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When applying for a loan, can you simply ask for a pre-approval letter with an amount below the lender's actual limit, in order to avoid being pressured by RE agents into spending more money? Like if the lender is willing to go to $460K, can I just ask them to write $360K instead?
Yes, you can.
If the lender declines or pressures you, you just have the wrong lender.
Now...
A preapproval for the offer price amount is sometimes misconstrued as a buyer punching at the top of their weight class, and some sellers will react more favorably to a higher preapproval amount, assuming the buyers' resources make them more comfortable with the purchase.
When applying for a loan, can you simply ask for a pre-approval letter with an amount below the lender's actual limit, in order to avoid being pressured by RE agents into spending more money? Like if the lender is willing to go to $460K, can I just ask them to write $360K instead?
Yes. I did.
I had "Big Real Estate Company's" finance people pressuring me into buying more than I wanted. "You have a good salary! You can afford more!"
But I was already in my 50s and would be paying a mortgage in retirement. I wanted what I could afford on my projected pension.
Finally I went to a guy at a normal bank that someone recommended, and he said, "How much do you want your monthly payment to be?" I got a more realistic preapproval, and what I bought was $45k below it.
And I am glad because it was 2010, prices were still dropping, and they didn't go back up for a while.
I have never ever shown a client a house they didn't want to look at.
I have never tried to talk a client into seeing a house that is more than they want to pay.
If you have an agent who isn't respecting your budget or tries to talk you into places you don't want, speak clearly to him/her, and if that doesn't work, find another agent.
As a practical matter, we usually get approval letters for specific properties, with the offer date and the offer price on them. They seem more prepared and engaged than a generic letter written a month ago.
I have never ever shown a client a house they didn't want to look at.
I have never tried to talk a client into seeing a house that is more than they want to pay.
If you have an agent who isn't respecting your budget or tries to talk you into places you don't want, speak clearly to him/her, and if that doesn't work, find another agent.
As a practical matter, we usually get approval letters for specific properties, with the offer date and the offer price on them. They seem more prepared and engaged than a generic letter written a month ago.
I didn't think that the OP was talking about their own real estate agent, but rather the selling agent and/or a finance group connected to the selling agent's real estate company. My real estate agent certainly wasn't pushing me to buy what I didn't want. But, my real estate agent had nothing to do with how I was going to finance it. In fact, after talking to these Big RE Agency Finance People, I asked him if he had any ideas about where I could go to talk to someone about a mortgage, and he gave me the name of two bankers he had dealt with in the past. The first one I called made an appointment with me, LISTENED, and eventually that's where I got my mortgage.
Of course the finance arm of a real estate agency is going to want you to buy bigger.
ETA: I twice encountered these types when I went to open houses to scope out various townhouse complexes. My RE agent wasn't with me, but they had the finance people there and steered you to them. Because I knew absolutely nothing about mortgages, I sat down with them. It was a learning experience.
I didn't think that the OP was talking about their own real estate agent, but rather the selling agent and/or a finance group connected to the selling agent's real estate company. My real estate agent certainly wasn't pushing me to buy what I didn't want. But, my real estate agent had nothing to do with how I was going to finance it. In fact, after talking to these Big RE Agency Finance People, I asked him if he had any ideas about where I could go to talk to someone about a mortgage, and he gave me the name of two bankers he had dealt with in the past. The first one I called made an appointment with me, LISTENED, and eventually that's where I got my mortgage.
Of course the finance arm of a real estate agency is going to want you to buy bigger.
ETA: I twice encountered these types when I went to open houses to scope out various townhouse complexes. My RE agent wasn't with me, but they had the finance people there and steered you to them. Because I knew absolutely nothing about mortgages, I sat down with them. It was a learning experience.
Certainly, some agents will pressure their own clients to raise their price point.
It is shameful, but it happens.
And, I also believe the OP's question easily could have concerned an agent on the other side of the table.
"Mr. and Mrs. Seller, the preapproval is $90,000 higher than the offer price. You can probably squeeze more out of the buyers with a counter."
This is definitely a concern for some buyers.
Personally, I would not give a preapproval letter that revealed my full capability to buy.
1. Too much debt.
2. Too much revealed to the other side of the transaction.
I have never ever shown a client a house they didn't want to look at.
I have never tried to talk a client into seeing a house that is more than they want to pay.
If you have an agent who isn't respecting your budget or tries to talk you into places you don't want, speak clearly to him/her, and if that doesn't work, find another agent.
As a practical matter, we usually get approval letters for specific properties, with the offer date and the offer price on them. They seem more prepared and engaged than a generic letter written a month ago.
You may not have but there are plenty of agents who do. "Stretch price" and all, you know.
I insist borrowers call me so that I can match my letter to their offer. They do have a just-in-case letter, but it's rare I cannot get to a computer within a couple hours. Usually they know 24 hours in advance they are going to write, and by the time they decide what to offer, I am at my computer. There are some borrowers I've written a dozen letters over the past year on various properties, then borrower's caught in escalation, where I've written additional letters as highest and best is exhausted.
My letter states that a written loan commitment exists (if it does) and not once has anyone asked to see the loan commitment in lieu of my letter.
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