Looking to purchase real estate in the Golden State? Join the club.

California is the most populated state in the country—so you’re in good company. However, you’re also up against fierce competition. Fortunately, there are a few tricks you can utilize to get ahead in this tricky market. Read on for three tips for affording a home in California!

#1 Choose Your Area Wisely

California isn’t exactly a small state. This means you have options when it comes to the area you live in—maybe even too many options.

Deciding on a single part of this great state can be intimidating. That’s why it’s crucial to understand the pros and cons of each region, particularly when it comes to real estate. Breaking down the entire state county-by-county could fill an entire article and then some, but here’s a general idea to help narrow down your decision:

• Northern California – Northern California can range from quiet coastal towns to the bustling life of the Bay Area. One thread that ties these neighborhoods together is their expensive real estate. Additionally, the weather in northern California tends to be colder and rainier than its southern counterpart—making home upkeep a bit more complicated (insulation, waterproofing, etc.). However, Northern California home buyers may be able to purchase larger plots of land than those down south (excluding San Francisco).
• Southern California – Southern California will bring the benefit of nice weather all year round. Mortgage rates in southern California typically lean toward the lower end of the spectrum—at least compared to its northern neighbor. Homes in this area often have only one floor unless you’re looking at mansions in Beverly Hills. The closer you get to Los Angeles, the more expensive the homes will get, and the same logic applies to wealthy beach neighborhoods, like Santa Monica and Malibu.

The bottom line: Choosing the right area for your budget can make a big difference in affordability. Try to avoid hot spots like San Francisco and Los Angeles if you’re looking for a nice home that won’t break the bank!

#2 Find a Mortgage That Works for You

Many homeowners believe they need to bend over backward to meet the needs of mortgage lenders—this simply isn’t true! Depending on your situation, there are several mortgage options to choose from that can better fit your financial needs:

• FHA loan – An FHA loan is a government-backed mortgage with low credit and down payment requirements. Income limits vary by county, but most areas have a cap upwards of $100,000 per year (and double that amount in Napa, Sonoma, and Orange counties).
• VA loan – California veteran loans can provide a significant leg up in the housing market. With no down payment required and low interest rates, affording an expensive California home may be more manageable with this mortgage option.
• USDA loan – If you’re looking to purchase land in rural areas of California, a USDA loan can help. Low interest rates and income requirements can help farmers and ranchers afford a home in areas like the Central and Salinas Valleys.

The bottom line: California homes are expensive, but the state offers plenty of mortgage options for buyers who need flexibility. See if you qualify for a government-backed loan before applying for a conventional mortgage.

#3 Get a Pre-Approval Letter

California real estate is competitive, and many buyers end up making larger offers than they can afford, in an attempt to beat out other candidates.

Don’t stress yourself out with a down payment that’s too high. Instead, opt for a pre-approval letter from your lender. A pre-approval letter is proof that your mortgage request has already been accepted. Providing this document to a seller will show that you’re serious about purchasing their home, and actually have the means to do so (without breaking the bank).

Soak Up the Sunshine in Your New Home

Purchasing a home in California won’t be easy, but it’s definitely worth it.

With these Cali-savvy tips, you’ll be on your way to homeownership in no time. Put in the work now and soak up the rays in your backyard later!