Gettin approval for loan

[Babek Sandhar]

Hey BP,

I’m hoping someone can help me answer this question.

My goal is to get approval for a loan to get a house in the Bay Area. I would be a first time home buyer & I understand I can get one now, but my belief is that a recession will come and see some type of drop in prices.

I just got a job that’s providing passive income (finally). All of my wealth & savings in the past has derived from investments I made over the last ten years (mostly tech stocks I purchased in 2009-2010 and sold in late 2018).

My credit score is somewhere around ~800. I use my credit card and pay it off in a timely manner. However, I’ve never made any huge purchases (like a car). I may have paid some of my school tuition on credit a few times, but paid it off quick, I can’t recall if I used my credit card or my dads (who helped pay for my school, didn’t want to take a student loan).

A couple questions I want help answering is:

How hard was it to get a loan after the 2008 crisis?

What can I do to continue to build credit?

What’s the additional requirements I’m not considering when trying to get a loan? Assuming I have enough money to put on a down payment (20%)?

Maybe if someone could walk me through what I need to do to be ready to buy if a recession was to occur and credit tightens (which is a cause and effect of recessionary pressures).

My goal is buy during this type of period and I understand that could be difficult as lending practices change during hard times. Thanks!

[Brian Garlington]

@Babek Sandhar    Those of us that have been through more than one recession will tell you to actually not wait for the recession.....During the last one there were some banks that actually stiffened up their guidelines on how they would give mortgage loans. It was a catch twenty two.....Lower home prices.....but tougher loan requirements.....those with CASH were the ones that actually "cleaned up" when they "waited for the recession".