This is almost the very first thing a new home buyer gets asked by their agent when starting on the journey to a new home. Some buyers get defensive about this, but this process will need to be done to ensure that the homes we are looking at are within the financial reach of our client.
Yesterday, my new first time home buyer clients called me to say they were preapproved and ready to go look at homes. We talked a bit and I found out that they were preapproved for what the husband asked for. When asked if they had any room above that price point they did not know.My suggestion is to let the loan officer do their work and preapprove you for what they can.
At that point I almost always suggest to my clients, particularly first time buyers, that we not shoot for the top of their approval number. When the buyers hear the max they are approved for, that is the time for them to decide how much of that they would like to spend. Don't tell the loan officer in advance what you want that number to be unless you have really worked the numbers.