Making an offer? No tactic speaks louder than a PRE-APPROVAL letter
Pre-Approved! The Home Buyer’s Gold Standard
The number one strategy for success in home buying is actually a tactic: the PRE-APPROVAL letter from a lending institution.
It’s standard practice at CALIFORNIA MORTGAGE ADVISORS, INC. to arm our clients with a pre-approval letter. We’re not saying “pre-qualified.” Pre-approval is much stronger because it’s a more in depth analysis of a borrower’s credit, asset and income. Our in-house underwriters review the information and issue the pre-approval. Are you ready to get started? You can apply here online or call (800) 927-6560 to speak with one of our Mortgage Advisors.
Pre-approval certifies the buyer’s financial qualification for a mortgage. The next step, of course, is approval of the collateral (the property) behind the mortgage.
Clients who earn a pre-approval letter are better positioned when they extend an offer. Looking at side-by-side offers, sellers respond most favorably when the buyer does not include a financing contingency in the contract. Pre-approval is virtually the next best thing to an all cash offer!
Think about it from the perspective of a seller. You hold two nearly identical offers in hand. One includes a clause requiring a 21-day period for the buyer to secure financing. If the buyer fails, the contract is null and void. No deal and 21 days wasted.
The other offer trumpets the buyer’s pre-approval with a short loan contingency (just enough time to obtain an appraisal). It’s a solid deal on its face. Even if the contingent offer was for more money, pre-approval often works as a bird-in-the-hand. Cash is king.
“Pre-qualified” is an educated guess by a loan officer (no promise or contract involved) that a buyer probably has the ability to secure a mortgage loan commitment from a lending institution. It’s based on the buyer’s financial health including income, assets and debt. It may involve credit verification. But no mortgage application has been made.
Pre-approved says the buyer has submitted an application including documentation (recent tax return, proof of employment, etc.) and the buyer’s creditworthiness has been approved for a specific loan amount.
Following contract acceptance, the usual property appraisal and preliminary title report seal the deal with the lender when they support the offered price and the seller’s freedom to sell.
Would you like to get pre-approved? Easily done and we strongly suggest doing it before you begin shopping for a home. In other words, pick your financial partner – your mortgage banker – first. CALIFORNIA MORTGAGE ADVISORS, INC. invites you to contact one of our Mortgage Advisors. We’ll listen to your needs, gather information, perform due diligence on income, credit and employment history, ask the right questions about your preferences and provide clear guidance on affordability. You’ll receive a Pre-Approval letter from our office. Click here and we’ll get started.
After you are Pre-Approved
Typical clients then select a real estate agent. We can help with this, too, by providing a list of top agents known to be active and effective in the areas where you plan to concentrate your home or condo search.
We encourage clients to select an agent using the same level of care as the mortgage banker. Just as you’ve done with us, you’ll interview agents to determine compatibility and sensitivity to your needs. Absent an agent, even if you decide to initially visit open homes to get a sense of what’s available, your Pre-Approval letter is your ally. If you fall in love with a property and wish to move forward to beat out others in a hot market, that letter can make all the difference.
Let’s get the pre-approval ball rolling. At California Mortgage Advisors Inc., we genuinely believe that we offer our customers the best mortgages in the industry. We have offered a variety of loans since 1993, which means our Mortgage Advisors have successfully matched tens of thousands of borrowers with loans tailored to meet their needs and unique financial situations. Our Mortgage Advisors are available at (800) 927-6560 to answer your questions or you can apply here online.