Financing

Your lender decides what you can borrow but you decide what you can afford.

 

Lenders are careful, but they make qualification decisions based on averages and formulas. They won’t understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected – for all the new opportunities your home will give you to spend money, from furnishings, to landscaping, to repairs.

 

 Historically, banks use a ratio called 28/36 to decide how much borrowers could borrow. An approved housing payment couldn’t be more than 28 percent of the buyer’s gross monthly income, and his or her total debt load, including car payments, student loans, and credit card payments, couldn’t be more than 36 percent. (In Canada lenders apply similar formulas to determine how much a buyer can afford. The Gross Debt Service ratio, or GDS, is not to exceed 32 percent of the buyer’s gross monthly income, and the Total Debt Service ratio, or TDS, is not to exceed 40 percent of the buyer’s total debt load.) As home prices have risen, some lenders have responded by stretching these ratios to as high as 50 percent. No matter how expensive your market though, we urge you to think carefully before stretching your budget quite so much.

 

Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.

 

Tucson condo financing can be difficult at times so if you’re considering purchasing a condo you need to make sure you work with a lender who is up to date on the latest condominium financing guidelines.

 

Tucson Condo Lender Recommendations:

 

John Saavedra

Fairway Mortgage Corporation

(520) 749-3900 

 

Jason Rose

Nova Home Loans

(520) 750-8888

 

Did you know that if over 30% of the units in a condominium complex are rented it will be very difficult to get mortgage insurance?

 

So even if a Buyer has been approved their loan could be denied if the Tucson condominium association doesn’t meet the lenders guidelines.  Fannie Mae and Freddie Mac’s finance guidelines requires evaluation of the condominium association.  This association scrutiny is in addition to the evaluation of the borrower’s credit qualifications, which have become more in depth.  Situations that could cause a Tucson condominium association to be denied loan approval by a lender include:

 

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