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How much will banks be looking for salary-wise to afford a 200k home loan?

post #1 of 51
11/18/08 at 9:24pm
Thread Starter 
Just curious. i'm sort of thinking a year or two ahead, but I'm probably not going to have much to put down, and my credit is on the low side of mediocre. is there any hope? I want to capitalize on low prices, but realize i'm fighting skittish lenders too. what say ye?
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post #2 of 51
11/18/08 at 9:25pm
I think it would depend on how much money you are able to put into a down payment.
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post #3 of 51
11/18/08 at 9:29pm
Nobody has a crystal ball to know what lending standards will be in a couple years. But if your credit is not good and your assets/net worth are not great either, I wouldn't be surprised to see lenders ask for 20-40% equity in order to get the deal done. In terms of salary, I'd say 60-70k or so for a 200k loan.

All wild guesses
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post #4 of 51
11/18/08 at 9:35pm
Poor credit and not much for a down payment may result in them not wanting to write a loan..
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post #5 of 51
11/18/08 at 10:21pm
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Quote:
Originally Posted by gdl203 View Post
Nobody has a crystal ball to know what lending standards will be in a couple years. But if your credit is not good and your assets/net worth are not great either, I wouldn't be surprised to see lenders ask for 20-40% equity in order to get the deal done. In terms of salary, I'd say 60-70k or so for a 200k loan.

All wild guesses

i'm probably retarded, how exactly does equity work in this case? The concept is a little confusing to me. In this case does this mean I'd need a 20-40% downpayment, or would it mean that I'd have to put up that percentage as well as a downpayment?

In the meanwhile, I'll work on tripling my income in the next two years.

Unfortunately, looks like i'm going to have a long period of rental ahead of me.
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post #6 of 51
11/18/08 at 10:33pm
Yes, by equity I meant down payment. If you have enough assets, a good credit score and good income, down payment could be a lot less than that.
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post #7 of 51
11/18/08 at 11:00pm
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Quote:
Originally Posted by gdl203 View Post
Yes, by equity I meant down payment. If you have enough assets, a good credit score and good income, down payment could be a lot less than that.

I was afraid of that. Thanks for killing my dreams buddy.
Time to start practicing my field goals. Maybe i can make NFL league minimum somewhere so that I can afford to get myself a one bedroom condo in Seattle.
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post #8 of 51
11/18/08 at 11:21pm
Quote:
Originally Posted by Tokyo Slim View Post
Maybe i can make NFL league minimum somewhere so that I can afford to get myself a one bedroom condo in Seattle.
You'll probably need to work on your class status too then. Have you seen some of the socialite community bullshit that several of the condo projects are pushing? *cough* escala *cough*
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post #9 of 51
11/18/08 at 11:33pm
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Quote:
Originally Posted by robin View Post
You'll probably need to work on your class status too then. Have you seen some of the socialite community bullshit that several of the condo projects are pushing? *cough* escala *cough*

I wasn't really looking for anything fancy. I'm smarter than to buy into anyplace that pushes a "lifestyle". I'm a PC, remember?
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post #10 of 51
11/18/08 at 11:33pm
You can play with the numbers for fine tuning, but here's the basics:

20% down = 40k

So float 160k. Not including property taxes, condo fees, insurances, etc., at 6.5%, over 30 years, you're looking at roughly 1k per month. So add in the other stuff, and you're probably in the area of 1.3-1.6k. Then banks have income/debt ratios they like, which just for ballparking, we can use 1/3. So three times 1.3-1.6k in gross monthly income. So low end, looking at 3.9k gross, per month, or roughly 47k per year.

That is figured off you have exactly $0.00 other debt. Income needs to go up as debt increases, to keep ratios in line. Again, just all ball park put together in two minutes for you.
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post #11 of 51
11/18/08 at 11:36pm
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Quote:
Originally Posted by Piobaire View Post
You can play with the numbers for fine tuning, but here's the basics: 20% down = 40k So float 160k. Not including property taxes, condo fees, insurances, etc., at 6.5%, over 30 years, you're looking at roughly 1k per month. So add in the other stuff, and you're probably in the area of 1.3-1.6k. Then banks have income/debt ratios they like, which just for ballparking, we can use 1/3. So three times 1.3-1.6k in gross monthly income. So low end, looking at 3.9k gross, per month, or roughly 47k per year. That is figured off you have exactly $0.00 other debt. Income needs to go up as debt increases, to keep ratios in line. Again, just all ball park put together in two minutes for you.
Sweet... so maybe I only need to double my income! + save $40k somehow. Crap. Perhaps I'll take a second job and start putting all the money into savings. Assuming I have the willpower. That sort of terrifies me though.
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post #12 of 51
11/18/08 at 11:39pm
Quote:
Originally Posted by Tokyo Slim View Post
Sweet... so maybe I only need to double my income! + save $40k somehow.


Crap.

Perhaps I'll take a second job and start putting all the money into savings. Assuming I have the willpower. That sort of terrifies me though.

Maybe you can get a union job.
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post #13 of 51
11/18/08 at 11:48pm
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Quote:
Originally Posted by GQgeek View Post
Maybe you can get a union job.
Or maybe start kissing up to my older relatives/win the lottery/start selling crack
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post #14 of 51
11/18/08 at 11:49pm
Quote:
Originally Posted by Tokyo Slim View Post
Or maybe start kissing up to my older relatives.

Or a nicely comfortable older woman?
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post #15 of 51
11/18/08 at 11:53pm
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Quote:
Originally Posted by Piobaire View Post
Or a nicely comfortable older woman?

Unfortunately, this scenario may have already passed me by. Damn my conscience!
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