need to get qualified for a loan.

For loan amounts below $417K, at the moment, there are 95% FNMA loans available with a mid credit score of 700+ This can change at any time.

As far as I’m concerned, FHA loans are like assigned risk auto insurance. If you are willing to pay the price, they will deal with you.

They represent more risk and will cost you much more than if you have a larger down payment.

If the loan amount is $417K-$546K in San Diego County you will need at least 15% down for FNMA
or
3.5% down for FHA loans up to $546K in San Diego County..

These are the guidelines for FNMA or FHA to buy the loans. I don’t know of lenders that make exceptions the way people seem to think.

Lenders/banks dont make money lending their money for 30 years on fixed mortgagges. They MUST meet the guidelines to be sold to FHA or FNMA. Then they are bundled into MBS.

Rates can be higher at banks, and programs or knowledge of the bank employee can be limited, the same applies to mortgage brokers.

You should find someone to work with regarding a loan. You need to KNOW that you qualify for a loan before you even start thinking about buying a house, not just assuming that you qualify.
Some of the guidelines are crazy. LOTS of people don’t qualify, but think that they do.

I doubt that the chances will increase to lend to really risky borrowers again for a very long time; that’s what got the world into this mess.

The current guidelines already allow for people that probably shouldn’t be buying homes to buy them. Not as silly as a couple of years ago, but still pretty silly. …HLS

[Scarlett]

HLS, I was pre-qualified with Chase. For $500K loan with 10% down , or if I wanted only 5% down, an FHA loan; that was about 6 months ago. I have stopped looking actively so I haven’t updated my pre-qual. I don’t remember all the details, since I wasn’t too serious about buying, but I doubt I wouldn’t qualify now.

[Scarlett]

HLS, I was pre-qualified with Chase. For $500K loan with 10% down , or if I wanted only 5% down, an FHA loan; that was about 6 months ago. I have stopped looking actively so I haven’t updated my pre-qual. I don’t remember all the details, since I wasn’t too serious about buying, but I doubt I wouldn’t qualify now.

[Scarlett]

HLS, I was pre-qualified with Chase. For $500K loan with 10% down , or if I wanted only 5% down, an FHA loan; that was about 6 months ago. I have stopped looking actively so I haven’t updated my pre-qual. I don’t remember all the details, since I wasn’t too serious about buying, but I doubt I wouldn’t qualify now.

[Scarlett]

HLS, I was pre-qualified with Chase. For $500K loan with 10% down , or if I wanted only 5% down, an FHA loan; that was about 6 months ago. I have stopped looking actively so I haven’t updated my pre-qual. I don’t remember all the details, since I wasn’t too serious about buying, but I doubt I wouldn’t qualify now.

[Scarlett]

HLS, I was pre-qualified with Chase. For $500K loan with 10% down , or if I wanted only 5% down, an FHA loan; that was about 6 months ago. I have stopped looking actively so I haven’t updated my pre-qual. I don’t remember all the details, since I wasn’t too serious about buying, but I doubt I wouldn’t qualify now.

[HLS]

Sorry, I was confused. If you know that you will qualify, what was the point of your post ??

Do you think that REO sellers don’t deal with approved buyers ??

The seller wants money. They don’t care where it comes from. They get their money at close of escrow regardless of whether it’s a cash buyer OR from a loan.

The seller has nothing to do with the amount of the buyer’s down payment. Most seller’s just want the highest price they can get.

I’m still confused by your original question.

[HLS]

Sorry, I was confused. If you know that you will qualify, what was the point of your post ??

Do you think that REO sellers don’t deal with approved buyers ??

The seller wants money. They don’t care where it comes from. They get their money at close of escrow regardless of whether it’s a cash buyer OR from a loan.

The seller has nothing to do with the amount of the buyer’s down payment. Most seller’s just want the highest price they can get.

I’m still confused by your original question.

[HLS]

Sorry, I was confused. If you know that you will qualify, what was the point of your post ??

Do you think that REO sellers don’t deal with approved buyers ??

The seller wants money. They don’t care where it comes from. They get their money at close of escrow regardless of whether it’s a cash buyer OR from a loan.

The seller has nothing to do with the amount of the buyer’s down payment. Most seller’s just want the highest price they can get.

I’m still confused by your original question.

[HLS]

Sorry, I was confused. If you know that you will qualify, what was the point of your post ??

Do you think that REO sellers don’t deal with approved buyers ??

The seller wants money. They don’t care where it comes from. They get their money at close of escrow regardless of whether it’s a cash buyer OR from a loan.

The seller has nothing to do with the amount of the buyer’s down payment. Most seller’s just want the highest price they can get.

I’m still confused by your original question.

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