As soon as you decide that you would like to begin to look for your new Oakland or Berkeley home, you should take steps to get your loan financing in place.  In many areas of the East Bay, the competition for homes and condominiums is very high. As a result, you need to be ready to make a offer immediately upon finding your ideal home, to avoid losing out to other bidders.  What do you need to know about your financing options?

1. Being Pre-Qualified By A Lender-This is a first step in the mortgage process, but an important one.  You will be asked to provide your lender with your basic financial status.  You would inform them about your debt, your income, and your assets.  It allows the lender to review your situation, and give you a general picture of the mortgage type and amount for which you qualify, given that information provided.  But, this process does not involve an in depth analysis of your credit report or your ability to purchase the home.  The amount to be loaned, thus, is not a sure thing.  It will not carry as much weight with a seller as being Pre-Approved, when you are up against many other more qualified bidders. 

2. Being Pre-Approved By A Lender-This is a much more involved process than being Pre-Qualified.  You will be asked to complete a comprehensive mortgage application, and then to supply the lender with detailed information about your financial status.  The lender will obtain your credit rating and credit history.  Upon review and consideration of all of this information, the lender should be able to give you a specific mortgage amount for which you will be approved, and the interest rate that should be attached.  At this stage, you will now be able to know exactly what type of home you can afford, and allow you to focus on just the type of home that is right for you.  

3. Completing the Job--A Loan Commitment-Once you have found your perfect home, you will fill in the final details on your Pre-Approved paperwork.  Once you have done that, your Pre-Approval papers become a complete loan application.  Now, to finally move ahead with a commitment, the bank will have to approve both you AND the home that you intend to buy. The lender needs to know that the home is appraised at or above its selling price, and, it will investigate to insure itself that there are no potential structural, lien or legal issues involved in its purchase.  Once they are satisfied that all is well, they will issue a Loan Commitment Letter, and you will be able to move ahead with your new home purchase.

Be assured that I will help you along this financial path, and together we will search for a perfect fit for you and your new home.  

Posted by Bruce Wagg on


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