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Mortgage Information in San Diego, CA

Pre-Qualification

Pre-qualification is just the start of the process. The lender determines how much a borrower can pay for a house based on income and debts. It's recommended to get pre-qualified for each loan type since they may have different valuations.

Mortgage companies look at two key factors before approving a borrower

  1. Ability to repay the loan.
    1. Verified by your current employment and total income
    2. Steady employment for 2 years at same location, or same line of work.

  2. Willingness to repay the loan.
    1. Previous financial commitments (Credit and Rental History)
    2. How the property will be used

Please remember each applicant is handled on a case-by-case basis, so there aren't any clear cut rules to being approved.
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Mortgage Programs and Rates

In order to fully determine the differences between mortgage programs, a borrower should determine how long they play to keep the loan.

For example, if you plan to sell a few years down the line, an adjustment or balloon loan would be idea. However if you see yourself living in the house longer, a fixed loan would work better.

Whatever your situation, a lender can determine your situation and recommend the best program.
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The Application

The loan application is the real start of your journey towards a new home. This typically happens between the first and fifth day of the start of the process. After submitting the required documents, any fees or closing cost estimates are discussed while examining mortgage program options. These costs are verified by the Good Faith Estimate (GFE) and a Truth-In-Lending Statement which you'll received within 3 days of application submission.
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Processing

Once the application has been submitted, the processing of the mortgage begins.

The Processor orders:

  • Credit Report
  • Appraisal
  • Title Report

The information on the application, such as bank deposits and payment histories, are then verified. Any negative credit marks, such as late payments, collections and/or judgments require a written explanation. The processor examines the Appraisal and Title Report checking for property issues that may require further investigation. The entire mortgage package is then put together for submission to the lender.
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Required Documents

If you are purchasing or refinancing your home, and you are salaried, you will need to provide:
  • Past two-years W-2s
  • One month of pay-stubs
If you are self-employed:
  • Past two-years tax returns
If you own rental property you will need to provide:
  • Rental Agreements
  • Past 2-years' tax returns
If you wish to speed up the approval process, provide the following:
  • Past three months' bank
  • Stock and mutual fund account statements
  • Recent stock brokerage accounts
  • IRA/401k accounts
If you are requesting cash-out, you will need a "Use of Proceeds" letter of explanation. Provide a copy of the divorce decree if applicable.
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Credit Reports

Be sure to take steps to correct any negative mark on your credit before making your application. A Credit Profile refers to a consumer credit file, which is made up of various consumer credit reporting agencies. It is a picture of how you paid back the companies you have borrowed money from, or how you have met other financial obligations.

There are five categories of information on a credit profile:

  • Identifying Information
  • Employment Information
  • Credit Information
  • Public Record Information
  • Inquiries

NOT included on your credit profile is race, religion, health, driving record, criminal record, political preference, or income.

If you have had credit problems, be prepared to write a "Letter of Explanation” explaining the reasons behind those issues.

Common reasons for credit problems:
  • Unemployment
  • Illness
  • Other financial difficulties

If you had problems that have reestablished credit, and your payments have been on time for a year or more, your credit may be considered satisfactory.

The following items are some of the ways that you can improve your credit score:
  • Pay your bills on time.
  • Keep Balances low on credit cards.
  • Limit your credit accounts to what you really need.
  • Check that your credit report information is accurate.
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Appraisal Basics

An appraisal of real estate is the valuation of the rights of ownership. The appraiser must define the rights to be appraised. The appraiser does not create value, the appraiser interprets the market to arrive at a value estimate. As the appraiser compiles data pertinent to a report, consideration must be given to the site and amenities as well as the physical condition of the property. Considerable research and collection of data must be completed prior to the appraiser arriving at a final opinion of value.
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Underwriting

Once the processor has put together a complete package with all verifications and documentation, the file is sent to the lender. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed, the loan is put into "suspense" and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an "approved" status.
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Closing

Once the loan is approved, the file is transferred to the closing and funding department. The funding department notifies the broker and closing attorney of the approval and verifies broker and closing fees. The closing attorney then schedules a time for the borrower to sign the loan documentation.

At the closing the borrower should:
  • Bring a cashier's check for your down payment and closing costs if required
  • Review the final loan documents
  • Sign the loan documents
  • Bring identification and proof of insurance

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Summation

A typical "A" mortgage transaction takes between 14-21 business days to complete. With new automated underwriting, this process speeds up greatly. Contact one of our experienced Loan Officers today to discuss your particular mortgage needs or Apply Online and a Loan Officer will promptly get back to you.

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