 
Once you have decided to buy an Oakland home, or Oakland condo, and begin your search, one of your most important first steps will be getting the all important financing to purchase it. As you begin to work with me, I will assist you in directing you to some potential loan sources that I feel will be useful and valuable in your search. Many buyers need to be sure that they understand the difference between two very important loan terms. The first is "Pre-Qualified", and the second is "Pre-Approved". There is a big difference between them.
In many neighborhoods in Oakland and Piedmont, the stock of homes is low, and as a result, homes are being bid upon quickly, and are often off the market within a couple of weeks. This means that when you see your ideal home, you want to be immediately ready to place a fully approved offer on the home in front of the seller to ensure prompt consideration.
To be ready to do this you need to know the following:
a. Being Pre-Qualified By A Lender--This is a fairly simple first step in the mortgage process. You will be asked to provide the bank or lender with your general financial status. This would include information about your debt, your income, and your assets. This can even be done online. When the lender reviews all these elements, he can give you a general picture of the mortgage type and amount for which you qualify. An important thing to know, is that this step does not involve an in depth analysis of your credit report, or your ability to purchase the home. As a result, it is not a sure thing-just the amount that you might expect to be approved for. This will not carry as much weight by a seller as a buyer who comes to him with a pre-approved loan.
b. Being Pre-Approved By A Lender--This is a much more involved process. You will be asked to complete an official mortgage application, and then supply the lender with detailed information and paperwork that will allow them to do a comprehensive review of your financial background, and your current credit rating. Based on their conclusions, the lender should be able to tell you a specific mortgage amount for which you will be approved, and the interest rate that should be involved. By reaching the pre-approved stage, you will know exactly what type of home you can afford, and allow you to focus on just the right neighborhood and home that is right for you. Â
c. THE FINAL STEP-A Loan Commitment--Once you have found the right house, you will fill in the final details on your pre-approval paperwork, and the pre-approval becomes a complete application. To get that all important "commitment", the bank will have to approve you and the home that you intend to buy. The home should be appraised at or above it's sales price, and the bank will want to make sure that the home is a worthy asset upon which to base a loan. They may want to get answers about potential structural, legal or lien issues. When they are satisfied on all these issues, they will issue a loan commitment letter, and you will be able to move ahead with your purchase.Â
Following these early steps puts you in an immediate position to be given serious consideration when offers are being made on your potential home-an ideal place to be.Â
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Posted by Bruce Wagg on
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