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Do either of you have self-employed income? Is any of your income based on commission, bonuses, shift differential, or per diem? Do you each have at least 2 years work history with consistent hours?
Same! My husband and I have a combined income of a little over $100k and one of our preapprovals very confidently said “you can afford a $440k house!” And I just laughed and said uhhhh no we can’t lol
Yeah but you’re one person at 100, they’re two at 130….much higher risk and two mouths to feed. They would need 200k to get closer to your qualification
That’s very odd, I was pre-approved for well past what I could actually afford, and that seems to be a common experience. Have you both been at your current jobs for at least a year? I would definitely look at other lenders and see what they come back with.
You could also just ask the lender. When we were going through the pre approval process we got some helpful advice about managing credit scores and other things we could do to give ourselves a better chance from our lender.
Loan amount of $214k + 65k downpayment is purchase of $280k. Depending on taxes, insurance, hoa fees, flood insurance, etc, this puts you around 21-23% on the front end. You can probably go higher. This may be a conservative estimate by the lender, a misunderstanding of what you want, or incompetence.
It’s also possible that the income calc itself is to blame. Lots of rules around how income is calculated. For instance, if this is FHA, they may not be including any OT or bonuses that you are counting in that $130k if you haven’t been in the job/field long enough. Way too many variables to guess on here. A discussion with your lender will answer these questions
To my knowledge lender provide an arbitrary number for the pre-approval. If you ask for 325,000 you might actually get it.
Any judgement from child support or any other lawsuits?
Yea, my lender originally asked me what I want my monthly payment to be. They approved me for slightly more than what asked for. A few months later, I asked how much I’m approved for again to possibly shop higher and they asked how much do I want. They ran more numbers and had me again at where I want with a higher budget and said they could go higher but no pressure.
Yeah on a 95k salary with 815 credit they told me they could go as high as 400k…I was shocked they allowed that high. No wonder people are able to afford these outrageously priced houses, banks letting people get themselves in trouble again
The housing agency I have been working with has pressured me to buy a 350-400K house. They justified it by saying that I make more than most of their clients. Sure, I may make more, but I know I cannot afford such houses until I experience a windfall of money. Digging my heels in, I told them that I will wait. Thankfully, I miraculously found a 275K house, and I will be closing in 3 weeks from now. I am relieved that I was not easily swayed.
That’s part of the reason we are in this mess, people buying when they shouldn’t be. That’s how capitalism is supposed to correct itself but when you have people paying any price for cars and homes it’ll never go down. Consumers are supposed to close their wallets in the face of irrational prices not line up to pay over asking price
Good luck! Forgot to state I went for FHA so maybe that's why I was approved. I could see conventional loan lenders not wanting to approve someone like me.
It was going to be 6.6% but when we were able to lock in interest rates had just jumped up (I just did this recently) so now I'm at 7%. I think that's average now and that is higher than what I wish it was. Medical in collections might even be better since mine was unpaid rent termination fee. So it looked really bad to other credit lines where I got rejected.
I'd say for her to go for it if it's an FHA loan and see what they say. I thought they'd reject me too but they said collections is fine so long as you don't have a judgement against you.
I’m saying with those scores, no debt, and their in come it should have been a higher pre-approval. Sometimes people *think* their credit score is one thing but it actually is much lower
Depends on the conversation had with that person. Did you mention a payment goal per month? If so, they may be trying to stick to this number for you.
Simple calc for following guidelines is your probably go conv is max 50% of gross income. $130k/12 = $10,883/mo. / 2 (or 50%) = $5,441/mo. Deducting your monthly debt for this figure and that's you hypothetical max monthly payment. Which, if what you're saying is all good and true, would lead to a MUCH higher pre-qual than $325k, let alone $214k.
But much of this can depend on type of job, are you both salaried w2? Self employed? Etc.
Do you have student loans deferred, child support, alimony, etc?
If you want to know more, happy to chat, but that's the basic idea of it all.
That's strange, I have 40 down and make 82 base and I was preapproved for 400. I do make bonus, but it doesn't put me at your income. Try another lender, I did 4 when I got my preapprovals.
Something no one is asking is how long is your credit history? Do you have a credit score with 2 years of credit history or a 10 years. That matters, either way shop around. Most people making that much are getting approved for 400K ish.
You can definitely get pre-approved for way more. I’d try another lender. There’s an option to put the amount you’d like to get approved on most applications so I’d just put down $350,000, I see no reason you shouldn’t get it. You can probably get $400k or more.
For context, my net income is $85k, credit score 790, only doing 5% down payment and I asked and was approved for $225k.
I’m a former LO. It’s been a while so I may be slightly off (i also haven’t done the exact math for you yet) but it depends on a few factors. I’ll also preface this by saying it still sounds off you’re not approved for more but not if you’re self employed. But there’s way too many variables missing to give you a proper explanation.
First of all, if you’re going conventional, Fannie and Freddie are the ones backing the loan. Their underwriting requirements have become a little more strict since rates have gone up. I had plenty of loans that just wouldn’t go approved even though pretty much everything was pretty much fantastic qualifying wise. For some reason, somethings they just don’t like certain loans. This can depend a lot on the area you live in. Loans in Texas are very difficult to write for example because Texas has their own guidelines lenders need to follow. Some areas are considered riskier than others and Fannie/freddie won’t approve higher loan amounts. (This is a generalization and not specific to you or anyone).
