Help me understand this (RE:Preapproval)

We were approved for a certain amount- but it includes a sellers concession. Say we were approved for $55,000 with a $15,000 sellers concession bringing the total to $70,000. What is the max we could bid on a house (assuming we were financing 100%- which I know isn't really possible)

This is all so confusing.

Message edited 5/12/2009 9:46:33 AM.

Re: Help me understand this (RE:Preapproval)

Not sure what a seller concession is but if you are pre-approver for a mortgage at let's say 205K that is all the bank will give you. So then add what you have to put as a down payment (for us it's 20K) so your total is 225K - that is all you can go up to to purchase a house because its your dp+mortgage = total of the house you can afford.

Now other things to factor in is closing costs = $10K is the average for a 225,000-240,000 home. Then you need to add the extra's such as engineer ($400), lawyer ($1,000), taxes for the rest of the year (depends) and one year's of homeowner's insurance( depends).

Re: Help me understand this (RE:Preapproval)

it means u can just take a loan for ur pre-approval...which in ur scenario is $55,000. the sellers concession is the closing costs. that has nothing to do with the cost of the home.