Why getting a mortgage is such a PAIN
So its time to buy a home. This may be our first home, 2nd home or 3rd home. Whichever home you are on, you know that when trying to get a mortgage, it seems to always be difficult. It always seems like their is endless amount of paperwork & even after you get that paperwork to them, they always need more. It is sort of like a never ending cycle. So what's the reason behind this, why is it so difficult to get a mortgage.
Why is it so hard to get a mortgage in Syracuse NY?
Bank Regulations - Ever since 09' and the horrible housing crisis, the government has placed several restrictions or regulations on these banks to prevent another housing crisis from happening again. For example to be considered as a good mortgage, a loan can not exceed a total debt to income ratio of 43%. Before the collapse, soon to be homeowners were getting mortgages at around 65% +. With the amount of student loan debt that many first time homeowners have accrued, the chances for these young adults to get mortgages are very slim. This is part of the reason why many of them are renting even though they may want their own homes.
People didn't pay their mortgages - As we all know that when the crisis hit, their were several thousands of homeowners that had to go through foreclosure. The obvious reason behind this is that these homeowner didn't pay their mortgage. Now these banks are afraid to get burned. They do not want to take on the liability of these peoples homes and do not want to have to foreclose on any more homes. So if all of these borrowers would have just paid their mortgage like they promised they would, when they signed their contract, the housing crisis probably would have never happened and getting a mortgage would be much easier.
More money down, better chance - Now a day homeowners want to put down 10 % or less to purchase their home. The issue with that is that it is putting these lenders at risk. If you happen to lose your job or take an income reduction you may not be able to pay your mortgage and these lenders will be back at square 1 with a house that they don't want. In reality, if you don't have 20% to put down on your home, you really have no business buying a home.
Lenders don't need the risk
Banks are obviously becoming more tight. The loan officers are becoming more tight. They don;t want to be liable for issuing bad loans. This could cost them their jobs. They are taking every precaution necessary to not hold the fault of a bad issue. In reality, why would they take the risk to issue you a loan if they are not positive that you will be able to pay and hold up your end? They really only want to issue loans to people who do not need them. People who have liquid assets and high incomes but just didn't want to pay cash so they can diversify their investments.
The day of the lender taking a risk is over.
So if you are planning on trying to buy a home that you cant afford, most likely you will not be approved and that home that you want, will not be yours.
The best recommendation we can give you is to shop your mortgage. This article explains some necessary steps you should take in order to begin this process.
HS Property Funds
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