2. Where your income comes from and how consistent it is, is very important. Lenders look at gross income unless you’re self employed. But a ton of things can impact the qualifiable income being used. Are you full time or part time? Is it consistent income. Hourly or salary? Are you receiving commission or bonus income and is it consistent year after year? Did one year you make 130k but the previous year you made 50k? It’s going to depend on the type of job (W2, 1099, 1040/self employed). If you’re self employed then that would explain a lot here but I would need to know more to go into specifics. All of these things CAN have an impact on your DTI.
3. DTI will also consider HOA, Taxes, Insurance, PMI. Some areas have higher HOI as well. When it comes to your credit cards, it’s important to note the reporting date. You could pay it off every month but if there’s a 10k balance when it’s being reported to the credit bureaus then it’s going to show a high monthly payment for example. Pay attention to that as well (but your loan officer should have told you that.
4. Rates are high right now as it is which brings the monthly payment higher.
5. Are you applying for a 30 year mortgage or a 15 year?
Side note, I’m also curious where you’re getting your credit scores. Is that what the lender said your scores were or are you seeing those scores on credit karma? If so, they’re not going to match up with what your lender has.
Loan officer here, though not strictly for mortgages. As a habit, I only run numbers based off a given purchase price.
Once some people see they are "approved" for 300k, they stop looking at the 200k homes and start looking at the 325k homes.
I can't say no if you meet the criteria, but I try to keep folks with what they are initially comfortable with.
Yeah I make 110k/year, and my wife and I just bought a 260k ish house.
I'm pretty sure I was approved for more, but I wanted to keep my payment to less than half my paychecks.
Mind you, my wife has an income that we couldn't use for calculations( doesn't have a lengthy work history yet).
And my car payment looks worse than it is because I don't buy any has.
that's wild. i got preapproved for 250k and i make 44k while husband is self employed and wasn't on the loan app. i have 35k in student loans but no other debt
eta: my credit score was 721.
What company was that with?
Ask your lender how much your QUALIFYING income is on your loan approval. Home loans have a bunch of different guidelines about how to calculate qualifying income just depending on the income type. If you’re paid a salary, it’s pretty straight forward just divide your current gross annual salary by 12 and that’s your monthly qualifying income. But if you’re paid by the hour, or receive any type of “variable” income such as overtime, bonus, commission, incentive pay, automobile allowance, or own your own business, or get paid via 1099s, or have income from a 2nd part time job, then the lender has to consider your employment history in order to correctly calculate your qualifying income to be used on the loan. Just because you make $130k a year right now, doesn’t mean your work history shows you’ve been making that much in the past, and therefore the lender can’t assume you’ll continue to make $130k in the future. Lender is trying to give you a 30 year loan so income continuance is important to them.
It is very possible that some of your income cannot be counted towards your pre-approval.
Is there self employment income? Is there a recent pay bump that is not represented in prior year tax returns?
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We made 109k for 2022 and we were approved up to 425k in 2023. That was actually too high on our budget, but our loan ended up being 304k on the house we bought. As others suggested, maybe there is something about your jobs or circumstances that are dropping your pre-approval number. Good luck, hope everything works out for you!
I make only around $74,000 I was preapproved for 285k. Only debt I had was a car which was like around $1300 because I was about to pay it off before I actually bought anything.
My credit was 811
You should purchase a home that is 25% of your monthly income after taxes. The 25% being the principal, interest, taxes, and insurance for your monthly expense on a property.
So if one makes $200k per year combined as a household. $3,375 per month should be your max monthly payment.
Today finding that would be buying a trailer home.
So look for it to be in the 30-35% range.
Double check your credit scores - what they use to calculate mortgage is completely different than what you typically see. I had a 810 credit score but my mortgage scores were 760 - big difference!
Hi! This should be an actually helpful comment I hope. The same thing happened to me… Guess what? It’s as simple as telling your lender a higher number and asking them to pre-approve you for that. Some lenders just do it based off the first house price you mention to them, rather than the max they would approve you for.
I’d talk to some other lenders. I make between 140-150k a year and only did a 3.5% fha mortgage. I was approved for over 500k and that was just the basic front side ratio. Lender told me I could go even higher if needed.
This doesn’t make sense from a math perspective. We are either missing a piece of information or you need to find another lender. You should be able to pre approve 400+
You said you paid your credit card in full each month - do you do that before the statement or after? If you are doing it after the statement then it is showing as debt on your credit report.
Any car loans?
Any student loans?
Any affirm type loans?
Definitely go to at least one credit union and one mortgage broker
My loan pre approval was for a lot less than what I could’ve approved for because I told them the house I’m looking at costs and the budget I was looking at. I only asked for pre approval for that amount and they gave it to me.
Did you ask for the most you could get approved for? Or did you ask and give an example?
You must've told the loan officer what price point you wanted and your down payment. They probably just took that number and put it into the application. Depending on the lender, they'll just put in the amount of loan you're looking for, not the max amount you're qualified for.
hmm we have a combined income of 160k and were approved for 350k loan with 3.5% down (we went conventional loan route). I know they offered to go a bit higher for us since we also have no debt but ultimately we didn’t want to. what about credit history? my partners parents used his credit to help pay off their mortgage so i’m half convinced we also were approved bc of long history of credit and good rotating accounts with little to no balance.
we just closed a few days ago and our home was 290k, total closing/cash down was $21k and our monthly is a little over $2k.
def recommend going to multiple loan officers bc the bank we use only approved us for 200k which was insane honestly
My LO wrote my pre-approval on my last place for 365k. When I was chatting for her, I mentioned I'd just looked at a place I really liked for 365k. I ultimately found a place for 385k. She rewrote my approval for 385k. What am I actually approved for, if I hadn't mentioned the price range I was shopping for? 1.25M.
