hungryhorace

Any recommendations for how to approach a mortgage here in America, specifically MA? I hopefully should have LPR status at the end of this week, so want to get the ball rolling with purchasing a property.

It's been suggested I look to local banks / credit unions first, rather than the big 4. What's an appropriate multiplier against income to expect? In the UK it was around the 3-5x income when I last looked.

Will me only being here for less than a year hinder our ability to get a mortgage? My credit score with Experian is 690 and 728 with Transunion. My wife's score is 750+.

Thanks!

Mallory

Daughter used Capital-One 360 - used to be ING Direct. Very pleased with service.

sir_eccles

Best to talk to someone direct rather than going through websites. If you can get a personal recommendation. You will need that personal connection to make sure things progress properly through closure.

Lots of the banks will give you discounts on their fees if you bank with them as well. I switched to USBank when they did our mortgage though I was looking to switch anyway.

Depends on the lender but anything over 740 is usually good enough to give the best rates.

They don't usually do multiples, more affordability. You should have a number in your head that you are already happy to budget for as a payment. Do not just accept them saying "well you're approved for $500k" if that payment is twice what you can budget.

Have a contact with an insurer as well so you can just slot that info in when it's needed.

Don't forget to factor in other costs like property taxes etc.

hungryhorace

Many thanks both.

Yes, am aware property taxes could be quite high depending on where we live. Never thought i'd say it, but I almost miss council tax!

Hopefully my LPR is approved and I can start the ball rolling

Pulaski

I don't know of any reason to avoid "the big four". My last mortgage was with Wells Fargo, and they were very professional and accommodating, helping us with a slightly unusual scenario. The loan closed on schedule, and was a COMPLETELY paperless process (until the property conveyance meeting at the lawyer's office), with various documents, reports, and schedules emailed back and forth. The only thing I am not certain about is whether Wells Fargo offers mortgages in MA, if they do, I would recommend them without reservation. .... And Wells Fargo is currently closing more than one third of all mortgages in the US, so they must be doing something right.

hungryhorace

Haven't seen one WF in MA since I moved here unfortunately. Seems to be BoA is dominant.

Pulaski

I am fairly certain that WF has no branches in MA, but I checked online and they do appear to offer mortgages in MA.

hungryhorace

Thanks Mr P!

Steerpike

I would recommend a mortgage broker; they don't cost you anything and operate very much like a 'retailer' to the bank's 'wholesale' loan departments. A good one stays abreast of the ever-changing situations in the market, which change daily. Banks prefer to deal with (good) brokers since they 'know the business'. Some loan sources ONLY work with brokers since they don't have the resources to deal with public directly. This has changed somewhat with the onset of online activities, but a good broker can still find you things you wouldn't otherwise have access to.

'debt ratio' used to be a key guide to what you could borrow; total PITI (Principal, Interest, Property Tax, Insurance) commitment divided by gross income should meet some threshold. A second measure was 'DTI' - debt to income' - and was essentially your PITI commitment plus any other consumer debt such as car loans, etc. The classic measures were around 30% and 45% in the past. This article suggests 29%/41% for certain types of government approved loans. However, in expensive areas, these ratios are often difficult to meet due to high cost of housing. I believe my PITI alone was in the 40+% range when I bought my first condo in SF. Looking back, I was taking a huge risk but things played out ok and I got 'on the ladder'.

Ultimately, you should make sure you are comfortable regardless of what the lenders say. In the 'old days', the lenders were conservative and would typically loan you less than you felt you could afford; then they went nuts and loaned anyone as much as they asked for ... leading to the collapse in 2007-8 timeframe. Nowadays, I suspect they are back to being cautious so I would GUESS that you won't be able to borrow more than you afford.

Pulaski

I don't believe that is still true, or at least not as true as it was. Most of the banks have stopped dealing with brokers, because brokers sourced a lot of the cräppy, and in some cases worthless, mortgages, including a lot of the Alt-A (doc-less) mortgages, and those that caused huge embarrassment because "minority" borrowers were directed into higher interest (higher commission ) loans, then palming them off on the banks, which were implicated in the situation when they blew up, leading to substantial compensation payment by the banks for loans made by brokers. I don't know how many brokers remain, or who is financing them, but it isn't the mainstream banks.

Noorah101

I refinanced my condo with Wells Fargo about 5 years ago, and am very happy with their mortgage service.

Rene

notonuksoil

We got our first US mortgage in NY August last year and used a broker. We got our pre approval letter from him then it was a case of finding the right house. He was excellent and called us up 3 or 4 times a week some weeks with various options until we were happy to lock into a mortgage that fitted what we wanted. He also advised us on the whole home buying process and how to deal with realtors.

Uncle_Bob

What's an appropriate multiplier against income to expect? In the UK it was around the 3-5x income when I last looked.

Not sure but bear in mind you will need to put over 20% down to avoid paying any PMI.

hungryhorace

Good info - appreciated. Do you know if any of the first time buyer deals offset this at all?

I've already arranged a call with Wells Fargo to discuss my potential options, so I can start to get a feel for what they would lend us and what would be right for us.

Uncle_Bob

I'm not sure this was over 15 years ago and things have changed alot recently.
I expect its still cast in stone.

I got my mortgage through a agent who was known to immigrant workers in my company. He was prepared to submit applications putting us down as american citizens when we were all on H1-B visas.

But its best move i made to buy my first house when i did. Purchased for $157k, put about 15k into it and sold it just two and half years later for $305k. The market just went crazy.