A pre-approval for a mortgage loan makes it much easier to look for a new home in California because it tells you how much you can borrow.
With a pre-approval letter for a California home loan, real estate agents are more likely to work with you and show you homes in the price range of your maximum mortgage. When a home mortgage loan is already pre-approved, sellers and listing agents take an offer more seriously.
A lot of first-time home buyers get "pre-qualified" and "pre-approved" mixed up. Pre-qualification is a casual process in which a potential buyer finds out how much they can borrow based on their income, how much debt they already have, and how much cash they can put down.
A pre-qualification letter could be a form letter or something more personal, but it will always have disclaimers to protect the lender in case the borrower doesn't meet the requirements. Some real estate agents think that pre-qualification letters don't say much more than that you contacted a California mortgage company. Before a lender will give the loan, they will need a formal loan application.
Pre-approval letters, on the other hand, are much more reliable and show the seller that the borrower passed the credit check and has preliminary loan approval. To get a pre-approval letter, you have to fill out a formal loan application and send in all the necessary paperwork. After making sure everything is true and checking the borrower's credit, the California mortgage lender agrees in writing to give the loan. The loan will depend on a satisfactory appraisal and title search of the property.
There could be a formal loan application process, so we suggest getting a loan pre-approval ahead of time. By doing this, you won't be disappointed by making offers that are too high or too low for you. Also, agents and sellers will be much more willing to work with you because they won't feel like their time is being wasted.
