I posted down the board that I got my prequal but I learned something today...

[Anonymous]

I had three appointments to discuss prequalifications. If I had to take a day off work, I was going to make it worth it.

Place #1 - A broker - Prequaled a USDA for 175,000 through Chase using 5.5% interest

Place #2 - A bank - Prequaled a USDA for 160,000 through PFHA (state provider) using 6.0% (wouldn't use 5.5 so I could compare)

Place #3 - A broker - Prequaled a USDA for 168,000 through Wells Fargo using 5.5%

All three used same income and debts, potential taxes and insurance. I asked each of them what ratios they were using to compute. The back end ratio went between 38%-42%.. All The piti paymenet for place #1 was still very much within my budget.

The PITI payment  for place #1 is well within my reach.

It pays to ask questions and shop around.

[ronq]

I don't want to spoil your mood since that is great news, but remember that there are other expenses that go with home ownership. Just moving in can be expensive, house may or may not have appliances. Usually it may have an oven and dishwasher, but usually doesn't have a frig or washer and dryer. Sellers sometimes leave them, but if they do they are usually old and not worth moving or they say they are negotiable. Blinds/window covers aren't cheap either. You also have outside stuff like lawn mower, trimmer, and snow blower (if up north). Maintenance is also your responsibility for whatever breaks. I like to allow $200 a month at least for stuff, assuming that you have some time before a major repair is required (i.e. furnace, roof, water heater). I just a home and I spent a little over half of my qualified amount (close 3/16). A big reason for that is taxes in NY state account for $400 of my PITI and since I know those will never go anywhere but up I wanted some room. I only spent 160k for my house even though I qualified for 304k with 10% down. My PITI is $1232 and I have very little other debt. I might just be cheap, but you don't want to have a house payment that makes it impossible to do anything else. Just remember you will enjoy homeownership more if it doesn't cause financial stress.

[Anonymous]

Thank you for the advice but I am more than aware of what you said. I do not intend to be house rich and money poor. I curently rent a townhouse that came with nothing and I have all of my own appliances that are brand new, adequate furnishings (until I get in and get my 8,000 from uncle sam back and want to decorate). I will also finish with 10,000 in the bank AFTER closing as reserves. I am not depleting my accounts to buy a house. That is what got some people in the mess they are in to begin with. Oh....and I am looking in the 160,000 range and don't intend to max out the pre qualified. I was just remarking at how three different lenders pre qualed three different amounts.

[ronq]

that's good, I didn't mean to sound like I was telling you that you don't know what you are doing or anything. I was just trying to give very conservative advice. don't be scared to make a lowball offer if you find a house that has been on the market a while. The market here never boomed so it didn't decline much. It only appreciated modestly over the last 5 years. I offered 20k below asking since the house was on the market a while and I found out the seller's built a new home. The paint scheme is horrible and the pictures made it look worse, but it's 2200 square feet and all tile and hardwood floors so I guess I will have to paint. We ended up 15k below asking and the only thing that needs updating is the roof since it is 15 years old. I am using my tax rebate (only 4,400) for the roof this year just to get it out of the way with free money. You may or may not get 3% from the seller, but try for everything you can get. Especially look at empty houses because those may have sellers more willing to bargain.