Choosing to buy a home isn’t something that should be taken lightly that’s why getting pre-approved is essential. It’s a major decision that can significantly impact one’s life. There are a lot of steps that need to be taken to complete the process.

One of the most important steps is getting pre-approved for a mortgage loan. While it isn’t always required, it is recommended by many real estate and lending experts. It’s a relatively painless procedure that should only take a day or two at most.

Buying a home in California can take some time. Getting pre-approved for a loan can make the experience a little less stressful. Here are some reasons why getting pre-approved is essential:

1. You’ll know just how much you can borrow.

One of the biggest reasons to get pre-approved for a mortgage loan is so that you can determine how much you can borrow. This way, you won’t end up looking at properties that are more than you can realistically afford. This can lead to you falling in love with a property that is ultimately out of your price range, and could make all other houses in your price range feel a lot less desirable.

Even though you may be pre-approved for a specific dollar amount, it doesn’t necessarily mean that you should look for properties that are priced at that maximum price point. Remember that you’ll need to set aside funds for the down payment, closing costs, homeowners insurance, monthly utilities and other related charges.

Don’t forget about car payments, phone bills, groceries and other regular expenses, either! After obtaining a pre-approval letter, it’s a good idea to review your income and expenses and set a budget for yourself. Look through everything line by line. If there are any unnecessary or redundant charges, now’s the time to cut them.

If you have credit card debt or other loans or financial obligations, you should either pay them off or pay them down as much as possible. This will help to improve your credit score. You should start setting aside funds from each paycheck to go towards your goal of owning a home.

2. You’ll have an advantage over other interested parties.

Getting pre-approved for a loan can also give you a distinct advantage over others who haven’t. A pre-approval letter tells sellers that a qualified lender has personally reviewed your finances and have decided that you can purchase a home. This information can give sellers confidence in you, because they know that your loan will more than likely be approved.

Most home sellers don’t want to negotiate with people who don’t have their finances in order or could otherwise be considered risky. That’s why getting pre-approved is one of the first things that you should do. It could even help you buy a home quicker.

3. You can identify any possible errors in your credit report.

When you meet with a lender, they will review your current income, expenses and debt. They will also review your credit. This is when any potential problems will most likely arise.

If there are any errors or inaccuracies on your credit report, you should work to resolve those issues immediately. If you don’t, they could prevent you from being pre-approved. Your dream of home ownership could fade away just as the process was getting started.

To get pre-approved for a loan, you’ll need to provide documentation for the following items:

– Income and employment information (tax forms, pay stubs, etc.)
– Any current debt or liabilities (student loans, car loans, etc.)
– Checking, savings, retirement and other bank accounts
– Any property that you currently own
– Any additional assets that you own
– Your employer’s contact information

The lender will review all of this information. They will inform you if additional documentation is needed, and then make a determination as to whether or not they will issue a pre-approval letter.

Once you’ve been pre-approved, you can start researching homes that you can afford. You can also comparison shop for mortgage loans at different lending institutions. Look at each offer carefully and feel free to ask questions if you don’t understand something or need clarification on specific items. Make sure that you read the contract carefully before agreeing to a particular mortgage loan.

Pre-approval letters are typically only valid for 30 to 90 days. If your home search is going to take longer than that, you may want to get multiple letters. This is a safeguard so that you can concentrate on finding the home that best meets your needs.

Just keep in mind that a pre-approval letter doesn’t guarantee that you’ll be approved for a loan. You could still be denied for various reasons. Your financial situation could also change. Any added debt, loss of a job or other factors could affect your ability to secure a mortgage loan.

A loan is a serious obligation and should be treated as such. That’s why it’s important to read the details of the mortgage contract so that you fully understand your responsibilities. Once you’ve been approved for a mortgage loan and close on a home, take a few minutes to re-examine the mortgage contract. You may want to add the mortgage payment amounts and due dates on your calendar so that you don’t forget.

Pre-approval is just as necessary as all of the other parts of the home buying process. The only exceptions are if you’re building our home, have already been approved for a loan or if you intend to pay for your home all at once up front. All you need to is to supply a few financial documents and employment information to your lender. They should have a decision for you in a day or two.

