You are a buyer and you are interested in putting in an offer on a property. A lender has already pre-approved you so you don’t feel it is necessary to put a condition in your offer on financing. Once you understand the approval process, you might change your mind.
There are two parts of the equation. The lender needs to approve you as an individual to see if they feel comfortable lending you the funds for a purchase and two, they will have to approve the property at your desired purchase price to see if they feel comfortable lending you the monies for that particular piece of real estate.
The lender will not stamp an approval on your paperwork until the appraiser has assessed the property location, resale potential, and determine the amount of equity the property has. They will then set your mortgage rate.
Recreational, rural speculative, or raw land could be turned down or could be offered at a higher rate. This is because the property might be harder to resell if the lender needs to get their monies out of the investment due to the purchaser defaulting on their mortgage. If you are purchasing a house or condominium in a well established community, it’s likely you will be able to get a more competitive interest rate as the property will have a higher target market and, in turn, have a better resale value.
You need to know that your rate can change and the funds the lender is willing to lend you could changing depending on the property you decide to purchase. That said, you should always have a financing condition in your offer to purchase.
Getting pre-approved ahead of time will help the transaction go a lot smoother but does not guarantee you any money for a piece of real estate.