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Hole 07 · Front Nine — Get Ready

Buying Power

Buying power is your budget, credit, and down payment combined into one real number: what you can offer on a home today. This hole ties the first six holes together into a single working figure you can bring into a search, so every home you tour is already in range.

7 min read · Free, no signup

Written by Isaac Ortiz · Real Estate Broker · Compass | NWMLS #146754

Buying power is one number, not four separate ones

Buying power is the price you can actually offer today, built from four things you already worked out: your comfortable monthly payment, the rate your credit qualifies for, your down payment and any assistance, and your reserve cushion. Most buyers never combine them — they shop off one number and get surprised by the others.

  • Combines: comfortable payment, credit-driven rate, down payment plus assistance, and reserve.
  • It's narrower than what a lender says you're approved for.
  • Skipping this step is how buyers end up touring homes that were never really in range.

How the first six holes turn into your buying power

Start with your comfortable payment from Hole 1, then apply the rate your credit band unlocks from Hole 2. Layer in your down payment and any assistance from Holes 3 and 4, and confirm the loan type from Hole 5 fits your situation. What's left after that math is your real buying power — not your pre-approval ceiling.

  • Hole 1 payment + Hole 2 rate + Hole 3–4 down payment = your working number.
  • Hole 5's loan type changes what down payment and mortgage insurance actually cost you.
  • Hole 6's pre-approval verifies the number — it doesn't replace it.

Pre-approval is a ceiling; buying power is your real range

Your pre-approval letter shows the maximum a lender will fund. Your buying power is narrower — it's what you can offer while still hitting your comfortable payment, keeping a reserve, and staying inside the loan type you picked. Search at your buying power range, not your pre-approval ceiling, and you avoid stretch offers you'll regret.

  • Pre-approval: the lender's maximum. Buying power: your comfortable, reserve-protected number.
  • Shopping at your ceiling leaves no room for a bidding war or a rate move.
  • The gap between the two numbers is your real negotiating room.

Mastery check

Prove it out before you move on.

Caddie

Before you play through — quick read of the green:

3 quick questions. Get all but one right and this hole is marked played. Unlimited retries — there's no penalty for missing one.

Question 1 of 3

What does "buying power" actually combine?

Question 2 of 3

Why shouldn't you shop at your full pre-approval ceiling?

Question 3 of 3

Why run your numbers through a tool like the Buyer Command Center before touring?

Still stuck? Ask the Caddie.

Hole 6: Pre-ApprovalHole 8: Agents & Representation