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Late last year, roughly October/November 2014, I started looking into buying a house here in Phoenix. I was pre-approved for 180K, with the loan officer saying with a couple minor financial changes that 200K wouldn't be a problem. Which is all fine and dandy, except that I don't want to spend that much. Based on the formulas, 180K is well within my "affordable" range, but it doesn't fit into my personal budgeting and savings plan. I had placed a personal limit of 150K, and preferring to be below 130K.
I had found a couple properties I really liked at around 80K, which is actually less than half of my pre-approved amount. I had asked the loan officer if I could take a mortgage that low, assuming the bank approved the property, and while he didn't say no to it, he didn't exactly say yes either, and kept wanting to "run the numbers" to show how I could get a lot more house, as if he thought I made the assumption I couldn't borrow more than the 80K and wanted to convince me otherwise.
I also found with talking to a few realtors that telling them what my max preapproval came in at, was almost a mistake, as they all wanted to focus on 180K-200K properties. Along with a few other issues (some not at all related to this), I got so frustrated with the whole thing that I just put the brakes on buying a house altogether for a while.
Now that my personal situation has calmed down, I'm ready to get back in focus on this. Now, I realize the loan officers and realtors work on commission, thus they have a vested interest in selling me as big as possible, and I don't fault them for that, nor am I seeing them as "greedy bastards!". But on the other hand...is buying on the lower end of the market like this going to be a huge hassle, or is it just a matter of finding the right financial institution and realtor?
A loan under $100K can be tricky to get, or so I've heard. Not impossible though. Try a credit union.
That's part of the problem I've had too - that I've "heard of", or "read about on the Internet", a lot of things...little of which I've been able to confirm one way or the other though, which is a large part of what led to my prior frustration.
If the local market is $80k, the local lenders shouldn't have a problem. As far as qualifying, the loan officer will with tell you the most you can qualify for. What is they other option, to prequalify you for only 1/2 of what you technically can qualify you for? If you want to spend less they'll adjust the Prequal letter accordingly.
Both real estate agent and loan officers depend on referrals for future business. To get someone to over spend and have an unhappy buyer with the transaction reduces their chances of a referral. They don't treat people as "one and done", they would not survive for long.
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