Once you have received a pre-approval from your San Diego Mortgage Broker, you might be wondering what happens next.
The steps you follow afterward are fairly straightforward and I am going to walk you through the entire process from start to finish.
If you haven’t already been pre-approved and are a looking for a San Diego Home Loan, whether it is a Jumbo Loan, conforming loan, or VA Loan, then you can start the process by clicking HERE. If you need more information or have questions, call me at 619 – 312 – 0612.
Find an Experienced Realtor
You will want to start your house hunting and the best way to find your dream home is with the valuable help of a San Diego real estate agent. If you don’t have an agent yet, you need to find a qualified one. An agent will save you a lot of unnecessary leg work and can focus on a purchase price that works with the loan amount for which you were pre-approved.
However, you don’t just want any Realtor, because to be successful, you will want a Realtor who is experienced and understands the local market or neighborhood where you are most interested in buying a home. You also need a Realtor who specializes in the type of home you are most interested in buying such as a single family home, a condo, or you might need one who specializes in foreclosures/short sales, or luxury homes.
If you’re not sure where to start your search, I can tell you that as a Mortgage Broker, I work with Realtors on a daily basis. This has given me an excellent opportunity to develop some great working relationships with quality Realtors which I have come to trust and who I know will do a great job for their clients. Please give me a call if you would like a referral.
Start Looking at Properties
Once your Realtor understands your needs, they will begin researching properties in your price range, the type of home you want, and the neighborhoods where you want to buy. They will understand your special requirements such as locations near schools, shopping, public transportation or any other specific needs you want in a home.
They will then show you the listed homes and you can then select the ones you want to view. They will set a viewing appointment at your convenience and then provide you with a guided tour through the home so you will fully understand the features and provide any disclosure about any drawbacks about the home.
Making an Offer and Negotiation
Once you have found that perfect San Diego home, your next step is to make an offer on the home.
If you haven’t done this before, you should discuss the procedure with your Realtor to understand the terms of the contract and what wiggle room, if any that you might have for any negotiations which follow. You also are constrained by the amount of the Home Loan that you have already been pre-approved for.
If the home requires some repairs or renovations, this may allow you to make a lower offer than the market.
Otherwise, making an offer substantially lower than the asking price should be approached cautiously so you do not miss out and lose your chance at a successful offer.
If you do put in an offer that is lower than for what the home is being listed, you are likely to receive a counter-offer from the owner.
Having Your Offer Accepted and Opening Escrow
If you’re not familiar with what escrow means, it simply refers to the deposit of funds and handling of documents by an escrow holder which is usually an escrow or title office, and must be licensed under California law.
Both buyer and seller must approve the same escrow officer which both parties will use. In most instances, the Listing Agent will write a particular Escrow company into the contract, which will be accepted by the buyer.
The escrow company will hold the earnest money deposit, prepare escrow instructions, and handle all the contract documents. Once all the provisions of the transaction have been fulfilled, they will handle the funding of the loan and disbursements to the parties involved allowing title to be transferred to you, the new owner.
Other steps involved in the process include a title search of the property which will be presented to the buyer. As the buyer you will want a provision for the home to inspected and to purchase title insurance which is usually completed when escrow is about to be closed. This is usually included in the purchase agreement.
Signing the San Diego Mortgage Loan Application
Although you have been pre-approved for a San Diego Home Loan, you now have to officially apply for the loan itself. If have already gone through the pre-approval process with a mortgage broker such as myself, then you would need to contact me to arrange to come in and complete and sign the application and prepare any additional documentation.
When we meet, I would also obtain additional information as it relates to the home itself, and to the escrow provisions, which I will pass onto the lender. The application will then be sent to the lender for review and approval.
Locking in Your Interest Rate
A mortgage loan lock refers to a promise made by a lender that they will hold a specific interest rate for a specified period of time. You can set the lock at the time of your application or wait until it is approved.
Most locked in rates are generally good for around 30 days but some lenders may offer time variations ranging from 15 to 60 days. The lock in period will depend on the length of your escrow.
Most lenders charge additional fees to lock in rates for over 30 days, which might be either up front or payable at settlement. The fees charged are flat fees and are non-refundable, and are generally based on a certain percentage of the mortgage amount.
Should rates fall during the lock in period, many lenders have an included “float down” provision in the original lock. This “float down” can only occur under certain conditions. Feel free to ask me about more details.
Locking in your rate is a somewhat complex issue as deciding when to lock in your interest rates depends on a number of factors such as the current rates and whether rates may go either up or down. A good broker will be following current market conditions and reports that could affect San Diego Mortgage Rates. To see what is happening with current interest rates you can visit www.sandiegomortgagenews.net/staging/san-diego-mortgage-rates.
If rates appear to be going up you may want to lock your rates when make your home loan application after the contract is accepted.
Getting Your Loan Fully Approved
Your San Diego Mortgage Broker will work with the lender to submit a complete loan package including income and asset documentation, appraisal, and any other conditions the underwriter may come back with.
The initial underwrite may take 3-5 days depending on how busy the lenders are. If there are conditions, your broker will gather these and submit them in. The review of these documents could take another 72 hours. In most cases, we are closing loans in 30 days or less.
Once the loan is approved you will have to sign the final loan documents and you’re all done with that part of the process.
Before escrow closes you will normally be allowed for a “Final Verification of Condition”, which is usually included in the purchase agreement so you can perform one last walk through of the home. Once satisfied, the lender will now send all your loan documentation to the title office to prepare all the documents for signature.
When you attend the signing, the notary will explain all the documentation to you in detail. Two of the documents that you should especially scrutinize include the “Settlement Statement” which lists all the closing costs and the “credits.” The second one which must be carefully examined is the “Note” which outlines your interest rate and other applicable terms of the loan.
Once all this is completed, the escrow officer will return the paperwork back to the lender for their final review. When they are satisfied, the lender will advise the escrow officer they are ready to “fund the loan”, which means they are ready to wire the funds to the escrow officer.
Escrow is closed the first business day after the lender has funded the loan. The title company then sends their representative to the County’s Recorder Office to record the deed to confirm the transfer of title of property to you the buyer.
You can now move into your home as per the date of possession which is outlined in the purchase agreement.
Contact Shanne Sleder at the Mortgage Planners for More Information
For any aspect of the home buying process, I would be happy to offer you my advice or any other information to make your home loan and purchase process run smoothly. If you have any questions, call me at 619 – 312 – 0612.