What San Diego Buyers Need to Know About a Pre-Approval Letter

If you have been doing your research before buying aSan Diego house then you are most likely aware of the importance of having a pre-approval letter. But you might be asking exactly what a pre-approval letter is and do you really need it?

The quick answer is yes, San Diego buyers should take the time to receive a pre-approval letter. It can play a key role in convincing a seller to choose your offer over another when you are trying to buy a house. Keep reading to learn more below.

What is a pre-approval letter?

A pre-approval letter is something that you get from your mortgage lender. It states that the lender is agreeing to provide you with a specified amount of money for a mortgage if your situation remains the same as it was when you received your letter.

Before the lender gives you the letter they will go through a lot of the work they would if you were straight out applying for a mortgage loan. They will need to see your proof of income, check your credit score, along with checking your assets. This information will help them to see if you are a safe bet to loan money to. If they decide you are, they will give you a pre-approval letter.

Why do you need a pre-approval letter?

You don’t technically have to have a pre-approval letter in order to buy a San Diego house, but it’s going to help in the process. One reason is that real estate agents prefer to show houses to qualified buyers. They don’t want to waste their time or the time of their seller with a buyer that can’t actually get financed to buy the house.

Sellers also like to receive offers from San Diego buyers that have a pre-approval letter. This is because it is a signal that the buyer has been vetted and it is more likely that their financing will go through.

Another reason to go through the pre-approval process is that it will let you know what kind of budget you should be setting for a San Diego house. The last thing you want is to fall in love with the perfect house only to find out that you can’t get the financing that you need in order to buy it.

Does a pre-approval letter mean that you are approved?

A pre-approval letter means that you have are likely to be approved. However, if you get a pre-approval letter and then stop making payments on a loan or run out and take out another loan it could change everything.

Getting pre-approved doesn’t automatically mean that you will be approved in the end. It just means that if your financial situation stays where it is, you are likely to be approved.

Getting pre-approved can also help to speed up the process when you have put in an offer on a house. If you keep your lender up to date with your financial information while you are searching for a San Diego house it will make it faster to go through the actual approval process once a seller has accepted your offer.

If you are ready to start your home search take time first to speak with a mortgage lender. Taking the time to do this will make the rest of your process much smoother.