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Why would a lender approve you for more than you could possibly afford?

I’m in the process of getting my pre-approval and my lender said that I will be approved for a maximum of $320k. My annual gross income is about $43k and I was expecting to get approved for a lot less than that. Her reasoning is that there are not a lot of houses available for less than that amount in the city. But if I borrowed that amount, wouldn’t I be house poor? I mean I don’t even think I could afford the monthly payments because my monthly net income is only like $2400. Wouldn’t that be super risky for the lender? I don’t plan on borrowing that amount or anything close but I’m just curious why a lender would do something risky.

Edit: I see a lot of people trying to figure out or fix my situation. I’m not asking for help, I know what I can afford and I have already set up my budget. I don’t plan on using that amount at all but I’m just GENERALLY curious as to why lenders approve people for more money than they can afford.

submitted by /u/YouAreNotHelpful666
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source https://www.reddit.com/r/RealEstate/comments/sh1915/why_would_a_lender_approve_you_for_more_than_you/
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