Get Preapproved for a Mortgage — Especially if You Live in These Places

Mortgage Process, Mortgages, Studies
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It’s crushing when your offer on the house of your dreams is rejected. Perhaps you were outbid, but it’s also possible that you were competing against buyers who got preapproved for a mortgage, and you didn’t.

That’s why getting preapproval is crucial no matter where you live — you don’t know whom you’re competing with and what you’re up against. If you’re house-hunting in a hyper-competitive market where real estate inventory moves fast, getting preapproved is especially important to boost your chances of having a winning bid.

So where are some of the fastest-moving real estate markets? NerdWallet analyzed data from real estate website Zillow to see how long properties in 175 metro areas were listed for sale and the median age of inventory to find the markets with the fastest-selling homes. Then, we ranked those places based on the average of those data points. To see the rankings, click here.

What is mortgage preapproval?

Homebuyers have the option to seek prequalification or preapproval by a mortgage lender. Prequalification is a quick screening — the lender asks you for basic information, such as your income, assets, debt and possibly your credit history, then provides an estimate of how much house you can afford.

For preapproval, lenders review your credit score and verify your financial history to create a more detailed analysis of how much you could borrow. While preapproval doesn’t guarantee a mortgage, it’s an important step.

Why get preapproved?

If you and another buyer submit the same offer, sellers may be more likely to go with the preapproved buyer.

“It shows the seller that you are a serious buyer and that you have the ability to buy,” says Patrick Wallace, CEO and association executive of California’s Central Valley Association of Realtors. Preapproval matters even more in hot markets, where you can get an edge over buyers who didn’t take that extra step, he says.

Getting preapproved as soon as you start the homebuying process is invaluable, Justin Fichelson, star of Bravo’s “Million Dollar Listing San Francisco,” told NerdWallet.

“I’ve seen many instances where people are not preapproved and they find a house they like, and they miss out on the property, because the approval process does take a couple days,” he said.

Where preapproval has the most impact

Preapproval can be especially important for homebuyers in cities where houses sell quickly, because a fast-moving market is often a sign of high demand for a smaller supply of housing. Surprisingly, this can be true even in places where the economy is struggling, such as Stockton, California. Although Stockton is still battling a sluggish economy, our analysis found that homes in this city sell quickly — it’s the 11th-fastest-selling housing market nationwide and the fourth-fastest in California.

How is this possible? Wallace says communities in California’s Central Valley, including Stockton, were hit hard by the mortgage meltdown and bank foreclosures in the Great Recession. Investors swooped in and bought many of the foreclosed properties, and continue to hold onto them, Wallace says. Additionally, new development is limited. With a restricted supply, when a home goes up for sale in Stockton, it’s snatched off the market quickly. Preapproval can be important in low-inventory markets, even if the local economy isn’t stellar.

If you’re looking for a home in any of cities and surrounding metro areas in the table below, you could have a competitive edge by getting preapproved by a lender before you make an offer.

U.S. metro areas where preapproval may matter most

Place your cursor in the table and scroll to see data for 175 places.

