conversation: User (alphasquid): "I currently own a home, and we're thinking at looking at a couple of houses, but aren't necessarily in the market to buy one just yet.  If we find something really good for us, we'd move on it, but there's not a lot of pressure to move out of our current home.\n\nMy aunt, a realtor, is telling us we need to get preapproved for a loan before we can start looking."
  Self: "There is a tendency for pre-approvals to be much higher than what you can actually afford. Be realistic to what fits into your budget. Just because you are "approved" for a loan amount does not mean you can afford that loan amount. \n\nOne of the benefits of being pre approved is that it shows the seller that you are a viable buyer. It also gives you an idea of what it actually costs to purchase a home. Take into consideration property taxes, school taxes, closing costs, mortgage insurance if you aren't putting 20% down, etc.  During the process of purchasing our first home, I was very surprised at how much money in addition to the down payment we actually needed. "
  