First time home buyer takes a blow to the gut!

[Jhass]

Well I have since realized today that this money hungry society is increasingly growing more retarded.

Hey folks! I'm a 21 year old guy who... as the title states.. Is trying to buy my first house. It has been quite the exciting journey so far the last few weeks starting with the pre-approval being successful to having an offer accepted! Hurrayyy right? But now it's got down to the serious business... dealing with them banks. I have already let the family and friends know about the great news and we have already celebrated in my success. Until my mortgage broker called me today and shared the terrible news. First off, I offered well below my full assessed sum so really I figured this would easily be possible. Unfortunately everything had changed since my pre-approval was done. Originally we agreed that a 5% down payment on top of paying out my insurance premium was already possible and she had guaranteed me a rate at 3%. Sounds fantastic to me I could easily go with that. Then since today she started throwing numbers at me telling me she needed 15% down payment to get a 7% rate. Wait what? Talk about a blow to the gut i'd say... That is absolutely retarded. Like what happened? So now hear I sit with a house I have already put an offer on and has been accepted to a celebration with my family that was so proud of me a short few days ago. To drinking my sorrows away while writing this. How depressing, what a waste of time.

So for some general info. I bought the house for 320k and she requested I put 43k as down payment which brings my monthly mortgage payment to $1700 a month. Wow... seems pretty steep to me. What about the guys who buy homes for 750k do they pay $3000/month after 20% down? Something ain't clicking here.

Anyways I'm writing this to ask for help from the community here on what I should do in this situation. I feel terrible right now. If anyone has any info for me that can lead me in the right direction I would soo very much appreciate your help. I set my heart on this place and I wont give up.

Thanks

[Big Daddy Badger]

Welcome to the real world... the more you have... the better the deal they will offer you.

Sort of how sociaety works in general... if you have money... you get more free stuff.

Otherwise consider yourself lucky... maybe.... 5% down is or was on the block because too many folks are over-extended.

It used to be a 10% down minimum nand it could go back to that and hell you are 21 and buying a home.
Do you know how rare that is?

Takes most folks a lot longer than that to save up even 5%.

That said... I do feel your pain... banks can be a pita.

[TIMWOLF]

Absolutely the first thing you should do is tell your mortgage broker to give you the original deal or you will be going elsewhere as they already preapproved you for the lower rate. The initial offer she gave you for the 3% most likely had a period of time that it was valid for...did you get any sort of preapproval contract that says this????

If you get no immediate action from her start calling other banks as 7% is absolutely ridiculous for a rate even with the shadiest lenders. If you have a decent credit rating and a decent down payment you will not have an issue.

I hope you put a condition on your purchase offer on the home to make it contingent upon finanacing going through.

[Jhass]

Originally Posted by pesky672

Welcome to the real world... the more you have... the better the deal they will offer you.

Sort of how sociaety works in general... if you have money... you get more free stuff.

Otherwise consider yourself lucky... maybe.... 5% down is or was on the block because too many folks are over-extended.

It used to be a 10% down minimum nand it could go back to that and hell you are 21 and buying a home.
Do you know how rare that is?

Takes most folks a lot longer than that to save up even 5%.

That said... I do feel your pain... banks can be a pita.

Yes I know but a 5% was already agreed in the beginning and approved for. I have enough for a 20% down payment right now but she mentioned today... even if I out 15% of that down now my interest rate will not change and still be 7% which leads me to $1700/month which originally was supposed to be 5% down at 3%. What a turn around. I guess everything changed in the fact that it tripled in a single month eh. Also yes not many my age can afford a first house. But I'm not the average young-adult who blows all their money at the bars and retarded 12" lift kits on their truck when they only bomb around the city. I'm far more mature and well mannered.

Thanks for looking and your input.

[Mutter87]

To much greed out there man. I find it comforting thinking about how at the end of the road, they are not going to like what happens to them. 5-10% is reasonable. They should take the total money paid in a 20 year mortgage for your 320k home and make it so that it takes 30 years to pay. So you'd have a 30 year mortgage but pay the same ammount as a 20 year mortgage.

[pikergolf]

Might not be popular, but I would suggest if you can't afford payments at 7% you can't afford the house. Interest rate can swing to 7% pretty easy. Maybe save for a bigger DP or go for a cheaper house. Your guaranteed rate is only good for a few years.

