Buying A Home
love2nap
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Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Pre-Approval vs. Actual
So we just went got an estimate pre-approval amount... which was a lot. like 100K over my comfort level, and just a little over my husbands original estimate. Did you get pre-approval more than you were comfortable with, or is it what you expected? If you don't mind me asking 
thanks!
Re: Pre-Approval vs. Actual
We had done a few on-line pre-approvals so we knew the banks would offer us WAY more money than we'd be comfortable with. We'd literally never be able to leave the house if we spent that much, we'd be so house poor. When we went for our actual pre-approval, we asked for a specific amount that was about $150-$200k less than what we qualified for. We're in a pretty HCOL area and it still worked out just fine.
Ditto pp's. In my experience, they're only looking at your income, large debts like other mortgages or car laons, and your credit. They're not taking into account other living expenses, bills, how much you want to put into savings, etc. It's definitely up to you (and in your best interest) to figure out your own budget.
When we met with the loan officer about preapproval, we gave a max monthly mortgage payment and they backed out our max purchase prices based on what we had available for down payment and closing costs, with both 10% and 20% down scenarios.
Like everyone else we were pre-approved for way more than we would spend. When we went into the meeting with the lender he asked us what we planned to spend. He then approved us for that amount but before we left we just asked how much he would have approved us up too. He said about $100K more than our max was.
I will say, we are now under contract for a house that is $5k more than our original max budget was.
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Mostlenders will preapprove you for much more than is comfortable.
Keep your housing costs to 25-28% of your TAKEHOME pay.(mortgage+taxes+PMI+insurance+utilities) 30-35% if in a HCOL area.
Unlike everyone else here, we didn't have this issue. I honestly have no idea what is the maximum price house that we could be approved for (although I am a little curious, I do NOT want to be tempted into buying more house than we can afford).
The lenders all just asked what amount we wanted to be approved for, then approved us for that. I had already done my research on how much I wanted to spend based on what felt comfortable with our budget, with plenty of room for emergencies.
We were like the PP, we were asked what range we were looking at and were approved for that. Having heard so many people say that banks approve you for way more than is comfortable, I was sort of surprised that they never gave us a number but used what we came to them with. Thinking we'd originally get approved for a lot more than we wanted, we had done research and looked at our budget and knew what we wanted to spend each month on PITI and figured our house range based on that. So it was really easy to give them a number.
I actually liked the bank's approach of asking us rather than approving us for what they thought we could do. It just seems more responsible on the bank's part and if this is how the process always was, perhaps there wouldn't have been so many people buying more house than they could afford.
This. We spent less than half of what we were approved for.
same here...also our lender did not put the approval amount in the pre approval letter. If your "number" is in the letter, remove it.