Getting a mortgage-impossible?

[tnd]

We did this last year when we decided to buy a larger home in a better school district. We haven't even rented out our old house (it's a goal for this summer!) but our income was high enough, we had a 10% down payment and very high credit scores. We also have huge student loan debt, but no consumer debt which I think helped. At the end of the day, it is all about the debt-to-income ratio. We went through our own bank, which I think helped because they could see our account was in good shape. It's certainly worth a try.

 

[Tink-aholic]

Let me give you some background. I have a townhouse that I rent out because the area tanked with the economy. I live elsewhere and don't pay rent so I'm saving tons of money. I'm not going to be able to sell the townhouse for a few years because the market is saturated with foreclosures and short sales.

DBF and I are thinking about looking at houses. I'm concerned that there is no way anyone would let me buy another house even though we will have a good down payment, my salary is double what it was when I bought my townhouse so I have enough income to pay both mortgages, and savings to cover any gaps in renters. I'm thinking DBF would have to be on the mortgage alone, which would drastically reduce what he would get approved for. I have no debt other than my mortgage and a car payment. Am I doomed if we try to get a mortgage together? I understand banks are being super cautious, but we could take one of those houses of their hands if they would let us.

I am honestly surprised no one else has suggested this, but if you are making double what you were making when you bought your townhouse and have no other debt besides your car and aren't even paying rent, why don't you just pay it off before getting the next mortgage? How long could that take? Depending upon your salary and level of commitment, it could be a few more months to a couple of years, right?

 

[starry_solo]

In the process of doing a refi on our house, approved contingent on the appraisal.. We need it to appraise at $149K, 2 recent comps I have found in our area are two houses that sold for $130K and $139K and they are both about 1200 SQF, our house is 1800 SQF.. condition of the 2 houses are the same as ours..

Is the appraised value based solely on comp values to the point that we shouldn't worry???

I wouldn't worry. The bank appraisal will adjust upwards for the larger square footage of your house. If you think about it, even if they go with the median ($134500), an extra $14500 for 600 SF seems reasonable (that's a little more than $20/SF).

 

[DumboPrincess]

Lots of good advice, but wanted to throw in my two cents. I could have written this post. What jumps out at me is no debt other than mortgage; ie, no credit cards. Same deal here. Our preapproval fell through because we had no "recent credit" even though we've had a mortage 10 years with no lates! (We've now opened a master card and are charging groceries,gas, etc and paying weekly so no balance is carried, but it will add a "recent" history to our credit file.)

Long story short: even though no debt is ideal, and no mortgage or car payment is better, the loan officers still consider you risky because you haven't "recently" shown a history of charging and paying off.

I see so many posts about paying items off and having no debt, which is where our ideal should be. Unfortunately, credit is a "game" that you have to play unless you can save long enough to buy a car or house outright. This was so eye opening for me the last few months!