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Mortgage question

hopkins_student

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Apparently despite the current credit situation banks are still offering very attractive mortgages to medical residents. Would anyone care to speculate on what the borrowing limits might be for a married couple with a combined income of $100,000? Thanks for your input.
 

Piobaire

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Originally Posted by hopkins_student
Apparently despite the current credit situation banks are still offering very attractive mortgages to medical residents. Would anyone care to speculate on what the borrowing limits might be for a married couple with a combined income of $100,000? Thanks for your input.

You can pretty much figure that your total combined monthly payments should not exceed 36% of your gross income. As some sanity seems to have returned to underwriting, you should probably figure this will once again be the standard. Also, money down, to increase your LTV (loan to value) ratio, will help.
 

thekunk07

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IMO, docs always have an easy time because of potential future earnings. what kind of down payment do you have?
 

thekunk07

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used to be 4:1 in many cases. 100k earner, 400k house was the norm. i dunno now.
 

Piobaire

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Originally Posted by thekunk07
used to be 4:1 in many cases. 100k earner, 400k house was the norm. i dunno now.

Underwriters are much more concerned about the total payments/debt burden to income ratio, to my knowledge. I mean, if you have 200k to put down, and make 100k, that obviously adds to how expensive a house you can afford, and positively affects the LTV ratio.
 

thekunk07

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understood, just seems to be the rough ratio from people I knew who've bought imn the last 4-6 years.

make 200, buy 6-800k worth of house, etc.
 

oceans11

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I underwrote mortgage loans for years prior to underwriting group medical insurance & if you want to determine what an u/w will look at as far as up front affordability qualifications it will be front end debt ratio (house, haz ins, HOA dues, MI, taxes) then the backend debt ratio's that include all your secured & unsecured debt, student loans etc etc. This will be based off your gross income. From what I remember (it's been over 2yrs now) FNMA/FHLMC use 36-38% front & 41%- 42% back end.

You may be able to afford the home itself with a good front end ratio (housing payment only) but what screws a lot of recent college grads are those hefty student loans even though a lot are deferred & some are based off 1% of the balance.

If you're a FTB (1st time buyer) your LO may suggest going FHA due to the lower down requirements & higher debt ratio allowances.

Hope this helps.
 

hopkins_student

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Originally Posted by thekunk07
what kind of down payment do you have?
Zero. All of the information I've found with regard to these medical residents emphasizes the availability of no money down borrowing. But, my parents may surprise us with a rather large graduation gift, so this could change.

Regards, HS.
 

johnapril

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From experience, I would figure the cost of owning a home differently than simply looking at the percentage of my income going toward a monthly payment. Figure in maintenance, renovations, and furnishings. What I am suggesting is, if you buy "as much house as you can," you may not be able to afford to do much with it.
 

Dakota rube

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Originally Posted by oceans11
...36-38% front & 41%- 42% back end...
These are pretty standard numbers today. No more than 36% of your monthly gross income for your total house payment (PITI); and no more than 42% (I've seem recent approvals at 45, 46%) of income to total monthly debt service. The underwriters will approve you for whichever ratio results in the lowest mortgage amount.

As a newly-graduated resident you'll be taken by the hand at and led straight into your new "private banker" who will unveil the whole gamut of cool financing tools available to you. They'll likely not require you to make any down payment. You'll get the red carpet treatment. Wells Fargo is particularly good at this.
 

oceans11

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Originally Posted by johnapril
From experience, I would figure the cost of owning a home differently than simply looking at the percentage of my income going toward a monthly payment. Figure in maintenance, renovations, and furnishings. What I am suggesting is, if you buy "as much house as you can," you may not be able to afford to do much with it.


Absolutley! Very good point! It's like my dad used to say before buying a car when I was younger.

He would say, "Okay sure you can afford the payment but what about Insurance, Gas, Registration, upkeep?"
 

chorse123

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Originally Posted by oceans11
Absolutley! Very good point! It's like my dad used to say before buying a car when I was younger.

He would say, "Okay sure you can afford the payment but what about Insurance, Gas, Registration, upkeep?"


I have a friend in his intern year, and it sounds like he has zero time to do home maintenance. So even basic things, you might need to hire someone to take care of. Worth keeping in mind.
 

oceans11

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Originally Posted by thekunk07
IMO, docs always have an easy time because of potential future earnings. what kind of down payment do you have?

Just an FYI: U/W rarely (I won't say never) look at anything "future" potential related when it comes to income in fact we're more likely to see the probabilities of your income either stagnating or decreasing.

Unfortunately most of the "professionals" that came across my desk when I underwrote their loan requests had terrible credit. Doctors & Lawyers were among the worst. Why? Mainly due to establishing their practice & having a lot of "outgo" but not a lot of income at first. And of once again those huge student loan payments. Debt ratio's even for those with mid 6 figure incomes were poor to say the least & credit scores were routinely in the low 600's.
 

Orsini

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I would wait. Housing is going to go down some more.
 

thekunk07

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^yes. my latext tax/property assesment says in 10/11, my house will be wiorth less than i paid.
 

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