Getting Pre-Approved for a Mortgage in the CA Bay Area

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When you get pre-approved for a mortgage loan, you are essentially finding out how much money a particular lender is willing to lend you. The word "particular" is a key part of that last sentence, because Lender 'A' might be willing to give you more or less money than Lender 'B.' They all have slightly different underwriting and approval guidelines. This is why most prefer to use a Mortgage Broker as they can shop many lenders and do a lot of the work for you. Often thier services are free because the direct lender will pay the broker a fee for bringing a loan to the bank. There are many reasons to be pre-approved but you can read abou the Three Main Reasons Here.

Pre-approval goes a step further than pre-qualification, which is just a basic review of your finances. Through this process, a lender will review your finances in greater detail and will pre-approve you for a certain amount. Before we go any further (and before I confuse you with any more lingo), let's define each of these similar-sounding terms:

• Pre-qualification -- The process of determining how much a borrower (home buyer) can afford to borrow, based on a basic review of their finances. Gives you a general idea of what you can borrow. Generally does not require a formal mortgage application. Pre-qualification is non-binding, which means there is no guarantee you'll actually get approved for this amount.
• Pre-approval -- Similar to the pre-qualification process described above, but based on a more in-depth review of the borrower's financial history. Gives you a more accurate idea of how much you can borrow. Generally requires a mortgage application. This process takes place before you have selected a home, which distinguishes it from the final approval described below. Pre-qualification is non-binding. There are many reasons you should get pre-approved before buying a home. Most REALTORs in California won't waste time showing you properties unless you have the pre-approval letter in your hand! Learn about the ten reasons here.
• Approval -- This is the final approval by the mortgage lender. It takes place after you have chosen a home and made an offer. It usually requires a home appraisal as well.

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Until Next time Here is to your success! Jason Wheeler