The Battle for a Mortgage

On 1^st April of 2007, The New York Times published an article about mortgages. The author of the article, Christine Haughney, tells us what it happens in New York when you want to buy a house. I thought that if you had a high salary (with six-figure salary) you would have more facilities to borrow money from banks. But, it seems that in recent weeks, it has begun to be very difficult, because lenders try to stem losses from loans to the weakest borrowers. Of course, lenders always lend money when they don’t loose anything, but it’s curious that they try to make up for money with high level people. You could think that it’s a justice question.

But if you continue reading the article, you realize that it isn’t the question. The problem is new lending requirements and the kind of payer. Basically, banks say: ‘You are going to pay the piper for any little mistake’. I mean, for instance, delays in their mortgage applications. Then, when New Yorkers want to have a mortgage, potential problems are low credit scores, high credit-card balances or listing a suspiciously high salary for a given job. And these things aren’t a problem for rich people, but it’s a problem for people with a high salary. The main point is that they have a not bad salary, their mortgage brokers have problems to negotiate the deal, and if this kind of people have problems, what happens with medium salaries? Is it impossible to buy a flat without a six-figure salary? Now, in New York seems impossible, but I think we could have the same discussion here, maybe without the figure of mortgage broker, only the bank.