If you are considering buying a home for the first time, or it has been more than a few years, you may be wondering, “What are the steps to getting a San Diego Home Loan?”
Well, you are in luck because this article will detail step by step the process of obtaining San Diego Home Loans.
How Much Do I Qualify For?
The first step is to determine what purchase price and loan amount you can qualify up to.
The easiest way to do that is to contact a San Diego Mortgage Broker or lender who will run the numbers for you. Since you are already reading this post and have started your search, you can make it even easier on yourself by clicking Contact Us and I would be happy to assist you in calculating your numbers.
There will be three areas we will focus on. Your debt to income ratio, the assets available for the down payment and closing costs, and your credit score.
If you can have your pay stubs available, along with a list of monthly payment obligations, like car loans and credit card payments, and a total amount of assets you have, the process will go pretty quickly. If you happen to know your credit score, that is an added benefit.
If you are self employed, you will need to have 2 years of tax returns handy.
If you are not at the point of wanting to talk to a professional, and would like to try to calculate these numbers on your own, here are some resources you will need:
How do I determine my debt to income ratio?
How much of a down payment do I need?
How much money do I need for closing costs?
What San Diego Home Loan Program Works for Me?
Based on the above calculations of your debt to income ratio (DTI), available assets, and credit score, a San Diego Mortgage Broker can recommend which Home Loan Program would work best for you. Some loan programs are more lenient on higher DTI’s, lower down payments, and lower credit scores, then others.
Here are a few loan programs you may want to review:
San Diego FHA Loans
San Diego VA Loans
San Diego USDA Loans
San Diego Jumbo Loans
Getting Pre-Approved
At this point, if you have hesitated to contact a San Diego Mortgage Broker or lender, this will be the next step. Now that you have an idea of what you qualify for and the loan program that is right for you, you will want to get pre-approved before you start making offers on homes.
The pre-approval process includes filling out an application with all relevant information, providing the loan officer copies of your pay stubs and bank statements, tax returns if you are self-employed, and having a credit report run.
Your Broker will then run your file through either Fannie Mae’s or Freddie Mac’s automated underwriting system to see if your loan is pre-approved and what other documents need to be collected.
I am able to get pre-approvals done within 24 hours and if you would like to get pre-approved right now, you can either call me at 858-519-3935, or apply through a secure online application right below.
Once you are pre-approved, I offer a free pre-purchase consultation to discuss options, payments, and costs.
The benefits of becoming pre-approved versus just being pre-qualified are detailed in this article:
What’s the Difference Between being Pre-qualified and Pre-approved for a San Diego Home Loan?
Getting into a Purchase Contract
The next step after being pre-approved is to start looking at homes and getting an offer accepted. If you don’t have a San Diego Realtor yet, now is the time to contact one. I am happy to personally refer a quality Realtor to you who I have worked with in the past and I know will do a great job, just ask. If you already have a Realtor, great!
As you are submitting offers to purchase, the mortgage broker should be updating the pre-approval letters to make them specific to the property and purchase price offered. The letters should also be updated as interest rates fluctuate.
If your San Diego Mortgage Broker is not updating your pre-approval letters or keeping you updated to current rates, it may be time to make a switch. I am happy to accept your call!
Securing your interest rate
Once you have an offer accepted and you are opening escrow, an interest rate can be locked in. Locking in an interest rate means that you have secured a particular rate for a certain time period. The time periods are usually 15, 30, 45, or 60 days.
The longer the period of the lock, the more affect it could have on the rate or the cost of the rate. If rates go up during the lock period, you are protected.
San Diego Mortgage Rates can change on a weekly, daily, and at volatile times, an hourly basis. Make sure you are working with someone who understands what can affect rates and give you good advice on the right time to lock in a rate.
If you would like to get a Free Interest Rate Quote, Click HERE.
If you are shopping around for interest rates, you may want to read this article:
Shopping Around for the Best Home Loan? Let Us Teach You How!
Submitting My File to Underwriting
Once the offer is accepted, the official application and disclosures need to be signed. Also, any additional supporting documentation will need to be collected. This is when I usually will meet in person with the client to go over the closing costs and particulars of the transaction. We will also discuss current rates and our strategy on locking the rate. The appraisal will also be ordered at this time.
Once everything is collected, the file will be submitted into underwriting. The underwriter will review all the documents including how the income was calculated and the assets available. Usually, we will get a conditional loan approval which will state any additional documentation that the underwriter will want to see.
Once those items are collected they will be submitted and reviewed. If the underwriter is satisfied, we will get our final loan approval.
To learn about some of the most common underwriting challenges, read the article below:
Most Common Mortgage Underwriting Challenges
Closing Your Loan
After final loan approval is given, the closing docs can be ordered. An appointment with a notary will be set up and the documents will be signed by the client. The funds for the down payment and closing costs will need to be wired to the escrow company.
The loan will fund within 48 hours and then the note and deed will be recorded the following day. After the recording, escrow will be closed and you will now be the proud new owner!
I hope this article has been helpful in guiding you through the San Diego Home Loan process. I look forward to speaking with you if you are looking for a San Diego Mortgage Broker who puts customer service first.