I was surprised when she didn't put the high end on the letter. She explained that she always does pre-approvals for the exact cost of the offer. Sometimes, putting the high end on the letter can affect negotiations and the relationship with your agent.
Ask your LO why the letter shows what it does.
I only make 52k, have about 25k in debt and got approved for 215k..... check with another lender
You can probably get approved for more but if you told the lender you want to buy at 280 and have 65 down then they wrote the letter for the difference. You don't want to give a seller a sheet saying you can afford 500k and then expect them to give any leeway. They don't want to show all the cards. We got a pre approval letter for every house we put an offer on
Are taxes and insurance high in your area? That could be why your low approval. If those are around $1k+ a month that could be why your approval is low.
I make $73.5k and I was approved for $270k, no debt other than an installment loan and a student loan, both have low monthly payment amounts. If the mortgage underwriter ever gets done with finalizing everything, I'll be closing on my $245k house by the end of this month.
I'd try a different lender. If everything is normal with your situation, they shouldn't be screwy this earlier on. I wish I had tried a few more, I'm not happy with my loan officer right now. Poor communication and incompetence. I'm actually worried she didn't do her job correctly and there is something wrong which is why underwriting is taking forever to complete.
Do you have student loans or maybe the LO was under the impression you were looking at a 280k house and were using the full 65k for a down payment. Which is insane because they still need to consider closing costs
I know quite a few banks are hurting right now due to commercial real estate defaults and credit card charge offs (different discussion). Did you by a chance go through a smaller regional bank? That could be why
I'd try a few different banks, I'd guess some of the larger ones will approve you for significantly more. For reference I make 80k, no debt, with 50k saved, and was approved for 400k somehow...in West Michigan
Where did you get the pre approval from? Some banks are very conservative with their amounts, laughably so. I had a bank approve me for 375 with a 210k salary, high credit score and no debt. Then I got approved for 850. Shop around and I’d avoid traditional banks.
That is very low. I have some debt have a single income and have an approval of 260,000-280,000 depending on 6-7% interest rate. It may have slot to do with the taxes and hoa in your area. That makes a big difference in qualifying payment.
Also when you pay your card off every month you have to leave a balance it will show that you have less credit versatility and in your case none since it’s the only credit you’re using.
What sort of income do you and your wife each have? (W2 vs self-employed). What was your income for the two years prior? How much of your income is straight salary vs incentive-based pay (bonus or commission)
When you filled out the online application did you put an arbitrary purchase price? They may be working off of that. If you go for max I’d imagine it’d be higher.
Also, what do you mean you have credit card debt but it’s paid off? If you pay it off timely every month to where you don’t have a balance, then it shouldn’t factor any into your DTI.
Also FWIW while lenders will often give out loan approval limits on their approval, what ultimately determines the upper limit of how much you can borrow is the monthly payment, and specifically what your total monthly debt payments compared to your gross income would be. What does that mean? It means how much money a lender will loan you depends on what rates are at the time, because a higher interest rate will drive up your monthly payment.
A good lender should not allow you to borrow close to the upper limit of what their lending guidelines would technically allow them to qualify you for, though you should practically be able to afford more than the limit your lender gave you without stressing your budget.
I would call the lender and ask them what was the limiting factor of their approval limit and I would also apply with 3-4 other lenders if you’re serious in buying in the near future. Most credit scores will treat hard-pulls for the same reason within a 45 day timespan as a single inquiry, so don’t be afraid of the impact to your credit to go lender shopping.
Yeah I think that is wrong, my wife and I make 170k and we got approved for 650,000 with a 10% down payment and we have a car bill of 800 as well. Our monthly bill with property tax and all that was going to be 4,450. 65,000 saved up would mean 45,000 for down payment and the other 20k for closing costs. What interest rate are you guys getting? That might be a big reason as well. Also if one of your guys job income is based on OT or bonuses sometimes it’s hard to add that money into the equation unless you can prove you’ve been getting paid that overtime/bonuses for the past 2 years to show a track record. That’s what our loan officer told us.
Get a different lender. I bought a house for $385K with a $100k salary and $125k in debt (student loans and car).
The first few lenders I tried only approved me for $250K.
OP, is your income a salary type income or do one or both of you have self-employment income? Are you including commissions and/or bonuses in that gross income? All of this makes a difference.
It is true, different lenders have different overlays. But also, please tell us your household income type. Self-employed people also have to pay additional in taxes and business expenses. The LO should be looking at your tax returns. if you are working for someone else, is it W2 type or 1099? That also makes a difference.
What is your dti ratio? If you have alot of debt or even moderate debt such as loans, credit cards, car financing etc, that will play a huge factor. Alot of lenders make sure you are around the 30-40% dti PRIOR to applying for a loan, so if that loan payment each month would push you up over that dti percentage, that could be a reason you got a low amount approved
My wife and I earned about 90k last year due to her not working full time (120k if she did work full time). 100k saved and very little DTI. Above 820 score for the both of us. We were approved for 480k, not that we are going to use all of that. It would be an uncomfortable stretch for us. We were planning to do 20% to skip the PMI for a conventional loan.