[Clgy_Dave2.0]

Welcome to this thing called "Life". I fail to see how it's a "money hungry society is increasingly growing more retarded". Who exactly is the "money hungry" party?
What...You don't understand why a bank wants to make sure it's got enough equity in it's loan so that they don't lose money if say, a first-time buying, 21 year old were to lose his job and default on his loan?

You're 21 and you're frustrated you can't buy a $320,000 home?? Wow.

Maybe try and start at an entry level home...or a condo, or apt suite. Get you're payments to something a little more reasonable.

[omega50]

Originally Posted by Jhass

Yes I know but a 5% was already agreed in the beginning and approved for. I have enough for a 20% down payment right now but she mentioned today... even if I out 15% of that down now my interest rate will not change and still be 7% which leads me to $1700/month which originally was supposed to be 5% down at 3%. What a turn around. I guess everything changed in the fact that it tripled in a single month eh. Also yes not many my age can afford a first house. But I'm not the average young-adult who blows all their money at the bars and retarded 12" lift kits on their truck when they only bomb around the city. I'm far more mature and well mannered.

Thanks for looking and your input.

Typically-A pre-approved mortgage would have protected the agreed upon terms for a period of 30-90 days. If you have gone past those dates then you are out of luck.

[Jhass]

Originally Posted by TIMWOLF

Absolutely the first thing you should do is tell your mortgage broker to give you the original deal or you will be going elsewhere as they already preapproved you for the lower rate. The initial offer she gave you for the 3% most likely had a period of time that it was valid for...did you get any sort of preapproval contract that says this????

If you get no immediate action from her start calling other banks as 7% is absolutely ridiculous for a rate even with the shadiest lenders. If you have a decent credit rating and a decent down payment you will not have an issue.

I hope you put a condition on your purchase offer on the home to make it contingent upon finanacing going through.

Yea thinking I should seek out another broker or perhaps do it myself as she clearly wasted my time. She failed to mention that the initial rate would not change and no contract saying so was put into place. My credit is excellent and she had told me that. I do have the full 20% down so I really do not see the issue hear as to getting I better lender from whom she directed me. And yes a large deposit was put into place upon acceptance.

[Mutter87]

Originally Posted by Calgary Dave

Welcome to this thing called "Life". I fail to see how it's a "money hungry society is increasingly growing more retarded". Who exactly is the "money hungry" party?
What...You don't understand why a bank wants to make sure it's got enough equity in it's loan so that they don't lose money if say, a first-time buying, 21 year old were to lose his job and default on his loan?

You're 21 and you're frustrated you can't buy a $320,000 home?? Wow.

Maybe try and start at an entry level home...or a condo, or apt suite. Get you're payments to something a little more reasonable.

Entry level home? The average House price in Calgary is 100k more then the house he is buying. How much lower can you go without getting into crappy neighbourhoods?

All the new starter home areas are selling for high 200's - low to mid 300's.

Its ridiculous.

[Big Daddy Badger]

Originally Posted by Jhass

Yes I know but a 5% was already agreed in the beginning and approved for. I have enough for a 20% down payment right now but she mentioned today... even if I out 15% of that down now my interest rate will not change and still be 7% which leads me to $1700/month which originally was supposed to be 5% down at 3%. What a turn around. I guess everything changed in the fact that it tripled in a single month eh. Also yes not many my age can afford a first house. But I'm not the average young-adult who blows all their money at the bars and retarded 12" lift kits on their truck when they only bomb around the city. I'm far more mature and well mannered.

Thanks for looking and your input.

Money talks... take it for a walk like Timwolf said.

You can get a better deal than that... especially if you have enough for 20% down.

Which begs the question... why limit yourself at 5%?

No need to answer that... its YOUR business but over time... that willl probably cost you more than the 15 grand you are holding back even if that collects interest.

When we bought we put as much down as we could... then we made extra payments... what might have been a 25 year mortage is almost paid off and will be history just shy of 15 years since we signed.

Just a thought.

The best use of cash right now is to buy down debt.... if all those economists on TV know anything.

[Jhass]

Originally Posted by pikergolf

Might not be popular, but I would suggest if you can't afford payments at 7% you can't afford the house. Interest rate can swing to 7% pretty easy. Maybe save for a bigger DP or go for a cheaper house. Your guaranteed rate is only good for a few years.

