% of pre-approval amount

juliebeannn · January 2014

Hey nesters! Soooo...I know people are usually pre-approved for way more than they're willing to spend on a home. DH and I just reached out to a lender to get pre-approved and I was just curious on how much people actually spend versus, how much they were approved for. So, my question is..

What percent of the pre-approval amount did you actually spend on your home (preferably first home)? (ie. pre-approval amount: $400k, actually spent: $300k, percentage spent: 75%)

Thanks.

SmrBrd2012 · January 2014

This probably isn't that helpful since we haven't actually bought a home yet but we're preapproved for about 350k but we aren't looking any higher than 300. Hopefully closer to 250.

cupcait927 · January 2014

First time posting - FI and I are in the process of buying our first home right now. The mortgage will be in his name only and he was preapproved for $120,000. We put in an offer of $95,000 (didn't want to spend over $100,000) and it was accepted. We may lower our offer to $93,000 depending on a couple of items on the home inspection.

short+sassy · January 2014

For me, it wasn't so much what they preapproved me for as it was what I was comfortable budgeting each month for housing (mortgage). I figured out a monthly payment and then worked backwards with a mortgage calculator to see what price point that put me in.

As it turned out, the house I bought (first home) was 50% less than what I was approved for. I was willing to spend much more than that for a home, but I just got very lucky a home with most of my parameters in one of my favorite neighborhoods came up for sale as a CHEAP foreclosure. I was also fortunate to be buying at the bottom of the housing market for my city. It has been steadily on the upswing since I bought my house about 2 1/2 years ago. Woo hoo!

Sisugal · January 2014

Rule of thumb is to keep your housing expenses no more than 25-28% (30-35% in a HCOL ara) of your TAKEHOME pay - that includes: mortgage, PMI, taxes, insurance, utilities and HOA. Be sure you still have a good emergency fund in place after closing.
Save for downpayment, closing costs, moving costs, start up utility deposits, repairs/renovations, decorating/furniture/applicances, tools, yard care equipment.
Add a line item to your budget for ongoing maintenance and upkeep.

emily1004 · January 2014

We plan on using 100% of what we are approved for. Only because the homes in our area at $500K+. If we wanted to borrow any more than $417K we would have to apply for a jumbo loan, and we do not wish to do that. Our state is not HCOL, however the area we want is significantly higher than most areas. The limit is $417K on a normal mortgage.

G2SoccerTaz · January 2014

We were approved for around 150,000, but we spent less than 90,000 on a foreclosed home. We looked at our budget and came up with an amount that we felt comfortable with. We did not want to be stressed each month with payments and we wanted to have some money left each month in order to travel to see family.

Belle0720 · January 2014

I was preapproved for $450,000 not taking into account H's income (then FI). We spent $432,500. I used a mortgage calculator and came up with a budget that we were comfortable with. We certainly would have loved to spend less but we wanted a 3 bedroom 2 bath in good condition and we got a great price (for our area) on a short sale and absolutely love our home!

jessica490 · January 2014

When H and I bought our condo together, we were approved for about $250,000 range or so, but we bought a condo for $160,000 and we can afford that monthly payment....it would be tough with anything higher than that right now....but we are saving to buy a house and regardless of what we are "approved" for, we will always go by monthly payment cost.

juliebeannn · January 2014

Thanks for all the input ladies.

LoveKiss · January 2014

We are in a HCOL area (Washington DC metro) and we spent 53% of our max approval amount (with a 20% down payment). We laughed when the lenders told us the amount they would be willing to approve us for. There was no way in hades that we would be willing to spend $800-900k on a home. We wanted to purchase a home that we could afford on a single income, if necessary, so that is the amount we used to cap our search.

duckie1905 · January 2014

We were pre approved for $400,000 which I thought was ridiculous based on our incomes and the amount of debt we are carrying.

I did the math myself and figured out that since our goal is to live on one income and save the other we weren't comfortable with more than $150,000 (and that is pushing it a little). I'd rather go for $115,000-$130,000.

But, I'll also say that even though we currently rent in a pricey Chicago suburb we are planning on buying in an outlying county were real estate is crazy cheap.

% of pre-approval amount

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