Tuesday, February 24, 2004

I'm shocked......

at how easily I'm given access to an insane amount of credit.

I'm in the process of buying my first home, and yesterday dealt with my mortgage pre-approval. Now, standards may tighten as a I move from pre-approval to final mortgage, but the laxity still shocked me. For example:

I was pre-approved for 4.5X my annual salary, or 33% higher than my calculated ceiling.. How did I manage this? I mentioned my recent bonus (20% of my salary), which my broker promptly assumed would occur every year (and at the same payout level.) Gulp.

Not only that, but my broker also suggested a loan structure that while still representing 95% of the prospective value of the house, didn't include PMI, as 15% of the loan was in the form of a home equity loan (or 2nd mortgage.)

While such generous credit terms won't really affect my personal choices, I'm wondering how many other loaded guns are walking around out there with an excess of mortgage debt and NO PMI!

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With my new friends on the Great Wall of China

With my new friends on the Great Wall of China
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Uncommon Man's Creed

"I do not choose to be a common man. It is my right to be uncommon -- if I can. I seek opportunity -- not security. I do not wish to be a kept citizen, humbled and dulled by having the state look after me. I wish to take the calculated risk; to dream and to build, to fail and to succeed. I refuse to barter incentive for a dole, I prefer the challenges of life to the guaranteed existence; the thrill of fulfillment to the stale calm of utopia. I will not trade freedom for beneficence, nor my dignity for a handout. I will never cower before any master, nor bend to any threat. It is my heritage to stand erect, proud, and unafraid, to think and act for myself, to enjoy the benefit of my creations, and to face the world boldly and say, "this I have done." All this is what it means to be an American." -- Anonymous