Why Mortgage Pre-Approval Is So Important for Bay Area Home Buyers

We’ve talked about the benefits of mortgage pre-approval in previous articles and through our social media. Home loan pre-approval is a helpful step that can make the house-hunting process more efficient.

But here in the San Francisco Bay Area, mortgage pre-approval can be even more important.

Like it or not, we currently live in one of the most competitive real estate markets in the country. Home buyers must do everything they can to give themselves an advantage in the marketplace, and mortgage pre-approval is one of those steps.

Importance of Mortgage Pre-Approval in the Bay Area

Buying a home in California’s Bay Area region can be tricky, especially with the supply shortage we’ve been dealing with lately. In recent years, the number of buyers in the market has exceeded the supply of homes.

This kind of imbalance makes the housing market more competitive. That’s one of the reasons why home buyers can benefit from a Bay Are mortgage pre-approval. It can help you compete in a fast-moving real estate market.

Here’s a more complete list of mortgage pre-approval benefits:

• Being pre-approved can make sellers more inclined to accept your offer.
• A pre-approval letter shows sellers that you have your financing squared away.
• It can help you determine how much house you can afford to buy.
• Pre-approval allows you to target your home search to a specific price range.
• It can also give you a head start on your closing, to prevent unwanted delays.

In short: Getting pre-approved for a mortgage loan in the Bay Area could make you a more competitive buyer and streamline the closing process. And both of those are worthwhile pursuits!

How the Process Works

As a home buyer, you are not required to get pre-approved for a mortgage. But it’s a good idea to do so. We encourage all first-time buyers to get a pre-approval letter before starting the house-hunting process, and we’ve provided a helpful home buying checklist to guide you:

1. Starting this process is fairly easy. You would simply contact a mortgage lender or broker (like us!) and tell them you want to get pre-approved for a loan. You can initiate the process online, over the phone, or by email.
2. During the pre-approval process, the lender will review many aspects of your financial situation. They will likely check your credit score at this point. They will also request some financial documents. This may include your tax returns for the last couple of years, as well as proof of income and recent bank statements.
3. This is your opportunity to ask your lender any questions you have about your mortgage options. For instance, you can inquire about down-payment requirements, types of loans available, or how to lower your interest rate by paying points at closing.
4. If you want to expedite the process, you could start rounding up your financial documents in advance. (Or at least figure out how to obtain them.) Here’s a list of commonly requested documents for a Bay Area mortgage pre-approval.
5. The pre-approval helps you determine how much you can borrow for a home purchase. But it’s not the same as the final approval that comes later, prior to closing. In between these two steps, try to keep your financial situation as “stable” as possible. Try to avoid switching jobs and making major purchase, if at all possible. And keep those funds in the bank, so you can cover your down payment and closing costs.

Getting pre-approved will put you in a better position when it’s time to make an offer on a house. The seller will be more inclined to take your offer seriously, if you’ve been “vetted” by a mortgage lender. So it’s a critical item on any home-buying checklist.

Ready to Get Pre-Approved?

Bridgepoint Funding is your Bay Area mortgage company. We’ve been assisting home buyers and homeowners with their financing needs for nearly 20 years. Our broker-based model gives us access to a wide range of mortgage products and programs. This allows us to find the right loan for each individual client.

Please contact our staff if you’d like to get pre-approved for a home loan in the Bay Area. It’s a great way to begin your home-buying journey, and there’s no better time to start than now.