How much do you plan on putting down?
What zip code are you looking in?
FICO?
Standard single family detached home? Condo?
Income?
Revolving debt?

All if these factor plus more factor into best rate and what you will be approved for

Exp comes from 2 years as a loan originator and 1 year counting as an underwriter

afaik a Realtor will be reluctant to show you houses if you don't have a preapproval letter.

Talk to your lender about first time home buyer programs. There's a program out now called HFA(not CHFA FHA) that's pretty darn good.

May depend on where you are looking. We didn't bother getting pre-approval for a mortgage since we were looking well below the max amount we would be approved for and were planning on having at least 20% down. Never had problems with seeing houses. Our offer had a condition that we would get financing, but I think even with a pre-approval letter that's generally included.

there is a very good hidden point in jj's post.

when you get pre-approved, try to ignore the number you are approved for and rely on your original budgeting to determine how much house you can afford.

i have a feeling it is real common to want to spend $x amount on a house and then revise that figure up based on the amount you are pre-approved for.

I don't know what its like in the US right now, but in Canada the pre-approval amount you can get is almost always more than you should* be spending.

* Should - in the sense that it'll probably leave you quite house poor and in a not very good position financially. If that's something you're ok with, than by all means, go for it.

yeah, pre-approval amount is a joke. We were approved for $450k (which buys a ****load of house in Indy), but the most we we're willing to spend was $300k. Ended up buying around $250k, which was nice.

A lot of people's budgets for homes (and cars) is basically whatever the lender is willing to give them. I never understood that either. I mean there was a time when I didn't make that much money and 25%+ of my gross income had to go toward housing. But that's not where I wanted to be forever. If you're going to strain your monthly budget over a house because you just have to, at least do it with a 15-year mortgage.

Houses beyond a certain point are kind of bull**** anyway, everybody wants 42-inch cabinets and solid countertops in even mid-range places anymore.

A little while ago I saw my wife's grandparents' home when they passed away, and while tidy and fairly clean it wasn't updated in decades. Halls were narrow, very "closed concept," kitchen was small, only one bath, really all the things that people hate. But somehow they managed to survive in it for almost 50 years and liked it. (They were paying more in taxes than the total cost of the property when they bought it.)

Should really never ever be in a 30 year fixed. 15 year if it is your dream home, location, etc otherwise go with an ARM. Average homeowner REFIs or moves every 5 to 7 years anyway

So tough to talk buyers out of a 30 year because ZOMG it's a fixed rate and it is what my Dad had

Great advice wrt to pre approval amounts. Crunch the numbers, and stick with what you can afford comfortably. Do not go by the amount you're approved for. Massive mistake most ppl make.

This is really good advice if you know rates are going to stay low forever. Otherwise, not so much.

This is such terrible advice. With an ARM you risk marginal buyers being unable to continue to afford the mortgage if/when rates go up. There is something to be said regarding the security of knowing your mortgage payment forever.

Terrible advice is listening to your father. ARMs are capped and have certain spreads. If you must have the 'security' then go with a 15 year fixed

this is the level of discourse one expects from the mortgage industry. ARM herpa derp stop listening to your grandpa etc etc. Brilliant argument!


Tons of pros and cons for both ARMs and 15 or 30 yr fixed rate loans. Really depends on your individual situation (likely to move or not), risk tolerance, interest rate environment, and exact spreads and caps between the various offerings.

This is the home ownership thread, not some highly debatable BFI topic.

Canada does mortgages a little differently than the US (the term of the mortgage is generally 5 years and separate from the amortization period which might be 15-25 years) but we went with a longer amortization to keep our required payments low and then we just make regular additional lump sum payment to the principal.

The nice thing about this is that you get the 'security' of a lower required payment but still have the flexibility to pay off your mortgage faster. I can also regularly re-evaluate if I want to invest our extra money or apply it to the mortgage.

As long as you have a mortgage that lets you make additional payments (and you are active enough with your finances to actually make those payments when you think you should) I think longer term is always better.

Edit: Bah, I guess what KPowers said.

the flip-side to this argument, and it has merit, is to "buy as much house as you can afford right now" with the rational being that prices go up, your salary goes up, everything goes up.

that 25% of your salary today may only be 20% of your salary tomorrow.

as the dr. mentions, everyone situation is different and as a first time home buyer, you need as much info as possible to help make your individual decision that works best for your situation.

did a ton of shopping for a decent compressor this week. going to frame a new shed later this year (or early next), so tank size was a decent concern, but also want to ensure that the unit will handle a decent paint sprayer.

Paint sprayers require a high CFM rating to maintain an even, consistant flow

staying away from oil-free consumer end models. They are light, inexpensive, quiet....and less capable. But I also didn't want to spend $1k for a decent belt driven oil lubed compressor.

Best value on specs in the price point <$400 I've located is the Makita MAC5200 Big Bore 3.0 HP. It's a 5.2 gal., but states that it gets 6.5 CFM @ 90 PSI. Others in the price range seem to top out @ 5.0 CFM and most are no oil.

grabbed it on amazon for $350, free 2-day shipping (<3 prime), should be here today.

i got a 15 year at 2.75% and feel good about it

Longer term mortgages have higher interest rates.

Yea pretty much everyone here has to take just about 100% of what the bank tells them they can spend, especially as first time buyers. Sucks living somewhere where they aren't giving houses away, like in most of USA#1.

On the other hand, being a Realtor is pretty sweet!

When I bought my condo I was approved for an amount that I would 100% not have been able to afford. It actually upset me since this was about 5 years after the housing crash due to this exact practice.

The amount my wife and I got approved for (based on only my salary and about 10k savings) made me lol. We ended up buying at about 75% of what we were approved for, then my wife got a full time job, and I still feel a bit stretched. Luckily for me, Milwaukee's Best Ice is pretty cheap.

If you don't have enough to pay 20% upfront but more like 12-15%...let's say you buy the house but have enough saved up after 4 or 5 months to meet the 20%, do you now still pay PMI every month after paying off the remaining 5-8% to meet the 20% of down payment?

No pmi will be gone

I'd much rather have a 30 year apr or 15 year. I'm pre approved for a 30 year 4%, Imo rates are on the rise and will settle somewhere around 5-7%. I'm quite happy with 4%