So, this week, after a large amount of paperwork, we were pre-approved for a mortgage.
We were pre-approved for $900K, which is an insane amount and not anything we would consider. We are looking at homes in the $500K price range.
A relative told me to have the mortgage company make the pre-approval letter for only $500K. She said if we went in with a letter for the full amount, we would lose negotiating power?
If this normally done? I can see it the other way, if we get a letter for only the exact amount of the house purchase, it might look like we are buying at the top of our range (given how the mortgage industry still seems to grossly overestimate people's buying power) and really stretching things.
What do you think?