RANKMETRO AREADAYS A HOUSE IS LISTED ON ZILLOWAGE OF HOUSING INVENTORY (IN DAYS)SCORE
1San Jose, CA43.929.936.9
2San Francisco, CA46.329.437.8
3Denver, CO55.945.850.8
4Greeley, CO59.847.853.8
5Dallas-Fort Worth, TX57.151.254.2
6Seattle, WA60.649.354.9
7Boulder, CO59.453.356.3
8Santa Cruz, CA65.148.756.9
9Austin, TX64.653.759.1
10Portland, OR64.754.859.7
11Stockton, CA76.345.861.0
12Sacramento, CA70.752.461.6
13Modesto, CA75.348.361.8
14Ventura, CA73.151.662.3
15Yuba City, CA77.248.562.8
16Fort Collins, CO64.561.362.9
17Reno, NV66.661.163.8
18Salt Lake City, UT79.750.365.0
19Fresno, CA79.950.365.1
20Fargo, ND78.053.865.9
21Provo, UT78.954.066.5
22Napa, CA73.459.866.6
23Honolulu, HI71.962.367.1
24Ogden, UT77.956.567.2
25Phoenix, AZ71.563.067.3
26Colorado Springs, CO77.757.867.7
27Santa Maria-Santa Barbara, CA75.761.768.7
28Omaha, NE76.960.668.7
29Nashville, TN81.456.669.0
30Anchorage, AK76.961.969.4
31Raleigh, NC76.962.269.5
32Houston, TX75.963.569.7
33Chico, CA79.361.870.5
34San Antonio, TX81.462.471.9
35Kennewick, WA77.966.872.4
36Visalia, CA89.056.672.8
37Boise City, ID76.869.072.9
38Boston, MA84.661.473.0
39Bakersfield, CA87.059.173.0
40Columbus, OH84.864.474.6
41Riverside, CA85.264.774.9
42Fernley, NV78.971.375.1
43Grand Rapids, MI86.065.075.5
44San Luis Obispo, CA85.666.676.1
45Wichita, KS89.264.476.8
46Washington, D.C.89.464.777.0
47Minneapolis-St Paul, MN94.759.877.2
48Manchester, NH88.568.178.3
49Pueblo, CO90.766.478.6
50Eugene, OR89.071.380.1
51Ann Arbor, MI94.867.381.0
52Kansas City, MO92.469.881.1
53Tampa, FL94.667.781.2
54Durham, NC89.972.581.2
55North Port-Sarasota-Bradenton, FL93.069.781.3
56Port St. Lucie, FL97.365.881.5
57Atlanta, GA93.370.181.7
58Orlando, FL97.867.582.6
59Springfield, IL92.673.382.9
60Detroit, MI101.464.983.2
61Des Moines, IA92.873.683.2
62Charlotte, NC95.770.883.3
63Memphis, TN97.469.683.5
64Richmond, VA94.572.783.6
65Truckee, CA92.874.783.7
66Miami-Fort Lauderdale, FL105.062.783.8
67Baton Rouge, LA98.970.684.7
68Waterloo, IA97.372.584.9
69St. Louis, MO90.580.585.5
70Albany, OR97.474.185.7
71Jacksonville, FL101.670.185.8
72Killeen, TX102.669.486.0
73Canton, OH97.376.787.0
74Sherman, TX90.786.388.5
75Rochester, NY113.564.388.9
76Tucson, AZ99.978.289.0
77Tallahassee, FL97.980.689.2
78Cincinnati, OH101.876.989.4
79Toledo, OH104.875.790.3
80Mount Vernon, WA86.694.090.3
81Indianapolis, IN107.273.690.4
82Buffalo, NY111.670.491.0
83Fayetteville, AR108.773.591.1
84New Orleans, LA105.876.891.3
85Milwaukee, WI109.374.691.9
86Albuquerque, NM102.381.892.0
87Charleston, SC101.983.392.6
88Lakeland, FL108.078.793.3
89Dayton, OH107.279.793.4
90Lexington, KY94.392.793.5
91Daytona Beach, FL108.278.893.5
92Yuma, AZ113.074.193.6
93Madera, CA108.179.493.7
94Jackson, MS107.980.694.2
95Ocala, FL112.576.094.3
96Flagstaff, AZ83.8105.294.5
97Vero Beach, FL111.577.694.6
98Madison, WI99.190.794.9
99Yakima, WA108.481.895.1
100Little Rock, AR113.577.695.5
101Chicago, IL115.676.195.9
102Clarksville, TN112.879.496.1
103Worcester, MA111.781.296.4
104Peoria, IL111.581.396.4
105Greenville, SC105.988.297.0
106Rockford, IL109.585.697.5
107Naples, FL113.182.097.5
108Clearlake, CA117.877.997.9
109Baltimore, MD116.379.497.9
110Lansing, MI114.682.098.3
111Gainesville, FL118.778.798.7
112Providence, RI114.583.398.9
113Lake Havasu City, AZ105.293.199.1
114Virginia Beach, VA107.291.899.5
115Sebring, FL116.083.599.8
116Monroe, MI104.395.9100.1
117Chattanooga, TN109.391.8100.6
118Springfield, MA114.787.1100.9
119Wilmington, NC119.683.3101.4
120Homosassa Springs, FL114.289.1101.6
121Cleveland, TN116.687.0101.8
122Philadelphia, PA120.683.0101.8
123Pensacola, FL115.490.0102.7
124Green Bay, WI114.990.7102.8
125Mobile, AL114.092.3103.2
126Burlington, NC122.385.6103.9
127Janesville, WI116.492.4104.4
128Panama City, FL117.192.3104.7
129South Bend, IN118.591.5105.0
130El Paso, TX122.289.0105.6
131Racine, WI128.083.3105.6
132Winston-Salem, NC124.287.3105.8
133Champaign-Urbana, IL115.596.4105.9
134Allentown, PA124.387.6106.0
135Greensboro, NC124.188.1106.1
136Oshkosh, WI121.392.3106.8
137Reading, PA118.296.4107.3
138Athens, GA119.895.5107.6
139Jacksonville, NC118.497.1107.7
140Concord, NH123.691.9107.8
141Trenton, NJ133.183.8108.5
142Columbia, SC121.595.5108.5
143Hartford, CT123.393.8108.6
144Kalamazoo, MI123.294.0108.6
145McAllen, TX140.477.5108.9
146New Haven, CT125.594.4110.0
147Battle Creek, MI136.585.0110.8
148Fayetteville, NC120.4103.3111.9
149Stamford, CT128.895.3112.0
150Daphne, AL120.3104.1112.2
151Roseburg, OR128.696.0112.3
152Tullahoma, TN128.997.1113.0
153Lawton, OK137.392.2114.7
154Holland, MI127.7104.6116.1
155Lynchburg, VA135.397.8116.6
156Cape Cod, MA130.9103.4117.2
157Hagerstown, MD133.8100.8117.3
158Sierra Vista, AZ122.9113.6118.2
159Erie, PA131.7106.7119.2
160Roanoke, VA126.7112.3119.5
161Myrtle Beach, SC138.4101.3119.9
162Hilton Head Island, SC133.0107.0120.0
163New York, NY157.183.0120.1
164Albany, NY145.895.0120.4
165Fort Smith, AR158.784.0121.4
166Cookeville, TN144.2101.4122.8
167New London, CT137.8109.7123.7
168Scranton, PA147.6108.8128.2
169Utica, NY156.0109.4132.7
170Binghamton, NY160.9106.8133.8
171Key West, FL147.6123.8135.7
172Morristown, TN141.8131.1136.5
173Torrington, CT155.3126.6140.9
174Atlantic City, NJ179.6112.9146.3
175Kingston, NY201.5121.8161.7

