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..?
You are wong. The rule is 45% of pretax income excluding RSU. A few banks would consider RSU income as well.
I stayed low. I went with this rule. It needs to be, no greater than my TC.
Mine approval was 6x gross income, so that’s what I bought.
I got 4x salary, but only needed 2x (Pittsburgh)
TAM = Total Approved Mortgage Amount.
What’s your TAM and TC?
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.
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.
310k TC, 160 base, wife is sahm, approved for 1.5M. Have net worth of 1.5M.
wait, and the bank loan covered the downpayment for the home?
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.
That’s sketchy they approved you for such a high mortgage
Sketchy AF.
I had 5x of gross although I have other assets as well.
Yeah banks have no problem approving 6x salary
That’s pretty amazing!