Pre-approval insanity.

posted 3 years ago in Home
Post # 3
Member
11734 posts
Sugar Beekeeper
  • Wedding: November 1999

When we got our preapproval, it was more than double of what we paid for our house.  Granted, we live in an expensive area, but I also saw why people can easily get in a lot of trouble with their mortgages.  We’re comfortable with what we pay now, and I think had we bought up to our preapproval limit, we’d be super housepoor and drowning. 

What it boils down to is, forget about the preapproval number and go with what you’re comfortable with.  If you were preapproved for 300k but are comfortable up to 175k, tell your realtor your limit is 175. 

Post # 4
Member
4483 posts
Honey bee
  • Wedding: April 2015

FI is in a smililar situation. His preapproval plus down payment adds to almost twice what he feels comfortable with! We both feel that it’s crucial to stick to the original comfort zone even though a bigger or nicer place may be tempting.

Post # 6
Member
885 posts
Busy bee
  • Wedding: October 2013

I hear ya.  When we bought our house DH and I were pre-approved for $525K which is crazy!!  We ended up getting something in the 300K range.

At least here in Canada they have knocked the amortization period down to 25 years max (for an insured mortgage), so that reins people in a little.

Post # 7
Member
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Yeah, I literally laughed when our lenders told us how much they would be willing to pre-approve us for. We would have had a $5k per month mortgage payment, if not more, since it would be a jumbo loan which always has a higher interest rate and since the property taxes would be even more for such a pricey property. It was all out of sheer curiosity on my part, since we knew we were capping things at at an amount we could afford on one salary if we really needed to. But I just had to ask.  

 

Post # 8
Member
567 posts
Busy bee
  • Wedding: November 2013

@accorn:  I just started the pre approval process for the first time ever. I am glad I read through this thread, definitely helpful.

Post # 9
Member
1779 posts
Buzzing bee
  • Wedding: June 2014

We chose what we were willing/comfortable spending before even applying for pre-approval. That way we knew where we wanted to be and weren’t ‘tempted’ to consider a higher number.

Post # 10
Member
2882 posts
Sugar bee
  • Wedding: May 2014

@springbride23:  Thats exactly what I did too.  My bank kind of let me set my top budget, and wrote my pre-approval based on that.  

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