Property Virgins

Mrs.Simpson2010

So I saw another post related to this show... Does anyone else cringe when they see the $ of down payment and then the $ of mortgage they are given? Isn't this what got us into this financial crisis in the first place?? My FI Matt and I watch this, and he is horrified at how many people put so little down and then are stuck with such high monthly payments. Does everyone else pretty much assume you have to put around 20% down or else you can't really (realistically) afford it? Don't get me started on Sandra...

tracyd21

I think ideally you should put 20% down, but we certainly did not and we can afford our payments just fine. I think it's different for everyone, really. My DH and I are pretty good at sticking to our monthly budget, so we could manage doing an FHA mortgage, which is only 3.5% down with a seller's assist (which we used to buy down our interest rate). We also bought under what our pre-approval was for, too. I think it's more important to look at what you can afford each month, rather than the overall loan approval. That's where people tend to get in over their heads - buying something just because a bank said they could afford it. I have to believe that some of these episodes are pretty old; I doubt there is a single bank in the US that would approve a loan for 100% financing anymore! So many people on that show don't have any money to put down - I would never feel comfortable with that!

Mrs.Simpson2010

I understand that not everyone can realistically put down 20% and are ok with it financially. I just can't believe some of these episodes (probably later ones like you said) where they put down almost nothing and got crazy approvals. I saw one last night where they put down 20,000 and got an $800,000 house! And that Sandra lady was totally pushing it!

tracyd21

Well she is just ridiculous - always showing houses above price ranges. Then she gets all "well you said you wanted to live in this neighborhood..."

samanthas8882

I am totally with Tracy on this one and she described our situation too - you must stay within your budget. They say your total mortgage payment should not be more than 28 or 28% of your total income (This includes Real Estate taxes, Homeowners, etc) Also your total Debt to income ratio with your mortgage and student loans, etc should not be more than 36% but they will let you go to 40ish % with FHA. However, our mortgage guy said when people get close to 40%, it means they have too much debt and that is a warning to them.I think the episodes are old too as we are buying a house right now and there is no more 100% financing or 80-20 loans. With FHA, you HAVE to put down 3.5%; conventional mortgages, you have to put down 5%. There might be some VA loans where you don't but I don't think there are.

ButtonsPepper

We were going to put down 20%, and our mortgage guy said to put down 15% instead so we had more money saved in our account. Or was it we were going to put down 15% and he said 10%, either way, this was the guy giving us our mortgage, telling us not to put AS MUCH down. Now we have an extra cost because of the mortgage insurance.... but in that case, the advice was to put down less. We can afford our mortgage just fine. We got pre approved, and didn't do what they do. Ex pre approved for 500k, have 40k, so now you can get a house 540k. No, we took what we were pre approved for, figured out what we were comfortable buying a house for, then deducted our down payment from that.. (those numbers are crazy high, they weren't what we got pre approved for haha). The 20% really depends.... I don't know many people that put that much, banks would rather you have a good bit in your savings then put down that much if you lose a job/need to find a new one, something happens, etc.

Mrs.Simpson2010

Buttons- thats interesting that they told you to put down less. But isn't the point of putting down more to avoid the private mortgage insurance?

ButtonsPepper

Yes, but they felt more comfortable giving it to us with a lot more in savings due to FI's job. They wanted a ton in there "just in case" because his income isn't guaranteed.

jennyinyellow

A lot of the shows that I have watched have taken place in Canada.  

jewels2730

We didn't put 20% down and we can afford our mortgage just fine.  I would have loved to, but with closing costs being over $10k, wedding, and keeping a cushion, we just couldn't swing it.  This was all before the market crashed and loans got tougher and tougher, so we were lucky.We wanted to get in a house and start putting our money towards something instead of throwing it away in rent.  Plus we live in the city and our rent was so high, we could barely save anyway.