What is the difference between a pre-approval and a pre-qualification?

For a pre-qualification, a broker or loan officer will collect information on you and acquire a credit report and then will provide you with a pre-qualification letter based on the provided information. This pre-qualification is not as lengthy or complete as a pre-approval. A pre-approval involves all the necessary steps for a loan to be approved, minus the appraisal and the title search. A thorough review of your documentation during this process puts you in a firmer position to negotiate with a seller because you are closer to being fully approved.

When should I refinance?

There are several situations where financing is beneficial. You may want to change your loan terms, such moving from an adjustable-rate loan to fixed-rate one. You may want to save money by reducing your loan term and making larger payments, or getting a lower interest rate. Refinancing also allows you to get rid of private mortgage insurance (PMI). You're also able to withdraw equity from your home through refinancing if you need cash for a large purchase, to pay off other debts, do some renovations, or to make an investment. Contact us today to find out if refinancing is right for you.

What is a rate lock?

A rate lock is a contractual agreement that binds the lender and the borrower. It pertains to four components: the loan program, interest rate, length of the lock, and points or credits.

What is the difference between a mortgage lender and mortgage broker?

A San Diego mortgage broker will go over loan options with you and takes your application to processes the loan. He puts together the necessary information for the loan such as employment and assets verification, your credit report, appraisal, and more. Once this is complete, the San Diego mortgage lender comes into the picture to “underwrite” (determine if the borrower is qualified for the loan or not), and then fund the loan.

What is a full documentation loan?

A full documentation loan is where your assets and income are verified and disclosed. This information is used to determine your ability to repay your loan. Your deposits are verified by the bank and your banking records and your employment and income are verified by your employer. This is the most common kind of loan for a mortgage.

What are the other kinds of loans?

Stated income/verified assets: Your income is disclosed and the income source is verified. However, there is no verification of the actual amount. Aside from verifying the assets, it is also important for you to meet an adequacy standard. Stated income/stated assets: Your assets and income are disclosed but they are not verified. The source of income is verified though. No ratio: Your income is verified and disclosed. However, it is not used to qualify you. No income: Your assets should meet an adequacy standard and they should be verified and disclosed. Your income remains undisclosed though. No asset verification or Stated Assets: Your income is verified and disclosed and used as a qualification for your loan. Your assets are disclosed but do not need to be verified.

No asset: Your income is verified and disclosed. It is also used as your qualification. Your assets, however, are left undisclosed. No assets/no income: Neither your income or assets are disclosed.