Home buyers : what was your preapproval amount?

Honeywell that1guy
May 10 28 Comments

I’ve heard the amount of their preapproval is ridiculously high. More than what anyone should be able to afford. But what numbers are they?

Given a household income, a good credit score, and negating any sort of debt obligations, what (ball park general/rough) amount is the preapproval for? And yes I know the general “rule” that you “should” stay under 35% of gross income, but I’m looking for what banks will approve you for, roughly.

I.e. a $300k household will be approved for 3x, 5x, or..?

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TOP 28 Comments
  • 310k TC, 160 base, wife is sahm, approved for 1.5M. Have net worth of 1.5M.
    May 104
    • Accenture / Eng__xjwg
      wait, and the bank loan covered the downpayment for the home?
      May 10
    • No that’s just how much I was approved for. I haven’t bought yet. Looking to only spend like 1.1-1.2M at most.
      May 10
    • Google pmperson
      With that NW, you could have made a cash offer and then got the loan, right?
      May 10
    • Part of that NW is in retirement funds, so not quite. 800k in liquid NW.
      May 10
  • New / Mgmtgit commit
    What’s your TAM and TC?
    May 104
    • Honeywell that1guy
      OP
      I haven’t gone through the approval process yet, that’s why I’m asking generally what the range will be to make sure it’s within range.
      May 10
    • New / Mgmtgit commit
      The range depends on your credit, your current TC, bank or lender, and the current market.

      So it can be variable.

      I would, instead, not worry about the total, and focus instead on what is a feasible amount for you. You don’t want to be house broke. So what are you comfortable spending?

      The better your credit, the more square footage you can get, because instead of paying bank fees, you’re paying down principle.

      The farther out you go from the hub, the more square footage you get.

      Add the total price, plus lending fees and closing cost, plus taxes, plus insurance, minus down payment, and add a bank lending fee and you’ll see your monthly mortgage. If it’s too high adjust the total price until you’re comfortable.

      Reverse engineer the calculation to match your ideal mortgage payment.
      May 10
    • New / Mgmtgit commit
      Just because they allow you to spend up to 2.8 million doesn’t mean you need to cap that out.
      May 10
    • Honeywell that1guy
      OP
      I wasn’t asking to cap.
      May 10
  • LinkedIn / FinanceZerotoIPO
    I got 4x base salary. Not including stock or bonuses :(
    May 102
    • Try different banks. Wells Fargo seemed to take into account rsus and bonuses.
      May 10
    • LinkedIn / FinanceZerotoIPO
      Thanks I’ll try it!
      May 10
  • Snowflake Computing SbqW12
    That’s sketchy they approved you for such a high mortgage
    May 101
  • Bose sockerfan
    Yeah banks have no problem approving 6x salary
    May 101
  • Nvidia gdjshesn
    Got 5X of base
    May 100
  • Microsoft pJcW86
    I had 5x of gross although I have other assets as well.
    May 100
  • Microsoft UseDeFeet
    Mine approval was 6x gross income, so that’s what I bought.
    May 100
  • Uber / EngmH7bSe
    You are wong. The rule is 45% of pretax income excluding RSU.
    A few banks would consider RSU income as well.
    May 104
    • Bose sockerfan
      I got approved for 6x my base salary not counting bonus . Bonuses and Stocks are counted in 2nd year of you getting them
      May 10
    • Microsoft newtoblind
      Why are you not counting them? Now a days that's your major saving or asset
      May 10
    • Bose sockerfan
      I had changed jobs so the bank would not count them
      May 10
    • New hqWe60
      both wrong, 65% pretax excluding bonus and rsu multiplied over 15 years
      May 11
  • New / Mgmtgit commit
    TAM = Total Approved Mortgage Amount.
    May 100
  • New 2wn
    I got 4x salary, but only needed 2x
    (Pittsburgh)
    May 100
  • New / Mgmtgit commit
    I stayed low. I went with this rule. It needs to be, no greater than my TC.
    May 100

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