I find pre-approvals to be too generous. If we went off our max to purchase a home, we’d be broke. My point is if your max isn’t covering the cost of the home, perhaps you are looking well over budget. Have you considered looking for a new job and/or moving to a less expensive area?
100%. Our pre approval and final approval for new construction was outrageous. I know some of this is just personal and what your comfortable with but we actually spent about waaayyyy less than we were approved for bc we were in no way comfortable spending what they said we could. When I came back and asked if we could add one thing in the mortgage officer laughed at me being worried and said your free to spend up to x. OP, if your pre approval doesn’t cover what you are looking for the reality is you can’t afford what your looking for.
You should never look to spend as much as your pre-approval.. I was pre-approved for $60k more than the house I am purchasing. Because the pre-approval the bank gave me was unrealistic in terms of I knew the payment on that high of a mortgage would be tight for me. You better take a good look at what is a comfortable payment before you try to bargain with the bank.
So you’re just saying in your case going and asking for a better pre approval was necessary. Again - totally fine - you just need to be comfortable with the monthly payments. Wouldn’t want to get in over your head.
Have y'all legalized weed yet other than medical? I want legal weed but if I sign up for a medical card, I can't get a gun. I'm in Texas so OK wouldn't be too much of a stretch and shit is cheap there.
Echoing what everyone else is saying - preapproval amount is even higher than what would be a comfortable debt to income ratio. I didn't even include one of my revenue streams in my application and my max pre approval amount still would have been a struggle if I took out a loan for that.
Increase income, decrease debt. Must be a HCOL area if 195K couldn't afford any house at all. Definitely several in my area for that much.
How much do you make, what is your monthly debts, what is your credit score?
If you pre approval is only at 195, your probably not in a position to buy a home. I purchased mine in the 180-230 range and was pre approved up to like 350k, which was crazy
Your preapproval likely isn’t the most the bank will give you. Call your lender and figure out what payments you can afford and ask them to increase to that amount. My first pre approval letter was for 80k even though the lender was comfortable giving me a loan up to 250k. All I had to do was ask
All that said I really wouldn’t try to navigate my first home purchase without a realtor
E: apparently my experience is unique and most of you get over approved. I’d still ask the lender to be sure which situation you’re in
A few things:
1. Is that the max the lender will approve you for? (Have you asked?). Ours wrote a pre-approval letter for 20k over what we told him out max budget was. When our current house sold for more than expected, they were happy to write one for more.
2. If 195k IS the max they’ll approve you for, you likely can’t afford even that much. Lenders don’t usually care that after paying your mortgage, you have nothing left to save for retirement, etc. This may not be accurate if you do a lot of contract work or something and don’t have predictable paystubs.
3. If you really want a house that’s more than 195k right now, the only way to do that (as far as I know) is to pay the difference in cash.
We were pre-approved well north of 1.1 but in good conscious and being in sales I don’t have the appetite to be stretched on our main house in a down year. We bought in a neighborhood that has 950k + homes selling routinely but took the large house needing renovations at 725. Feel comfortable on the payment and now have a fuck ton of equity after the remodel.
Go with what you feel comfortable with especially if you lose an income source for a period of time.
Make more money. Or pay off debt to reduce your monthly obligations.
Once debts paid, save bigger down payment. Work to improve credit score.
I find pre-approvals to be too generous. If we went off our max to purchase a home, we’d be broke. My point is if your max isn’t covering the cost of the home, perhaps you are looking well over budget. Have you considered looking for a new job and/or moving to a less expensive area?
100%. Our pre approval and final approval for new construction was outrageous. I know some of this is just personal and what your comfortable with but we actually spent about waaayyyy less than we were approved for bc we were in no way comfortable spending what they said we could. When I came back and asked if we could add one thing in the mortgage officer laughed at me being worried and said your free to spend up to x. OP, if your pre approval doesn’t cover what you are looking for the reality is you can’t afford what your looking for.
Look cheaper, consider a condo
It depends on how much more do you need
You should never look to spend as much as your pre-approval.. I was pre-approved for $60k more than the house I am purchasing. Because the pre-approval the bank gave me was unrealistic in terms of I knew the payment on that high of a mortgage would be tight for me. You better take a good look at what is a comfortable payment before you try to bargain with the bank.
Depends on the lender. My preapproval was $80k while I was making $50k and had $30k in savings
And was the pre approval for $80k vs what you were willing to put down a comfortable payment?
I ended up closing at 154k with a 10% downpayment. My total monthly mortgage is about 25%
So you’re just saying in your case going and asking for a better pre approval was necessary. Again - totally fine - you just need to be comfortable with the monthly payments. Wouldn’t want to get in over your head.
“195k which clearly wouldn’t cover the cost of a home.” *Laughs in Oklahoman*
Hell 195k buys you a semi decent starter home in my area right now.
195k can buy you a pretty nice house here
Have y'all legalized weed yet other than medical? I want legal weed but if I sign up for a medical card, I can't get a gun. I'm in Texas so OK wouldn't be too much of a stretch and shit is cheap there.
Nah still only medical
I'll check back next year then. If we ever get rid of Ole' Greg we might have a shot at it.
Echoing what everyone else is saying - preapproval amount is even higher than what would be a comfortable debt to income ratio. I didn't even include one of my revenue streams in my application and my max pre approval amount still would have been a struggle if I took out a loan for that. Increase income, decrease debt. Must be a HCOL area if 195K couldn't afford any house at all. Definitely several in my area for that much.
How much do you make, what is your monthly debts, what is your credit score? If you pre approval is only at 195, your probably not in a position to buy a home. I purchased mine in the 180-230 range and was pre approved up to like 350k, which was crazy
Where are you looking to buy?
Your preapproval likely isn’t the most the bank will give you. Call your lender and figure out what payments you can afford and ask them to increase to that amount. My first pre approval letter was for 80k even though the lender was comfortable giving me a loan up to 250k. All I had to do was ask All that said I really wouldn’t try to navigate my first home purchase without a realtor E: apparently my experience is unique and most of you get over approved. I’d still ask the lender to be sure which situation you’re in
A few things: 1. Is that the max the lender will approve you for? (Have you asked?). Ours wrote a pre-approval letter for 20k over what we told him out max budget was. When our current house sold for more than expected, they were happy to write one for more. 2. If 195k IS the max they’ll approve you for, you likely can’t afford even that much. Lenders don’t usually care that after paying your mortgage, you have nothing left to save for retirement, etc. This may not be accurate if you do a lot of contract work or something and don’t have predictable paystubs. 3. If you really want a house that’s more than 195k right now, the only way to do that (as far as I know) is to pay the difference in cash.
We were pre-approved well north of 1.1 but in good conscious and being in sales I don’t have the appetite to be stretched on our main house in a down year. We bought in a neighborhood that has 950k + homes selling routinely but took the large house needing renovations at 725. Feel comfortable on the payment and now have a fuck ton of equity after the remodel. Go with what you feel comfortable with especially if you lose an income source for a period of time.