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Hi Everyone!
First time poster, long time lurker.
I've read tons of great info on here and now in the process of starting a journey of my own.
My wife and I are looking to buying our first home.
We initially pre-qualified with Shea Mortgage, as they are also the builders of the homes.
My mother also co-signed with us. My wife and I gross $75600 a year and my mother brings in $17580 a year from a death benefit.
Our initial pre-qual came in at $430,000 with Shea Mortgage, however, this was including $22,000 of credit card debt from my wife and I and a $30,000 car payment. My mother does not have any bills.
We did a lot selection for their 3rd phase of the community and the price of the home we are looking at is $447,000. We gave our $5,000 deposit and will sign contract tomorrow.
We are now only in debt for $10,000 on CCs and the car is $25,000. The home wont be completed until April/May and we should have the rest of the CC debt paid off by December.
Should I be worried that our inital pre-qual came in lower than the house? We are not sure if we are going to use Shea Mortgage as they do not work with downpayment/closing cost assistance. We are still ways away from completing a full application, but we want to make sure all of the financials are in order.
Yes, you should be worried - unless you have the cash to pay the difference between the amount of mortgage for which you are approved and the ultimate sales contract price.
The mortgage qualification is for a $$ amount of your mortgage. You can spend as much as you like, but you have to pay the difference between the mortgage amount and the contract price.
If you have the savings, then no issues. But I would still shop for an alternate mortgage co to compare programs and costs. JMO
Thank you for the reply!
I thought so as well.
I'm just curious, because the original pre-qual was when we had debt. When we go for the pre-approval, we should only have the car payment.
We will continue to work on saving!