Gary,
I agree with you 100%. A 45% DTI is pretty steep. Especially if you do not have any other income sources. Some folks do and it’s just not income that lenders can count (maybe it’s a bonus that’s recently been added to someone’s base, for example).

Once you take 45% off of gross income, and then maybe 25% for taxes, etc…you’re left with 30% of your paycheck for food, expenses and let’s not forget savings/retirement.

It is all about consumers making educated choices about their finances. Just because a preapproved credit card shows up in your mail box does not mean you should go use it or max it out…the same goes with how much one can be preapproved for with financing a home.

I basically went to my LO, and told him, look, I bring home this much, I have bills that are this much, I feel comfortable spending this much on mortgage and taxes (VA Loan, no PMI), how much house can I afford?

Turns out it wasn’t that much, when I added in the HOA, but I’m getting a nice two bedroom condo in Kitsap county about half the distance from work that I travel now.

My mortgage rate is not what I hoped it would be, but that’s life. I’m comfortable with my payment, and the appraisal just came in at about $15,000 above what I’m buying the property for, or, more than 10%.

Mortgages are about being realistic in what you can afford. The LO or processor, or lender may tell you that you can afford more, but what does your gut tell you? When it comes right down to it, I’ve found out that’s my best ‘advisor.’ If you don’t feel comfortable, then it’s not right.

Gary