As I said I already have the 20% down and more so that is no issue. Also I still could afford the house at 7% but I'm not even going to consider paying that much if i can do better. My pre-approval was done 3 weeks ago... find it hard to believe the rate changes from 3-7% since then.

[Jhass]

Originally Posted by Calgary Dave

Welcome to this thing called "Life". I fail to see how it's a "money hungry society is increasingly growing more retarded". Who exactly is the "money hungry" party?
What...You don't understand why a bank wants to make sure it's got enough equity in it's loan so that they don't lose money if say, a first-time buying, 21 year old were to lose his job and default on his loan?

You're 21 and you're frustrated you can't buy a $320,000 home?? Wow.

Maybe try and start at an entry level home...or a condo, or apt suite. Get you're payments to something a little more reasonable.

I make 120k/year hows that for a 21 year old. Nice input... low blow there buddy. You dont even know me. I hate the fact that guys think just people I'm still young that nothings possible. Thanks for looking anyways.

[guage]

Get a different mortgage broker, if you are able to put the 20% down you should get a great rate - fixed rate mortgages are at a big time low. If you want the mortgage broker I used PM, they should be busting their a..e to get you a deal.

[Clgy_Dave2.0]

Originally Posted by Mutter87

Entry level home? The average House price in Calgary is 100k more then the house he is buying. How much lower can you go without getting into crappy neighbourhoods?

All the new starter home areas are selling for high 200's - low to mid 300's.

Its ridiculous.

The OP is in Red Deer. There are TONS of houses that are decent in the low 200's. That's $100,000 LESS of a mortgage!!!
Most first time buyers start off with something even smaller...condo/apt..and there are many of nice, decent units for under $200,000.

[Clgy_Dave2.0]

Originally Posted by Jhass

I make 120k/year hows that for a 21 year old. Nice input... low blow there buddy. You dont even know me. I hate the fact that guys think just people I'm still young that nothings possible. Thanks for looking anyways.

No....you don't feel entitled at all.

[Jhass]

Originally Posted by pesky672

Money talks... take it for a walk like Timwolf said.

You can get a better deal than that... especially if you have enough for 20% down.

Which begs the question... why limit yourself at 5%?

No need to answer that... its YOUR business but over time... that willl probably cost you more than the 15 grand you are holding back even if that collects interest.

When we bought we put as much down as we could... then we made extra payments... what might have been a 25 year mortage is almost paid off and will be history just shy of 15 years since we signed.


Just a thought.

The best use of cash right now is to buy down debt.... if all those economists on TV know anything.

I won't give up, I wanted the 5% because since it's my first home I will need to completely furnish it and such. The extra cash comes in handy in that case. thanks man.

[Jamie]

Did you make your offer subject to financing?
Your realtor should have.

You need solid advice right now.
Get in touch.

Jamie

[Dacotensis]

Pesky is right young fella.
Pay it off quickly, why drag it out longer?
On another note, it's never too late to jump.
If you were getting married and you knew it was wrong, say 15 days before the day and all the parties had happend, anouncements sent out etc.
Would you get married just to save face with the crowd?
You'd be in for a world of hurt 2-3 or 4 years later, if you made it that long.
Is there anything forcing you to buy the house?

[Jhass]

Originally Posted by Calgary Dave

The OP is in Red Deer. There are TONS of houses that are decent in the low 200's. That's $100,000 LESS of a mortgage!!!
Most first time buyers start off with something even smaller...condo/apt..and there are many of nice, decent units for under $200,000.

This is an acreage i bought not a town house. It has 80 acres of land with a 2100 sq ft house, shop and garage. not hard to see the value there.

[Jhass]

Originally Posted by omega50

Typically-A pre-approved mortgage would have protected the agreed upon terms for a period of 30-90 days. If you have gone past those dates then you are out of luck.

It's only been 3 weeks so if you're right then my mortgage broker is lying to me perhaps?

[brettk.]

