Pre Approval amount vs Purchase Price

Monday, August 27, 2018   /   by Rachael Dicioccio

Pre Approval amount vs Purchase Price

With the popularity of home buyer "reality" TV, many misconceptions about the home buying process trickle from mainstream media to the average buyer. Sometimes, this can be great news; a client finds out they only need 3% down to purchase a home...sometimes, with some loans NO down payment money is needed!! Not the preconceived 20%. On the other hand, buyers can be in for a big shock when they find out something like the amount the bank has pre approved them for is not the amount of money they will get regardless of the purchase price. 
Put in a simple example: Susie HomeShopper is Pre Approved for $275k. In searching for a house with her favorite Rachael the Realtor, she falls in love with a house and puts an offer in at $249k. The offer is accepted. She does not at closing get a check for $26k to help with repairs, or furniture, or anything of the sort. No, she just has a smaller monthly payment to the mortgage company than she would have if she bought a house for $275. 
While there are loans out there specific for remodel funds or "cashback" at closing, these have very specific requirements and you should have long talks with your lender until you are sure you understand them. 
Instead, a pre approval amount is a possible amount that your lender COULD approve you for. However, you do not have to go to this amount. Many people, prefer to stay under it and make sure their monthly payment is more manageable. 
We know this "home buying stuff" can be scary, stressful, and overwhelming. Allow this Realtor to be your calm, knowledgeable guide through the process. I am here to answer any questions you might have... I promise I will do so way better than reality tv. 
Ken Brownlee Real Estate Team | Keller Williams
Ken Brownlee
15268 Fishhawk Blvd
Lithia, FL 33547

© 2019 My Florida Regional Multiple Listing Service, Inc.. All rights reserved. The data relating to real estate displayed on this website comes in part from the Internet Data Exchange (IDX) Program of My Florida Regional Multiple Listing Service, Inc. All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independently verified. Listing information is provided for consumers' personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law.2/21/2019 3:20 AM CST
;