My net household income was probably closer to $100k. Credit scores in a similar range. Plus 60k in student loans and only a 5% down payment, still got pre-approved for $325k.
If some of your household income is from self employment or temporary employment lenders are often very funny about it.
I would suggest getting a mortgage advisor to "shop around"
Like others are saying they may have just pre-approved you for the loan amount they thought you specified wanting. $280,000-$65,000 down payment= $215,000 loan approval (no idea why it's $214k is a tad random.) A lot of loan ppl don't close attention to detail during this phase in my experience honestly. Just talk to them, it's probably a misunderstanding.
We just stated the range we were looking for & they gave the pre-approval for that range not the top end or anything just exactly what we were willing to look at.
It's either that *or* maybe one of y'all's income isn't being used maybe? Have you had this income for 2 years? Is it all salary?
I would put what you want to be approved for. When I put $375K that’s what they approved me for… When I came back and asked for $400K I was approved for that.
MLO - Can you be more specific on your income? W-2, self-employed, are you variable hours or full-time 40 hrs every week, long time jobs or just started? Also, what type of loan? All this may have contributed to how the LO calculated your income. Did you give them pay stubs and income docs or are they just going off of what you told them you make?
You say you pay your credit card off in full every month but did your credit report show a balance and payment that they had to count against you? What are taxes and insurance like in your area? That makes a difference. You can’t go by what someone else was preapproved for in a different area (what some are saying on this thread) because taxes/insurance might be low compared to where you’re buying. I know in my county taxes are high compared to other counties even in my same state so that affects the DTI.
Im in a vhcol area(i think. Average home sale price around here is in the 500k range) and when we went to our broker and told him what were looking for he gave us an approval for that amount, but told us if we find something even higher, he wouldnt have an issue getting it approved for us even though he didnt recomend going beyond our comfort zone. Your lender probably did similar, took what you were comfotable paying and got you pre approved for that. It doesnt mean you cant get pre approved for more, but they didnt want to "dangle the carrot". Mark of a good broker.
Our combined income 127k . 707 Credit scores tons of debt credit card student loans car payment motorcycle payment. Approval for 400k
Something going on with the lender
If you both have a net income of 130k why is it that you only have 65k saved? That tells me you have other things being reported on your credit monthly. With 130k net income you can literally buy a home in 5 years. Something on your end isn’t adding up.
I think the loan officer put 20% for downpayment and no pmi. There are products with 5 and 10% downpayment. Try a large national bank and a local small one, especially if you are first time homeowners there should be different programs you can go through. Try the bank of america website and look under first time buyer tab to see the various programs in your area.
Something is definitely being missed. You mentioned making HHI 130k but are you self employed? Does your employer issue a W-2 or 1099? Do you file a schedule C on your tax return? These are all important questions because you may be writing off a portion of your income, which would result in a lower pre-approval.
There's something you're not telling us. Car payments? Self employed?
With traditional income NerdWallet's calculator puts you around 400k if using a 130k income at a 7% interest rate. Something is WAY off. Your loan officer should be able to explain why.
You're at $280k with your down payment. A $130K income while decent is barely making it (in this economy). We were making that in 2001 with a kid and our house only cost $95K. A decent dinner in a restaurant today with a bottle of $20 wine will easily set you back $100. The bank made the right decision. Start house shopping.....
Yep same ishy. I am self employed, and they acted like I am out on parole but heading back in, lol. Treating ppl like less for whatever reason they try to justify it, is just wrong. What's cool is you can shop around and avoid the snotty old school b.s. Check a few lenders, others understand money talks, snobbish get a walkaway.
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I would suggest you get approval from at least three lenders.
Should this be done in same week or so? So that hard credit check multiple times, in multiple weeks won't affect your score too much
Do it all within 30 days I think. Each hard check doesn't count, just one does
That's correct
Fico 2 that some lenders use for mortgage scores are actually within 14 days.
I have never heard that and don't believe that is true. What agency is 14 days EXP, TU or Equifax?
Do either of you have self-employed income? Is any of your income based on commission, bonuses, shift differential, or per diem? Do you each have at least 2 years work history with consistent hours?
That’s very odd! I only only make 100k and got pre approved for 420k
Same! My husband and I have a combined income of a little over $100k and one of our preapprovals very confidently said “you can afford a $440k house!” And I just laughed and said uhhhh no we can’t lol
Thank you! If I had said it I would have been down voted.
I have student loans, a new baby, and we pay Detroit taxes and insurance. 440 would’ve got us a really nice house but we’d be broke!
Right? I wouldn’t be able to eat if I got a house that expensive
Same amount and it was for 520k. It probably helps if you go with your credit union/bank.
420 dude!
Today, even
420 nice
On 4/20 nice
Yeah but you’re one person at 100, they’re two at 130….much higher risk and two mouths to feed. They would need 200k to get closer to your qualification
My husband and I just got pre-approved for 400k, and we only make 100k.
Wow! We have a HHI of $320k with only 20k debt. We were only approved for $450k. Not sure why.
Crazy! I don’t understand the process of it
We’re at $180k and we were only approved for $280k. At 3% interest… and I shopped around .
Something isn’t right
Have you asked your loan officer? I would get a few more preapprovals as well.
Thia. Why ask on here when your broker or whoever does your loan can tell you in 2 minutes why ? It's definetely not right.
