A Question

[CocoaGoddess]

A lot of you say that the banks pre approved you for more than you were comfortable paying--was this the actual loan amount, or what you were willing to pay per month?

I'm just wondering ....

[monkeyinabarrel]

well both i guess. for instance we got approved $X00,000. But we would never buy a house for that because the monthly payments would be more than we wanted to pay and the house would be way too big for the two of us. We want to own a house but we still want to travel and eat good food. Hence we would rather buy a house for 2/3 of $X00,000 and use the extra money for other things.

Generally the larger the loan amount the higher the payments so the two are really interrelated.

[fridayheather]

Originally Posted by monkeyinabarrel well both i guess. for instance we got approved $X00,000. But we would never buy a house for that because the monthly payments would be more than we wanted to pay and the house would be way too big for the two of us. We want to own a house but we still want to travel and eat good food. Hence we would rather buy a house for 2/3 of $X00,000 and use the extra money for other things. Generally the larger the loan amount the higher the payments so the two are really interrelated.

I agree, but also people would get get an ARM where the payments would be lower and more appealing for a few years and then BAM! High payments that can't be afforded (which is one of the reasons the mortgage industry is in the tank right now, people getting mortgages they could afford one year but not the next).

You might want to try a mortgage calculator, enter in the monthly amount you feel comfortable paying and then see how much house you can afford (and don't forget about taxes and insurance.)