Jhass, the problem starts at the fact that people beleive a pre-approval means something. It doesn't. It is simply a guide line for what could be and acts as a rate hold. When you said things got serious when you made an offer, your right, it did. Now the lenders that your broker is dealing with are doing credit checks. At 21, your credit is probably very low, no crack at you, it takes time to build. You also have 0 net worth. Again not another crack at you, simple fact of life at 21. I could go on for awhile but the fact of the matter is this is reality and another broker nevermind a Bank may not be able to do any better. The one great thing about a broker is your best intrest is also theirs. You get a mortgage they get paid, you don't they don't. I highly doubt she is trying to screw you, the lenders make the ultimate desicion. The amount of money you have or are earning are not the most important things in getting a loan for a home. There is a reason most 21 year olds don't have a mortgage. But I do hope something works out for you.

[Divert]

I say tell your current broker to take a hike....albertaequity.ca is advertising 2.99% on a 5yr fixed right now, and you will be able to take advantage of the CMHC insurance and go with the 5% down.

I for one will say good for you, young age and setting your sights high. Obviously your working hard for what you want.

[TIMWOLF]

Royal Bank right now has a promotial rate for 3.990% fixed rate for 10 years.

As far as people telling you that being 21 and not being able to afford a 320K home it is complete bull. I bought my first house at 19, and then my rental property at 24 years of age. Nobody can fault a guy for having some drive in life and getting themselves into a position to make good money and invest into real estate.

[Jhass]

Originally Posted by Dacotensis

Pesky is right young fella.
Pay it off quickly, why drag it out longer?
On another note, it's never too late to jump.
If you were getting married and you knew it was wrong, say 15 days before the day and all the parties had happend, anouncements sent out etc.
Would you get married just to save face with the crowd?
You'd be in for a world of hurt 2-3 or 4 years later, if you made it that long.
Is there anything forcing you to buy the house?

Nothing is forcing me it's just a dedication of mine. I strive to achieve my goals. I figured just like that small % who own their own business rather than being a peasant... why not be that small % who buys a house at my age.

[omega50]

Originally Posted by Jhass

It's only been 3 weeks so if you're right then my mortgage broker is lying to me perhaps?

I think it is worth a look at your pre-approval first before you consider other options.

Beginning to sound to me as though you may have been pre-qualified and maybe not pre-approved.!

Perhaps you ferreted out a smokin deal on an acreage that the broker wants to capitalize on if for some unknown reason you are unable to get financing at a favorable rate

[Dwils]

Originally Posted by pikergolf

Might not be popular, but I would suggest if you can't afford payments at 7% you can't afford the house. Interest rate can swing to 7% pretty easy. Maybe save for a bigger DP or go for a cheaper house. Your guaranteed rate is only good for a few years.

Not sure that affording the mortgage at 7% was the issue? When you can easily get a mortgage right now for 3% give or take a half a point why on earth should he expect to pay over double that?

To the OP if you have enough money for 20% down payment and your credit is good there is no reason that you can't find a different mortgage broker and get this deal done.

[brettk.]

Originally Posted by Jhass

This is an acreage i bought not a town house. It has 80 acres of land with a 2100 sq ft house, shop and garage. not hard to see the value there.

Trying to catch up here, another problem with large acreage is the fact that banks and lenders will typically only value the buildings plus 5 acres and nothing more. Can complicate acreages.

[Kanonfodder]

Talk to jamie !

[Jhass]

Originally Posted by brettk.

Jhass, the problem starts at the fact that people beleive a pre-approval means something. It doesn't. It is simply a guide line for what could be and acts as a rate hold. When you said things got serious when you made an offer, your right, it did. Now the lenders that your broker is dealing with are doing credit checks. At 21, your credit is probably very low, no crack at you, it takes time to build. You also have 0 net worth. Again not another crack at you, simple fact of life at 21. I could go on for awhile but the fact of the matter is this is reality and another broker nevermind a Bank may not be able to do any better. The one great thing about a broker is your best intrest is also theirs. You get a mortgage they get paid, you don't they don't. I highly doubt she is trying to screw you, the lenders make the ultimate desicion. The amount of money you have or are earning are not the most important things in getting a loan for a home. There is a reason most 21 year olds don't have a mortgage. But I do hope something works out for you.

So basically your stating again since i'm only 21 that the banks find me somewhat not mature enough to lend to? Credit checks were done and came back excellent. I bought my first truck brand new paid out in full when i was 18. Do banks not notice these things?