Homebuyer Information

Here's where you'll find various resource information about buying, loans, repairs, or anything else needed.

First a little word about your home loan pre-approval;

While I genuinely enjoy going out with you to look at homes, this IS business and it's my responsibility to manage your home-finding/buying process in a professional and successful manner. Unless you're an all-cash buyer, the first step in the process will be to get pre-approved for a mortgage.

There are a few good reasons for this:

  • You'll want to know what your house payments are. You won't want to buy a home which will cost you more per month than you want to spend, so why look at it.
  • More and more sellers are asking for pre-approval letters to accompany the purchase agreement. When you find the home you want, it will be time to write the offer, not look for a lender.
  • Getting pre-approved is an easy way to get pre-evaluated by lenders and to get your credit checked. Your mortgage representative will then report back to you about any aberrations in your loan eligibility.
  • Until you get pre-approved or pre-qualified you won't know exactly what you can or cannot afford, and your home hunting is going to be just guesswork; not a good way to spend your valuable time.

There's no substitute for going out and looking at homes, and having your financing pre-arranged will put you in the position of being able to act immediately to get it

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When someone sells their home and the money that they make from the sale is not enough to fully repay the mortgage which they borrowed to buy it, then they are in the position of having to consider asking their lender to accept less than what is owed on their mortgage. They ask their lender that if they can sell their home and give enough money back, then their lender won't file a notice of foreclosure, re-possess their home 4 months later and kick them out. In order for the lender to decide to grant the opportunity of short-sale to the seller, the lender must have re-assurance and substantiated information that the seller does not have the ability to continue payment of their mortgage, and that the seller has no assets which are not to be applied to the seller's debt to the lender.

When you make an offer on a short-sale property, you are asking for acceptance of your offer not only from the seller, but really from their lender as well, because the seller won't sell the property to you unless their lender approves the offer amount as being enough money to get back for their mortgage, even if it is ''short'' of what is owed. When the seller receives an offer, they tell their lender what it is, then the lender begins the process of studying and figuring out essentially just how much money they're going to lose if they approve the offer. If the offer is good enough, and the lender decides that the amount which they are going to be short isn't too much to bear, they they will tell the seller that they approve the sale amount. Then the SELLER will sign the contract in acceptance of the sale.

Now because there are so many short sales and because the lenders are buried in processing them. The lenders don't even begin to do the accounting to arrive at an acceptable sale price until they receive some sort of offer on the property. So if yours is the first offer which the seller's agent submits to the lender then you can expect to wait a couple of months before hearing back that your offer has been accepted. Then the seller will accept your offer. Then you'll wait some more until you receive WRITTEN acceptance from the lender that they accept your offer. THEN you'll begin escrow, begin the time periods for inspections, loan processing, contingency releases, and close of escrow.

Generally all listings go together on the MLS; bank-owneds, shortsales, un-distressed (normal), probate, just everything. Also generally, in San Diego at least half of all the listings up to 4-500K are shortsales. In a short sale you may get the seller to accept your offer but they have to get their lender to accept it too. The lender then will give a verbal approval to the seller. At that point the property goes on the MLS as ''contingent'', with the remark that they have an accepted offer and are waiting for WRITTEN acceptance from the lender. When that get it then they take the listing of ''active'' and put it into ''pending'' and into escrow. ''Contingent'' is a new MLS status category, and really is just a stage of active status because the sale still isn't decided until the contract is fully executed, including lender's written approval. At that point the sale goes into ''pending'' and the deal is done. Before that point, you as a buyer could go in with a big fist full of money and try to beat their deal, they sometimes may take your offer and kick the other offer out. The whole shortsale process can take 3-6 months, sometimes less, somtimes more. That's just how it is right now. If you don't want to deal with it then you have to find a REO (bank-owned) or an un-distressed sale.

These folks are all really good at what they do. Feel free however to see whomever you like; your bank or credit union for example. By all means shop your loan though, different brokers may represent different lenders, some of whom may have a loan product which suits you better than another. A home is a major purchase, make sure to get a good deal on your loan.

Oh, and by the way;

Applying for new credit and a mortgage simultaneously is never recommended. Any time a borrower applies for new credit, the borrower is seen as a greater credit risk, at least initially. If the borrower also applies for a credit card or an auto loan around the same time as applying for a mortgage, the borrower's credit score might get dinged enough to increase the interest rate applied to the loan, or disqualify the borrower all together. Borrowers should first apply for the mortgage, then apply for other consumer loans AFTER THE MORTGAGE HAS BEEN FUNDED.

(article courtesy of California Association of REALTORS¨)

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