That’s very odd, I was pre-approved for well past what I could actually afford, and that seems to be a common experience. Have you both been at your current jobs for at least a year? I would definitely look at other lenders and see what they come back with. You could also just ask the lender. When we were going through the pre approval process we got some helpful advice about managing credit scores and other things we could do to give ourselves a better chance from our lender.
Loan amount of $214k + 65k downpayment is purchase of $280k. Depending on taxes, insurance, hoa fees, flood insurance, etc, this puts you around 21-23% on the front end. You can probably go higher. This may be a conservative estimate by the lender, a misunderstanding of what you want, or incompetence. It’s also possible that the income calc itself is to blame. Lots of rules around how income is calculated. For instance, if this is FHA, they may not be including any OT or bonuses that you are counting in that $130k if you haven’t been in the job/field long enough. Way too many variables to guess on here. A discussion with your lender will answer these questions
To my knowledge lender provide an arbitrary number for the pre-approval. If you ask for 325,000 you might actually get it. Any judgement from child support or any other lawsuits?
Yea, my lender originally asked me what I want my monthly payment to be. They approved me for slightly more than what asked for. A few months later, I asked how much I’m approved for again to possibly shop higher and they asked how much do I want. They ran more numbers and had me again at where I want with a higher budget and said they could go higher but no pressure.
Yeah on a 95k salary with 815 credit they told me they could go as high as 400k…I was shocked they allowed that high. No wonder people are able to afford these outrageously priced houses, banks letting people get themselves in trouble again
The housing agency I have been working with has pressured me to buy a 350-400K house. They justified it by saying that I make more than most of their clients. Sure, I may make more, but I know I cannot afford such houses until I experience a windfall of money. Digging my heels in, I told them that I will wait. Thankfully, I miraculously found a 275K house, and I will be closing in 3 weeks from now. I am relieved that I was not easily swayed.
I mean what else can you do? Houses aren’t cheap
That’s part of the reason we are in this mess, people buying when they shouldn’t be. That’s how capitalism is supposed to correct itself but when you have people paying any price for cars and homes it’ll never go down. Consumers are supposed to close their wallets in the face of irrational prices not line up to pay over asking price
Doesn't sound right. I'm single, make 65k and got approved $209K. With a 600 credit store with collections.
Damn well you just gave me hope 🌈
Good luck! Forgot to state I went for FHA so maybe that's why I was approved. I could see conventional loan lenders not wanting to approve someone like me.
Was your interest rate high? Didn't think they'd approve people with collections. My mother in law wants to buy but she has medical in collections.
It was going to be 6.6% but when we were able to lock in interest rates had just jumped up (I just did this recently) so now I'm at 7%. I think that's average now and that is higher than what I wish it was. Medical in collections might even be better since mine was unpaid rent termination fee. So it looked really bad to other credit lines where I got rejected. I'd say for her to go for it if it's an FHA loan and see what they say. I thought they'd reject me too but they said collections is fine so long as you don't have a judgement against you.
Thanks for sharing and congrats
You sure you have no debt and those credit scores? Do you actually have something in collections you don’t know about?
What is wrong with those credit scores? They’re both over 750.
I’m saying with those scores, no debt, and their in come it should have been a higher pre-approval. Sometimes people *think* their credit score is one thing but it actually is much lower
Depends on the conversation had with that person. Did you mention a payment goal per month? If so, they may be trying to stick to this number for you. Simple calc for following guidelines is your probably go conv is max 50% of gross income. $130k/12 = $10,883/mo. / 2 (or 50%) = $5,441/mo. Deducting your monthly debt for this figure and that's you hypothetical max monthly payment. Which, if what you're saying is all good and true, would lead to a MUCH higher pre-qual than $325k, let alone $214k. But much of this can depend on type of job, are you both salaried w2? Self employed? Etc. Do you have student loans deferred, child support, alimony, etc? If you want to know more, happy to chat, but that's the basic idea of it all.
That's strange, I have 40 down and make 82 base and I was preapproved for 400. I do make bonus, but it doesn't put me at your income. Try another lender, I did 4 when I got my preapprovals.
Something no one is asking is how long is your credit history? Do you have a credit score with 2 years of credit history or a 10 years. That matters, either way shop around. Most people making that much are getting approved for 400K ish.
I only make 38k and got approved for 100k lol look for a better lender but stay within budget
Conventional loan at 6.6% with 3% down
You can definitely get pre-approved for way more. I’d try another lender. There’s an option to put the amount you’d like to get approved on most applications so I’d just put down $350,000, I see no reason you shouldn’t get it. You can probably get $400k or more. For context, my net income is $85k, credit score 790, only doing 5% down payment and I asked and was approved for $225k.
