I got my pre-approval for my mortgage. I was approved for 150% of what I want to spend. That’s crazy! No wonder people get into such a mess with their mortgages. I don’t even know how I could afford that much. I used a mortgage calculator, and with a 20% downpayment, I would still have very little money left every month after paying the rent.
Of course, I guess once I buy a place, I will have to change my tax withholdings again. They’re already high, and I’m expecting to get a bunch back this year (I should really change that) and I’ll have a tax break with the mortgage payments too.
But I digress. 150% of my max! Insane! What are these companies thinking? That said, I’m smart. I’m sticking to my max. Actually, I’m willing to go up an additional $15K, but I’m keeping that to myself and not mentioning it to my agent – I know she’ll push the limits, and I’d like to have that in my pocket if the perfect place shows up. But if I tell her I’ve got that window, then suddenly she’ll push beyond that. I’ve heard good things about this particular agent, and I’m hoping that she doesn’t go crazy, what with me getting approved of so much money that I’m completely not prepared to spend.
Megan is a 30-something government employee in the Washington, DC area. She got interested in Personal Finance when she got out of college and realized that her paycheck wasn’t going to go as far as she had hoped. Since starting this blog, she has managed to buy a house and make a solid start on her retirement goals, and hopes to help others do the same. Here is her story:
In 2007, I was a gainfully employed 20-something with no debt but not a lot of knowledge about personal finance. It was a co-worker’s comment about Roth IRAs that sent me to the internet, searching for information. It was then that I realized that I really didn’t know a whole lot about personal finance and that my current financial situation was due a lot to inherent frugal tendencies, generous family members, a fear of debt, and good luck. While that was working for me, clearly I needed a better plan.
While I had no debt, I was also pretty much living paycheck to paycheck and not worrying about going over budget (I say this as if I had a real budget) because I had an emergency fund set aside to cover any overages.
Except that’s not what an emergency fund is for.
So I did a lot of research, read a lot of blogs, and decided that I needed a plan. I needed to budget. I needed to know what I was spending my money on. I needed to prepare for the future.
I decided to create a blog not only to make myself accountable to others but also to share the knowledge that I gained along the way. I’ve learned so much from my fellow bloggers, and I hope that my readers can find something useful in what I have to share as well.
It is great that you are not buying into the debt myth! Good for you!
Congrats on having such good credit and being wise about it, especially with your agent! But whoa 150% that is crazy. No chance you’d get that here in the UK, especially not for a first time buyer! Congrats also on managing to save a 20% deposit – not an easy task no matter the price of the house you buY!
Great job setting an “internal” maximum…in spite of already owning a home that I love and that will do for the next decade or two, I’m a little addicted to the real estate programs House Hunters & Property Virgins. Both typically show house-shoppers going WAY over their internal maximum, faciliated by the eager agents. Makes me crazy * also that the Property Virgins hardly EVER have a downpayment more than 5%…
When I started looking at getting preapproved a couple years ago, right around when everything fell apart and all the rules changed, supposedly tightening up credit – my mortgage broker would not even TELL me how much of a loan I actually qualified for – I had told her what range I was comfortable with, and she just said “yeah, no worries”
From what she indicated, I would have qualified for a loan probably 2-2.5 times what I actually was comfortable with – but she knew I am extremely conservative and we didn’t even bring up those figures with my real estate agent 😀
Congratulations on your pre-approval. So wise of you not to take advantage of the full amount offered.