Once you’ve been pre-approved, you can start looking at homes. Schedule a meeting with a realtor to discuss your intentions. Let them know that you’ve been pre-approved for a loan so they can start finding homes that you’d qualify for. The sooner that you take care of this, the closer you’ll be towards owning the kind of home that you’ve always wanted.
Jose Guevara
Lead Agent

Escrow is an important part of the home buying process and today we’ll share 10 habits of a successful escrow. An escrow account is established for home buyers once they’ve made an offer on a home and the offer has been accepted. The buyer will then need to make a deposit, also referred to as earnest money, to the seller. Those funds are then placed into an escrow account until closing.

Once the closing has been finalized, the money in the escrow account will then be released. This money is usually returned to the buyer so that they can apply it towards their down payment or closing costs. The amount that’s required to be entered into most escrow accounts is usually around one to two percent of the sale price that’s been agreed upon.

Buying a home in California is frequently done with an escrow. Here are a few things that you should and shouldn’t do to maintain a strong escrow:

1. Get pre-approved for a mortgage if you haven’t already

Being pre-approved for a mortgage gives you a significant advantage when it’s time to look for houses. A lender will review your employment and credit history and then issue an approval letter stating amount they are willing to lend you. You’ll know what homes are in your price range, and you may be able to buy a home sooner than others who haven’t been pre-approved yet.

2. Set reasonable expectations for your home search

When it comes to searching for the ideal home, sometimes the sky’s the limit. However, you still have to keep your expectations realistic. Don’t try to buy a home that’s more expensive than you can actually afford. You may have to go without a few amenities on your wish list, or look for properties that are a little farther away from your ideal location.

3. Have your documents in order

When you meet with your lender, they may ask you for copies of pay stubs, tax returns and other documents for proof of income and employment. You should have these items readily available. If you don’t, take some time before meeting with them to ensure that you have everything that you need.

4. Don’t make any large purchases in the meantime

It may be tempting to splurge on a few luxuries once you’ve been pre-approved for a loan. However, this is something that you should definitely avoid. It may put you into debt, and it could hamper your ability to cover the down payment, closing costs and other associated expenses. Large purchases may cause the lender to scrutinize your loan request, and they may even have reason to disallow or deny it in certain situations.

5. Have a strong negotiator on your side

If you’re not assertive enough, you may want to have your realtor or another qualified expert at your side. You need to stand up for your rights in a home sale. Don’t let a buyer persuade you to buy the home for a higher price, skip the home inspection or do anything that could otherwise put the sale in jeopardy. Express your concerns about any repairs or renovations that need to be made and have a thorough discussion about which party will be responsible for them.

6. Ensure that all necessary inspections are performed

In many property transactions, a home inspection, home appraisal, and sometimes a land survey are required. Follow the rules and regulations in your area and make sure that no mandatory inspections are missed. You can work with your realtor and the seller to ensure that these tasks are performed in a timely manner. You should attend the home inspection, and you may attend the other inspections if you wish.

7. Communicate at all times

Communication is an essential part of any home sale. Stay in constant contact with your real estate agent, the seller, title agent, inspector and anyone else that will be involved in the process. Be ready to answer questions or provide additional documents if necessary. Express any concerns that you may have and don’t be afraid to ask questions as they arise.

8. Keep all of your active accounts current

Your finances should be in good standing while you’re working to buy a home. All bills should be paid on time. If you have any other outstanding loans or debt, now is the perfect time to pay them off or pay them down as much as you can. You may also want to set a budget for yourself. Review your current income and expenditures to see if there are any unnecessary or redundant items that can be eliminated. Set aside a certain dollar amount from each paycheck for your your down payment and other fees, such as closing costs, title searches, homeowners insurance and monthly utilities.

9. Don’t apply for credit with other lenders

Applying for credit cards, loans or other forms of credit with other institutions can raise a few red flags. It may make your lender question your intentions. It can also create too many inquiries into your credit history. These requests may even reduce your credit score.

10. Don’t co-sign for others

If you co-sign for a loan or other obligation for another person, you could be held liable if they default. This can also negatively impact your credit. If someone asks you to co-sign for them, kindly decline and calmly explain to them the reasons why you can’t honor their request at this time.

These are just some of the many things to watch for while you’re in escrow. The escrow process typically takes anywhere from around 30 to 60 days to complete or more, depending on circumstances. Most escrows shouldn’t take much longer than 30 days to complete.

Staying calm and using common sense are essential for enduring an escrow. Keep in mind the fact that you’ll be a homeowner soon. It’s an important responsibility that shouldn’t be taken lightly. The escrow will expire before you know it, and you’ll be a homeowner! You can look forward to spending many days in the type of residence that you’ve always wanted.
Jose Guevara
Lead Agent