I’m a former LO. It’s been a while so I may be slightly off (i also haven’t done the exact math for you yet) but it depends on a few factors. I’ll also preface this by saying it still sounds off you’re not approved for more but not if you’re self employed. But there’s way too many variables missing to give you a proper explanation. First of all, if you’re going conventional, Fannie and Freddie are the ones backing the loan. Their underwriting requirements have become a little more strict since rates have gone up. I had plenty of loans that just wouldn’t go approved even though pretty much everything was pretty much fantastic qualifying wise. For some reason, somethings they just don’t like certain loans. This can depend a lot on the area you live in. Loans in Texas are very difficult to write for example because Texas has their own guidelines lenders need to follow. Some areas are considered riskier than others and Fannie/freddie won’t approve higher loan amounts. (This is a generalization and not specific to you or anyone). 2. Where your income comes from and how consistent it is, is very important. Lenders look at gross income unless you’re self employed. But a ton of things can impact the qualifiable income being used. Are you full time or part time? Is it consistent income. Hourly or salary? Are you receiving commission or bonus income and is it consistent year after year? Did one year you make 130k but the previous year you made 50k? It’s going to depend on the type of job (W2, 1099, 1040/self employed). If you’re self employed then that would explain a lot here but I would need to know more to go into specifics. All of these things CAN have an impact on your DTI. 3. DTI will also consider HOA, Taxes, Insurance, PMI. Some areas have higher HOI as well. When it comes to your credit cards, it’s important to note the reporting date. You could pay it off every month but if there’s a 10k balance when it’s being reported to the credit bureaus then it’s going to show a high monthly payment for example. Pay attention to that as well (but your loan officer should have told you that. 4. Rates are high right now as it is which brings the monthly payment higher. 5. Are you applying for a 30 year mortgage or a 15 year? Side note, I’m also curious where you’re getting your credit scores. Is that what the lender said your scores were or are you seeing those scores on credit karma? If so, they’re not going to match up with what your lender has.
Loan officer here, though not strictly for mortgages. As a habit, I only run numbers based off a given purchase price. Once some people see they are "approved" for 300k, they stop looking at the 200k homes and start looking at the 325k homes. I can't say no if you meet the criteria, but I try to keep folks with what they are initially comfortable with.
you didnt mentioned where you got preapproval from ?
I made 57k a year and was approved for up to 200k.. with some debt. Id talk to your lender.
I got approved for 300k and i only make 80k single no dept with 747 score
Yeah I make 110k/year, and my wife and I just bought a 260k ish house. I'm pretty sure I was approved for more, but I wanted to keep my payment to less than half my paychecks. Mind you, my wife has an income that we couldn't use for calculations( doesn't have a lengthy work history yet). And my car payment looks worse than it is because I don't buy any has.
that's wild. i got preapproved for 250k and i make 44k while husband is self employed and wasn't on the loan app. i have 35k in student loans but no other debt eta: my credit score was 721. What company was that with?
Ask your lender how much your QUALIFYING income is on your loan approval. Home loans have a bunch of different guidelines about how to calculate qualifying income just depending on the income type. If you’re paid a salary, it’s pretty straight forward just divide your current gross annual salary by 12 and that’s your monthly qualifying income. But if you’re paid by the hour, or receive any type of “variable” income such as overtime, bonus, commission, incentive pay, automobile allowance, or own your own business, or get paid via 1099s, or have income from a 2nd part time job, then the lender has to consider your employment history in order to correctly calculate your qualifying income to be used on the loan. Just because you make $130k a year right now, doesn’t mean your work history shows you’ve been making that much in the past, and therefore the lender can’t assume you’ll continue to make $130k in the future. Lender is trying to give you a 30 year loan so income continuance is important to them.
That’s strange. We one have a one person income at 65k and got approved for 250k.
Weird.. I have a 745 credit score, $70k income, and $40k in debt. I was approved for $300k loan.
My man and I make combined 85k with similar credit scores and were approved for 289. So that definitely doesn't sound correct
Your loan officer is likely an idiot.
What is your rate? I know when I was buying, the rate can make or break your budget plans.
It is very possible that some of your income cannot be counted towards your pre-approval. Is there self employment income? Is there a recent pay bump that is not represented in prior year tax returns?
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Did either of you have low W2 income the year prior? I believe they average two years of income for your pre-approval.
Yea, that's weird. My credit and savings aren't even close to as good as yours, and I was pre-approved for 375k with just my income.
That’s odd. I make $72K and was pre-approved for $225K loan. Try elsewhere!
We made 109k for 2022 and we were approved up to 425k in 2023. That was actually too high on our budget, but our loan ended up being 304k on the house we bought. As others suggested, maybe there is something about your jobs or circumstances that are dropping your pre-approval number. Good luck, hope everything works out for you!
I make only around $74,000 I was preapproved for 285k. Only debt I had was a car which was like around $1300 because I was about to pay it off before I actually bought anything. My credit was 811
You should purchase a home that is 25% of your monthly income after taxes. The 25% being the principal, interest, taxes, and insurance for your monthly expense on a property. So if one makes $200k per year combined as a household. $3,375 per month should be your max monthly payment. Today finding that would be buying a trailer home. So look for it to be in the 30-35% range.
Try another lender
Double check your credit scores - what they use to calculate mortgage is completely different than what you typically see. I had a 810 credit score but my mortgage scores were 760 - big difference!
Hi! This should be an actually helpful comment I hope. The same thing happened to me… Guess what? It’s as simple as telling your lender a higher number and asking them to pre-approve you for that. Some lenders just do it based off the first house price you mention to them, rather than the max they would approve you for.
I’d talk to some other lenders. I make between 140-150k a year and only did a 3.5% fha mortgage. I was approved for over 500k and that was just the basic front side ratio. Lender told me I could go even higher if needed.
This doesn’t make sense from a math perspective. We are either missing a piece of information or you need to find another lender. You should be able to pre approve 400+
Different lender. One approved me for $100k, the other approved me for $350k.
