For many people, the beginning of the process of purchasing a house may be frightening, especially for first-time home buyers.

The home buying process may be significantly less stressful when you have the right information and individuals in place like your mortgage loan officer and a real estate agent.

San Diego Mortgage Pre-Approval Letter

In San Diego, a realtor will not show you property unless you have a pre-approval letter that states how much you qualify for.

When you are interested in buying a home, the first step is to get pre-approved. Consulting with a mortgage loan officer provides you with the opportunity to discuss the different types of loan options, credit score requirements, how much money you need to have, and budget for monthly mortgage payments.

Going through the pre-approval process can help you identify any problems (if there are any) and give you time to fix them.

Looking into getting a pre-approval six months in advance puts you in a stronger position to improve your finances, and overall credit profile. 

Knowing what San Diego mortgage program you qualify for

There are several types of home loans available. There are government loan programs, traditional conventional programs, and other unique mortgage options for those who are self-employed or real estate investors.

Types of loan programs our loan officers can help you with:

• Conventional Loan – A loan option if you have a solid credit score. Sellers and realtors prefer this type of loan over any of the government programs that are available.
• FHA loan – A popular home loan for first time home buyers due to it’s lenient guidelines and low down payment of 3.5%
• VA home loan – perfect for veterans and active duty military members. Easy to qualify for and no down payment required.
• Jumbo Loan – A mortgage program used to finance properties that are too expensive for a conventional conforming loan.
• Bank Statement program– Great for borrowers who don’t want to provide their tax return for income quafifciation.

There are a lot of options available. If you are unsure about which program best suits your needs, a loan officer will be able to help guide you.

Understanding how much you will need for closing costs

Once you have the loan program squared away, you’ll know exactly how much will be needed for a down payment. The next step is figuring out how much you need for closing costs.

A common mistake for first time home buyers is neglecting to factor in buyers closing costs. While the exact closing costs you’ll pay on the purchase of a home will vary, it’s still a good idea to familiarize yourself with the range of potential expenses.

Your mortgage loan officer will be able to help you figure this out.

In San Diego closing costs range from 2% – 3% of the homes purchase price.

Closing costs are fees associated with the closing of your home loan.

Closing fees can include: origination fees to set up your home loan, homeowners insurance, escrow and title fees, credit report fees, county recording fees, property taxes, appraisal fees, notary fees and everything in between.

Instead of paying each service provider one-by-one, these expenses are grouped together and paid in one single sum on your closing date.

You can request for the seller to pay for some of these costs on your behalf. Work with your real estate agent to try to negotiate some of your closing costs to be paid by the seller.

Note: In a sellers market, it may be difficult to get the seller to agree to pay for buyers costs. Read: How to Get your Offer Accepted in a Seller’s Market

We can also provide a lender credit, but you you’ll pay a higher interest rate if a credit is needed.

Either of these options could help a home buyer who has enough money for a down payment, but not enough to cover the closing costs.

If you are considering buying a home or have any questions, please feel free to contact us at 858-766-6357 or info@coolehome.com

Read on:

• 5 Reasons to Buy a House in San Diego
• How to Buy a Home for the First Time: A Guide

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