Last night I called an old mentor of mine who currently works as a branch manager at a local bank. Girl Ninja and I wanted to get pre-approved for a mortgage for two reasons; a) to make sure we actually qualified for a loan, and b) to have a pre-approval notice on hand for when we find a place we love. Since I knew the branch manager personally we spent about 20 minutes on the phone going over The Ninja household’s financial and personal information. Thirty minutes later, I had a copy of the credit report he pulled in my inbox.
His email started…
You are approved, as you expected for much more than you wish to burden yourselves with…
To which I responded…
Thanks for doing this so quick. Curious what we are “qualified” to borrow? Should give me a good laugh and a heart attack all at the same time.
To which he responded…
You could actually put 15% down on a $500k purchase and be good with both your incomes…don’t go there.
Banks are dumb, but at least this branch manager knows it. They basically gave Girl Ninja and I approval to ruin our lives and stress ourselves out. I couldn’t even imagine having a $500,000 mortgage. There would be absolutely no financial cushion in the event one of us lost our jobs or had to take a pay cut. It’s craziness I tell you, craziness.
But I guess it can’t really be that crazy right? I mean, banks wouldn’t offer these loans if they thought the borrower would default at the approved amount. I guess this just goes to show WAAAAAY too many people are trying to keep up with the Joneses.
Girl Ninja and I are determined to keep our purchase price below $400,000 and hopefully closer to the $300,000 to $350,000 range. This should leave us with a mortgage payment that we don’t have to think about with our dual incomes, and even when the day come that Girl Ninja becomes Stay At Home Mom Ninja, I can still make the payments without much sacrifice. It’s not about the price of the home people, it’s about your monthly payment. Decide what you want to spend ALL IN on housing each month, and then let the numbers tell you how much you can afford.
Wanna know what’s more annoying than the banks approving to loan us more money than they should? You ready for this? It’s probably the most annoying thing I’ve ever come across in my entire life. EVER!!!!
Girl Ninja’s credit score is 40 points higher than mine!
FORTY FREAKING POINTS! How about that for a little piece of humble pie. Haha, I mean I can’t really be mad, my score isn’t terrible at 750, but she’s rocking a 790. Girl Ninja must be flirting with the people at FICO because she has not borrowed as much money as I have, paid back as much as I have, or had as long of a credit history. I thought for sure she’d be the “weaker” link in this scenario, but that doesn’t seem to be the case.
Now that we are approved I guess it’s time to get out there and start walking through homes. We start bright and early Saturday morning. Who knows, maybe by Monday’s post we will have put an offer on the place
p.s. Did you know Seattle real estate is crazy right now. Inventory is as low as it’s ever been (1.67 months). Prices are up significantly over the last 18 months. And multiple offers are a common thing. Of course this all happens when we decide to jump in. Bummer.