Disappointed with preapproval

Heatherkins · ‎02-10-2015

Finally bit the bullet and submitted W2's, taxes, pay stubs, bank statements, 401K statements. Pre-approval came back to 225K which is much lower than we had calculated with the numbers we have for DTI. We haven't talked to the lender yet but, we're at a loss to why it is lower than we calculated.

Income: 43,933 + 39,000= 82933

Car: $421

Stu. loans: $422 and 9K in deffered loans

Credit cards: $100 or less in minimum payments

Down payment: We have 14K in bank, close to 4K in 401K hoping to take .25 and have lender paid closing

Does 225K seem about right for an FHA preapproval for us?

FICOs on here show 810, 733, and 831 for me.

His mid-score in October was 740ish.

Anonymous · ‎02-10-2015

I'd say its a low. We qualfied for 250k with similar numbers on income (89k) but a much lower credit score. Our income for 2014 will be 110k, but the preapproval was run on 2013 income.

Our car payment =528

CCs-combined= 250

motorcycle loan =300

No student loans (that was a loooooooong time ago)

Are you in a high tax state? If so that will reduce the amount of house you can buy. Taxes and insurance on my new build when completed won't be a combined 100 dollars per month, allowing me to purchase much more house than I otherwise could.

Heatherkins · ‎02-10-2015

Actually, we're in a super low tax state, Nevada. Property taxes on homes we look at range from 1600 to about 2000.

I have been trying to figure it out. My SO's W2 for 2013 was 25K as he was an intern. Last year it was 42K as a full time employee. Is it possible they averaged it rather than used his current salary?

@Anonymous wrote:
I'd say its a low. We qualfied for 250k with similar numbers on income (89k) but a much lower credit score. Our income for 2014 will be 110k, but the preapproval was run on 2013 income.

Our car payment =528
CCs-combined= 250
motorcycle loan =300
No student loans (that was a loooooooong time ago)

Are you in a high tax state? If so that will reduce the amount of house you can buy. Taxes and insurance on my new build when completed won't be a combined 100 dollars per month, allowing me to purchase much more house than I otherwise could.

Anonymous · ‎02-10-2015

Than taxes not the issue. Some states taxes are 1000 A MONTH, it was my first thought when you said they'd "only" go 200.

I'd check around, and quiz the lender how he came to that conclusion. It wouldn't hurt to shop a few more lenders.

Other factors coud be a short credit or work history.

Anonymous · ‎02-10-2015

Who did you use for prequal?

Heatherkins · ‎02-10-2015

I have another who said they'd be finalizing it tonight but, still no news as of almost 8pm. Thanks for the insight. I am just sad considering we'd like a bit more wiggle room.

I guess we'll see what lender 2 says and then go from there.

Heatherkins · ‎02-10-2015

Crosscountry Mortgage.

@Anonymous wrote:
Who did you use for prequal?

Anonymous · ‎02-10-2015

@Heatherkins wrote:
Crosscountry Mortgage.
@Anonymous wrote:
Who did you use for prequal?

Hmm... I dont know anything about them. I know big banks are sometimes a little more strict. Maybe shop around a bit and see if you can find another lender. We ended up using Peoples Mortgage for our last house purchase. They made the process so easy and we got the amount we needed.

Heatherkins · ‎02-10-2015

Thanks for the reccomendation

@Anonymous wrote:
@Heatherkins wrote:
Crosscountry Mortgage.
@Anonymous wrote:
Who did you use for prequal?

Hmm... I dont know anything about them. I know big banks are sometimes a little more strict. Maybe shop around a bit and see if you can find another lender. We ended up using Peoples Mortgage for our last house purchase. They made the process so easy and we got the amount we needed.

frugalQ · ‎02-10-2015

What is the lender's maximum back end DTI %age? That could be the reason. Although FHA and Fannie/Freddie DTI limits are high, some lenders require a more conservative DTI.