As I mentioned before, we are looking to get a mortgage so we can buy the condo we found. I went to 3 banks this week. I still have a few other places I am going to check out, as well.
Heard back from Bank S. The good news in, we were approved for a mortgage for the amount we need to buy the condo! The bad news is we can’t afford what the monthly payment will be.
We were hoping for a 30-year mortgage of about $70,000 with 7% interest. We were told he would accept an offer for $65,000 so the extra $5,000 was for closing fees and all that good stuff. Taxes are about $600 a year, but do not have to be paid monthly, and we know we can save $600 a year for them. Taking all that into consideration, the monthly mortgage amount and condo fees are pretty much equal to what we pay now for rent.
However, Bank S offered us a mortgage with 7.9% interest. They also want us to pay the closing fees separate (about $2,500), and then want us to pay $50 a month towards taxes. Add all this together and it comes out to be about $150 more a month that we can afford.
Bastards.
Also heard from Bank C. Same deal pretty much. We were approved, but the interest is so high the monthly payments will be more than what we can afford.
So, I don’t know what to do. They won’t go lower on the interest because 1. We have no down payment, 2. Our credit score isn’t really high, and 3. Our “debt to income” ration is high. Well, hello?? Making us pay $150 more a month doesn’t help that! I guess we just wait until we hear back from some of the other places we applied and keep looking for a better deal.
It’s hard. I am very excited to know that we can get approved for a mortgage. But it is disheartening to know we really can’t afford the one they are offering us.
The only option we have, besides waiting to hear back from Bank B, is to have a small down payment. With a down payment (even only 5%), we can get a different loan from either if these banks with a lower interest rate. Problem is, where do we just randomly get $3,500?
Mums offered to loan it to us. But I’m not sure how I feel about that considering how much I already owe her. I really wanted to do this on our own. I totally appreciate her offer, but I hate doing that: taking more money from her. Her and Dads are hoping to retire in a few years (they’re already 60 and 61!) and I do NOT want to take money from their retirement.
Damn-it-all.
Realities of affording a mortgage
June 15th, 2007 at 04:41 pm
June 15th, 2007 at 05:15 pm 1181927737
June 15th, 2007 at 06:14 pm 1181931283
June 16th, 2007 at 12:14 am 1181952879
How long would it take you to pay off the remaining 2 CCs and then save up a 5% down payment (saving at the rate you are currently paying down on the CCs)?
If you had a 5% down payment and a lower debt-to-income ratio (due to paying off the CCs), you could probably get a much better rate!
Belive me, I know how very hard it is to wait when you want something so basic as your own home, but sometimes waiting a bit creates a much better situation in the long run.
June 16th, 2007 at 02:39 am 1181961561
I have decided not to borrow the money from Mums. If we do this, we want to do it on our own.
Thanks for the advice everyone - and no, I'm not mad for any suggestions that we should wait.
June 16th, 2007 at 02:55 am 1181962527
Is there anything else you can sell on e-bay or half.com or have a garage sale to work on raising a down payment? Any extra free lance work you can take in? Can you or your boyfriend get a second job long enough to save up for a downpayment?
June 16th, 2007 at 07:29 am 1181978961
I loaned my sister the downpayment for her first home. I felt really happy that i could help her out, and she made it a point to pay me in full over a few months.