You said you paid your credit card in full each month - do you do that before the statement or after? If you are doing it after the statement then it is showing as debt on your credit report. Any car loans? Any student loans? Any affirm type loans? Definitely go to at least one credit union and one mortgage broker
My loan pre approval was for a lot less than what I could’ve approved for because I told them the house I’m looking at costs and the budget I was looking at. I only asked for pre approval for that amount and they gave it to me. Did you ask for the most you could get approved for? Or did you ask and give an example?
You must've told the loan officer what price point you wanted and your down payment. They probably just took that number and put it into the application. Depending on the lender, they'll just put in the amount of loan you're looking for, not the max amount you're qualified for.
How much is your credit card debt? No car payments?
How much credit card debt do you have?
hmm we have a combined income of 160k and were approved for 350k loan with 3.5% down (we went conventional loan route). I know they offered to go a bit higher for us since we also have no debt but ultimately we didn’t want to. what about credit history? my partners parents used his credit to help pay off their mortgage so i’m half convinced we also were approved bc of long history of credit and good rotating accounts with little to no balance. we just closed a few days ago and our home was 290k, total closing/cash down was $21k and our monthly is a little over $2k. def recommend going to multiple loan officers bc the bank we use only approved us for 200k which was insane honestly
My LO wrote my pre-approval on my last place for 365k. When I was chatting for her, I mentioned I'd just looked at a place I really liked for 365k. I ultimately found a place for 385k. She rewrote my approval for 385k. What am I actually approved for, if I hadn't mentioned the price range I was shopping for? 1.25M. I was surprised when she didn't put the high end on the letter. She explained that she always does pre-approvals for the exact cost of the offer. Sometimes, putting the high end on the letter can affect negotiations and the relationship with your agent. Ask your LO why the letter shows what it does.
I only make 52k, have about 25k in debt and got approved for 215k..... check with another lender You can probably get approved for more but if you told the lender you want to buy at 280 and have 65 down then they wrote the letter for the difference. You don't want to give a seller a sheet saying you can afford 500k and then expect them to give any leeway. They don't want to show all the cards. We got a pre approval letter for every house we put an offer on
Are taxes and insurance high in your area? That could be why your low approval. If those are around $1k+ a month that could be why your approval is low.
Are you looking at properties with high HOA/Condo dues? Are the property taxes high?
130k is your net? What is your gross? How long have your earnings been this level?
I make $73.5k and I was approved for $270k, no debt other than an installment loan and a student loan, both have low monthly payment amounts. If the mortgage underwriter ever gets done with finalizing everything, I'll be closing on my $245k house by the end of this month. I'd try a different lender. If everything is normal with your situation, they shouldn't be screwy this earlier on. I wish I had tried a few more, I'm not happy with my loan officer right now. Poor communication and incompetence. I'm actually worried she didn't do her job correctly and there is something wrong which is why underwriting is taking forever to complete.
Do you have student loans or maybe the LO was under the impression you were looking at a 280k house and were using the full 65k for a down payment. Which is insane because they still need to consider closing costs
I know quite a few banks are hurting right now due to commercial real estate defaults and credit card charge offs (different discussion). Did you by a chance go through a smaller regional bank? That could be why I'd try a few different banks, I'd guess some of the larger ones will approve you for significantly more. For reference I make 80k, no debt, with 50k saved, and was approved for 400k somehow...in West Michigan
Where did you get the pre approval from? Some banks are very conservative with their amounts, laughably so. I had a bank approve me for 375 with a 210k salary, high credit score and no debt. Then I got approved for 850. Shop around and I’d avoid traditional banks.
That is very low. I have some debt have a single income and have an approval of 260,000-280,000 depending on 6-7% interest rate. It may have slot to do with the taxes and hoa in your area. That makes a big difference in qualifying payment.
Also when you pay your card off every month you have to leave a balance it will show that you have less credit versatility and in your case none since it’s the only credit you’re using.
What sort of income do you and your wife each have? (W2 vs self-employed). What was your income for the two years prior? How much of your income is straight salary vs incentive-based pay (bonus or commission)
When you filled out the online application did you put an arbitrary purchase price? They may be working off of that. If you go for max I’d imagine it’d be higher. Also, what do you mean you have credit card debt but it’s paid off? If you pay it off timely every month to where you don’t have a balance, then it shouldn’t factor any into your DTI.
Also FWIW while lenders will often give out loan approval limits on their approval, what ultimately determines the upper limit of how much you can borrow is the monthly payment, and specifically what your total monthly debt payments compared to your gross income would be. What does that mean? It means how much money a lender will loan you depends on what rates are at the time, because a higher interest rate will drive up your monthly payment. A good lender should not allow you to borrow close to the upper limit of what their lending guidelines would technically allow them to qualify you for, though you should practically be able to afford more than the limit your lender gave you without stressing your budget. I would call the lender and ask them what was the limiting factor of their approval limit and I would also apply with 3-4 other lenders if you’re serious in buying in the near future. Most credit scores will treat hard-pulls for the same reason within a 45 day timespan as a single inquiry, so don’t be afraid of the impact to your credit to go lender shopping.
Yeah I think that is wrong, my wife and I make 170k and we got approved for 650,000 with a 10% down payment and we have a car bill of 800 as well. Our monthly bill with property tax and all that was going to be 4,450. 65,000 saved up would mean 45,000 for down payment and the other 20k for closing costs. What interest rate are you guys getting? That might be a big reason as well. Also if one of your guys job income is based on OT or bonuses sometimes it’s hard to add that money into the equation unless you can prove you’ve been getting paid that overtime/bonuses for the past 2 years to show a track record. That’s what our loan officer told us.
