Mortgage question.. pre approved amount vs interest rate?

Question

I was recently approved for an FHA loan. The terms were 6.75% apr for up $130,000.

Im interested in a property where the builder is offering a rate of 5.5%. Will my pre approved amount ($130,000) go up or stay the same at 5.5%??

Answer 1

Since the loan will be through the builder instead of the lender who pre-approved you then the builder will have to qualify you and see how much they will approve you for.  It will probably be more than the $130,000.  Be sure and look at the other terms of the loan and compare everything, not just interest rates.  For instance, does either loan have points?  1 point is 1% of the loan amount.  So if you borrow $130,000 and there is 1 point then you have to pay $1300 at closing plus your other closing costs.  Some loans offer a lower APR but charge points in order to do it.  Also, see if there is an origination fee or brokers fee, etc.  Ask both places how much they expect the closing costs to be.  Will the down payment amounts be the same?  Make sure the 5.5% is a fixed rate and there's no balloon payment in the future.  Check everything and not just the APR.

Answer 2

up some not much