What Has Happened to Real Estate Prices?
Back in the late 1990\’s and in the early part of the 2000\’s banks had tougher guidelines to purchase a property when using conventional financing. Banks would lend you money based on your debt to income ratio and your credit score. Back then, a maximum of 30 percent (sometimes up to 40 percent) of your income could be used toward a mortgage payment. Meaning, if your monthly income is $2,000, you could qualify for a mortgage payment around $600 including principal, interest, taxes, and insurance (PITI). Most investment properties required a 20 percent down payment and proof that you could afford the investment mortgage payment in addition to your residential mortgage payment.