It used to be that anyone who could fog a mirror could get a mortgage. Is this still true in Houston? (Wells: renting)

[Zhang Fei]

On the one hand, credit standards are supposed to have tightened up. On the other, the home buyer's refundable tax credit and record low mortgage rates are making down payments and monthly mortgage payments much more affordable, especially in relatively low priced areas like Houston.

[Oildog]

NO. I moved on a corporate transfer, and I had to provide so much documentation it wasn't funny. It has gotten much stricter in the past two years.

[Txgal33]

That answer would be a resounding NO! Even those with good credit are not getting approved. We had excellent credit and it still took us 30 days to close and it was touch and go to the wire.

[astrohip]

Actually, you didn't have to fog the mirror. You state that you could fog the mirror if they asked you to. But they never asked . . .

And as you can see from the replies, we've now gone overboard in the opposite direction. Even buyers with solid credit are having to jump thru hoops.

[Zhang Fei]

Originally Posted by astrohip

And as you can see from the replies, we've now gone overboard in the opposite direction. Even buyers with solid credit are having to jump thru hoops.

That's interesting to know. Have we gone back to the credit standards of the 80's, though? That was when no income verification meant a 1/3 down payment (i.e. getting a mortgage on a $300K home would require a $100K down payment). Even with income verification, it was impossible to get a mortgage with anything less than a 20% down payment. And in those days, home prices were considerably cheaper relative to incomes meaning mortgage payments took a considerably smaller chunk of the paycheck, i.e. the loans were much less risky, simply on the basis of the ability of borrowers to make the monthly payment without resorting to a daily diet of peanut butter and jelly sandwiches.

[cheryjohns]

The overall answer is no. Things, however, have done a switcheroo as far as who is lending. I used to tell people with good credit to go straight to the big guys - Chase, BOA, Wells Fargo. The mortgage brokers used to tack on extra charges/fees and had higher interest rates - so people who could passed by the big boys were better off going straight to them. Not any more. The mortgage brokers are charging the same fees and interest rates now - and are sooooo much better to work with. Most of the mortgage brokers' loan officers show common sense and don't make people with good credit jump through so many hoops as the big ones. It seems as if BOA,Chase & WF have fired all of the people who had any brains and are know staffed by lower-paid morons that follow a strict set of rules that sometimes seem pointless. Haven't had a pleasant experience with any of the big names for about a year.

[cheryjohns]

Originally Posted by Zhang Fei

That's interesting to know. Have we gone back to the credit standards of the 80's, though? That was when no income verification meant a 1/3 down payment (i.e. getting a mortgage on a $300K home would require a $100K down payment). Even with income verification, it was impossible to get a mortgage with anything less than a 20% down payment. And in those days, home prices were considerably cheaper relative to incomes meaning mortgage payments took a considerably smaller chunk of the paycheck, i.e. the loans were much less risky, simply on the basis of the ability of borrowers to make the monthly payment without resorting to a daily diet of peanut butter and jelly sandwiches.

Lots of FHA loans, requiring 3.5% down. The no doc loans do seem a thing of the past. I believe it is about 30% if no job verification - I have only had one request - whatever they required, that person didn't have it - so I really don't remember.

[Zhang Fei]

Originally Posted by cheryjohns

The mortgage brokers are charging the same fees and interest rates now - and are sooooo much better to work with. Most of the mortgage brokers' loan officers show common sense and don't make people with good credit jump through so many hoops as the big ones.

So it's still easier to borrow money from the little guys (as opposed to the big guys like Chase and Citibank) ...

[hsw]

Real question for most seeking shelter anywhere is what makes most financial sense: renting vs buying...esp in a world with uncertain job security, poss need to move regions, lifestyle changes (divorce), etc...and dubious home price appreciation and frictions (realtor commissions, taxes, etc) of any sale

Suspect that, for most people, renting is smarter but most guys are financially illiterate/innumerate so can't analyze own situation