Reply to There is no housing bubble in the DC area so get over it

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]I think banks are partially involved in this 'bubble' (if we want to call it this).  We are another example of lending at its best - monthly income ~$4000, approved for $450K with 2% down.  There is no way we could afford it if we went all the way to $450k.  We are looking realistically at $300-$400k and that is a big stretch IMO, but many people don't bother to run the numbers themselves and are quick to spend what the bank tells them they can.  Also, the lack of inventory almost requires you to continually look above the budget you initially set and blurs the lines of practicality.[/quote]

All the bank looks at is whether or not you have the available income to pay back the loan, period. They could care less whether or not you have money left over for food, utilities, or maintenance of the house, which is why they never bring these things up when evaluating your "credit worthiness".

If ONE bank out there asked you to fill out an estimated monthly budget and required you to sit down with a financial advisor prior to approving a mortgage, I'd say we may have turned a corner in our lending market. However, all we've done so far is given a cancer patient a pain reliever and told them "you're better!"
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Speaking for myself - I don't need a bank to help me do my budget.  I took into account all my other expenses and figured out what I wanted my mortgage payment to look like.  I never asked how much they would let me borrow in total.  I'm sure it was much more than I spent.

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