 

The states with the most metro areas in the list of 175 fastest-selling U.S. markets are California, Florida, North Carolina, Michigan, Texas and Tennessee. Here are the top five places in each of those states.

California metro areas where preapproval may matter most

Rank in CaliforniaMetro areaDays a house is listed on ZillowAge of housing inventory (in days)Score
1San Jose43.929.936.9
2San Francisco43.329.437.9
3Santa Cruz65.248.757
4Stockton76.345.861.1
5Sacramento70.752.461.6

Florida metro areas where preapproval may matter most

Rank in FloridaMetro areaDays a house is listed on ZillowAge of housing inventory (in days)Score
1Tampa94.667.781.2
2North Port-Sarasota-Bradenton9369.781.3
3Port St. Lucie97.365.881.6
4Orlando97.867.582.7
5Miami-Fort Lauderdale10562.783.9

North Carolina metro areas where preapproval may matter most

Rank in North CarolinaMetro areaDays a house is listed on ZillowAge of housing inventory (in days)Score
1Raleigh76.962.269.5
2Durham89.972.581.2
3Charlotte95.770.883.3
4Wilmington119.683.3101.4
5Burlington122.385.6103.9

Michigan metro areas where preapproval may matter most

Rank in MichiganMetro areaDays a house is listed on ZillowAge of housing inventory (in days)Score
1Grand Rapids866575.5
2Ann Arbor94.867.381.1
3Detroit101.464.983.2
4Lansing114.68298.3
5Monroe104.395.9100.1

Tennessee metro areas where preapproval may matter most

Rank in TennesseeMetro areaDays a house is listed on ZillowAge of housing inventory (in days)Score
1Nashville81.456.669
2Memphis97.469.683.5
3Clarksville112.879.496.1
4Chattanooga109.391.8100.6
5Cleveland116.687101.8

Texas metro areas where preapproval may matter most

Rank in TexasMetro areaDays a house is listed on ZillowAge of housing inventory (in days)Score
1Dallas-Fort Worth57.151.254.2
2Austin64.653.759.2
3Houston75.963.569.7
4San Antonio81.462.471.9
5Killeen102.669.486

 

What’s involved in the preapproval process

For preapproval, a lender takes a close look at your financial situation to determine your eligibility for a mortgage. In addition to pulling your credit report, a lender will likely expect you to provide the following information:

  • Social Security number and marital status.
  • Recent bank account and investment account statements.
  • Residential history, including landlord contact information if you’re a renter.
  • Total monthly expenses, including regular bills.
  • Assets (like stocks and retirement accounts) and liabilities (like student loans or credit card debt).
  • Employment information, including recent pay stubs and W-2 income tax forms.
  • Profit and loss statements if self-employed.
  • Real estate holdings.
  • Gift letters if a relative’s gift is helping cover your down payment.

Once you have the documents in order, NerdWallet can help you get preapproved with a lender in your area.

Methodology

NerdWallet analyzed Zillow data to see how long properties in 175 metro areas were listed for sale and the age of inventory to find the markets with the fastest-selling homes. We ranked the locations based on a score that averaged those two data points.

  1. Median days a house is listed on Zillow is the median number of days that sold homes were on the market in a given month, including foreclosure resales, for each month in 2015. This was calculated as an annual average.
  2. Age of inventory from Zillow is the median number of days all active listings have been current, calculated weekly, for each month in 2015. This was calculated as the annual average.

Emily Starbuck Crone is a staff writer at NerdWallet, a personal finance website. Email: emily.crone@nerdwallet.com. Twitter: @emstarbuck.