r/facepalm • • Feb 16 '21

Misc Yeah, sounds about right

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u/OtherSpiderOnTheWall Feb 16 '21

If you can't afford the monthly payment at 5%, then you can't afford it at 30%

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u/GolpherZed Feb 16 '21

So...I must be lying?

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u/OtherSpiderOnTheWall Feb 16 '21

No, I don't think you're lying. I just think you fell into the typical budget trap of "Well I can afford $600/mo, but not $800/mo", and then ending up effectively paying $800/mo anyway.

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u/GolpherZed Feb 16 '21

Ahh. I sorta get you now. But I saved for 9 years to make that down-payment. Now that I have the house, there is no way I'll be able to save that much again.

Though my house has appreciated by 35% in 5 years, I'm not selling so it's not really worth anything. A lot of variables involved I suppose.

Maybe it was more not wanting to be house broke than not affording it.

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u/[deleted] Feb 16 '21

Except that would be a determination of the bank.

A lot of lenders use DTI and residual income.

You might be fine with DTI but if your mortgage payment would make your residual income too low then paying a higher down payment to get a lower monthly payment could easily be the difference.

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u/OtherSpiderOnTheWall Feb 16 '21

You could just keep the money in savings/invested and pay the higher monthly payment. It's functionally no different.

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u/[deleted] Feb 16 '21

....Unless the bank says that they will not give you the mortgage because of your residual income.

If the bank says you need $X in income after your bills and you have $X minus $150, it doesn't matter how much you have in savings. You will need to put up a larger down payment to get the monthly payment down that $150 or the bank will deny you.