Please ensure Javascript is enabled for purposes of website accessibility

Your Pre-Approval Amount Should Not Be Your Limit

Many home buyers, especially first time home buyers, will try to buy as much house as they think they can afford. If they are smart, they will get pre-approval on a loan amount before they go house shopping. The problem may come if they actually use the total pre-approval amount as "permission" to buy a house. 

People who do this can end up being "house poor". That means they become slaves to their house payments. To get a federally insured loan for 30 years, your mortgage can not be higher than 29% of your annual gross income. But people who spend that much are pushing the limits on their budgets.

When buying a home, keep in mind that your other desires will also increase. Things like home improvements, furnishings, and increased taxes and insurance can all take you from a very good place, to a challenging position. Buy carefully, and be conservative.

Brighton Escrow of Hermosa Beach wants you to enjoy your new California home. That means you should buy under your "approved" loan amount. If you have questions, please contact us.

Related Posts