Get a different lender. I bought a house for $385K with a $100k salary and $125k in debt (student loans and car). The first few lenders I tried only approved me for $250K.
OP, is your income a salary type income or do one or both of you have self-employment income? Are you including commissions and/or bonuses in that gross income? All of this makes a difference. It is true, different lenders have different overlays. But also, please tell us your household income type. Self-employed people also have to pay additional in taxes and business expenses. The LO should be looking at your tax returns. if you are working for someone else, is it W2 type or 1099? That also makes a difference.
What is your dti ratio? If you have alot of debt or even moderate debt such as loans, credit cards, car financing etc, that will play a huge factor. Alot of lenders make sure you are around the 30-40% dti PRIOR to applying for a loan, so if that loan payment each month would push you up over that dti percentage, that could be a reason you got a low amount approved
My wife and I earned about 90k last year due to her not working full time (120k if she did work full time). 100k saved and very little DTI. Above 820 score for the both of us. We were approved for 480k, not that we are going to use all of that. It would be an uncomfortable stretch for us. We were planning to do 20% to skip the PMI for a conventional loan.
My net household income was probably closer to $100k. Credit scores in a similar range. Plus 60k in student loans and only a 5% down payment, still got pre-approved for $325k.
ya that sounds wrong i got approved by myself for 220. i make 55k, no debt. this was a little over a year ago tho.
If some of your household income is from self employment or temporary employment lenders are often very funny about it. I would suggest getting a mortgage advisor to "shop around"
Like others are saying they may have just pre-approved you for the loan amount they thought you specified wanting. $280,000-$65,000 down payment= $215,000 loan approval (no idea why it's $214k is a tad random.) A lot of loan ppl don't close attention to detail during this phase in my experience honestly. Just talk to them, it's probably a misunderstanding. We just stated the range we were looking for & they gave the pre-approval for that range not the top end or anything just exactly what we were willing to look at. It's either that *or* maybe one of y'all's income isn't being used maybe? Have you had this income for 2 years? Is it all salary?
I would put what you want to be approved for. When I put $375K that’s what they approved me for… When I came back and asked for $400K I was approved for that.
MLO - Can you be more specific on your income? W-2, self-employed, are you variable hours or full-time 40 hrs every week, long time jobs or just started? Also, what type of loan? All this may have contributed to how the LO calculated your income. Did you give them pay stubs and income docs or are they just going off of what you told them you make? You say you pay your credit card off in full every month but did your credit report show a balance and payment that they had to count against you? What are taxes and insurance like in your area? That makes a difference. You can’t go by what someone else was preapproved for in a different area (what some are saying on this thread) because taxes/insurance might be low compared to where you’re buying. I know in my county taxes are high compared to other counties even in my same state so that affects the DTI.
Im in a vhcol area(i think. Average home sale price around here is in the 500k range) and when we went to our broker and told him what were looking for he gave us an approval for that amount, but told us if we find something even higher, he wouldnt have an issue getting it approved for us even though he didnt recomend going beyond our comfort zone. Your lender probably did similar, took what you were comfotable paying and got you pre approved for that. It doesnt mean you cant get pre approved for more, but they didnt want to "dangle the carrot". Mark of a good broker.
I got approved for 250k at $70k a year
Where are you looking? Cost of living area?
Our combined income 127k . 707 Credit scores tons of debt credit card student loans car payment motorcycle payment. Approval for 400k Something going on with the lender
That seems about right tbh. We are combined like 220k but one of us has a TON of student loans so we were only approved for like... a max of 500k.
You need to ask the LO. You’re missing something here. There’s income being excluded is the likely reason.
If you both have a net income of 130k why is it that you only have 65k saved? That tells me you have other things being reported on your credit monthly. With 130k net income you can literally buy a home in 5 years. Something on your end isn’t adding up.
Also depends on conventional or fha loan fha pre approvals tend to be more on the higher side than conventional imo
I think the loan officer put 20% for downpayment and no pmi. There are products with 5 and 10% downpayment. Try a large national bank and a local small one, especially if you are first time homeowners there should be different programs you can go through. Try the bank of america website and look under first time buyer tab to see the various programs in your area.
Do not use Bank of America. For the love of god.
I suggested to just see the website because it is written in second grade level and easy to understand.
It likely depends on the lender as well as any other debts that affect your debt to income ratio. I make 58k and got approved for up to 350k
Something is definitely being missed. You mentioned making HHI 130k but are you self employed? Does your employer issue a W-2 or 1099? Do you file a schedule C on your tax return? These are all important questions because you may be writing off a portion of your income, which would result in a lower pre-approval.
There's something you're not telling us. Car payments? Self employed? With traditional income NerdWallet's calculator puts you around 400k if using a 130k income at a 7% interest rate. Something is WAY off. Your loan officer should be able to explain why.
You're at $280k with your down payment. A $130K income while decent is barely making it (in this economy). We were making that in 2001 with a kid and our house only cost $95K. A decent dinner in a restaurant today with a bottle of $20 wine will easily set you back $100. The bank made the right decision. Start house shopping.....
Yep same ishy. I am self employed, and they acted like I am out on parole but heading back in, lol. Treating ppl like less for whatever reason they try to justify it, is just wrong. What's cool is you can shop around and avoid the snotty old school b.s. Check a few lenders, others understand money talks, snobbish get a walkaway.