Want to know how to buy a house in San Francisco? Well, it all starts with the mortgage. Unless you’re paying cash, you’re going to need to secure a loan before you’re able to purchase your dream home. But that’s hardly insurmountable! The mortgage lending process isn’t as daunting or complicated as it seems, so read on, and glean an understanding of what to expect, and how to navigate the next four or six months of your home buying process.
As top San Francisco real estate agents, we know the ins and outs of the market. Not only do we understand how to buy a house in San Francisco, we also have the expertise to make it happen! As Realtors, we can offer guidance with the mortgage lending process, but ultimately the details will be worked out between you and the lender.
The very first thing you should do if you need to know how to buy a house in San Francisco is to consult an experienced Realtor. Your San Francisco Realtor is your first, best resource to navigate the lending process, since she or he will have had so much experience. Someone who knows the San Francisco real estate market inside and out is your best choice, since mortgages will depend on a great many factors. And of course we recommend our team at Danielle Lazier and Associates! Please reach out if you have questions and we’re happy to help.
The pre-approval process can begin as many as four months before your intention to purchase, depending on the strictures of your lender. (After that window, the loan may no longer be guaranteed, and it may come to you to renegotiate.) You’re better off getting it done early, so that you know you have your mortgage on lock-down when you find that perfect home. And in the fast-paced San Francisco real estate market, a few days (or hours!) can make all the difference.
The pre-approval process examines your finances, your income, assets and liabilities, and credit history to determine your eligibility for your eventual loan. This is a paperwork-intensive process, so be sure to keep records handy, for ready access when you need them (even those you’ve already submitted). Your pre-approval interest rate is guaranteed for a period up to 120 days (the exact timespan will depend on your lender and situation), but if interest rates should drop, you’ll still be entitled to the lower one.
This isn’t the same as a pre-approval. While pre-approval is a practical part of the lending process, pre-qualification is more of a back-of-the-envelope calculation of your eligibility to borrow. It’s a broad estimation, and it’s by no means a guarantee, nor does it come with any real verification process. Think of it more like a pre-application consultation. It can be a good way to get a conversation started, but definitely don’t bank on it.
Your loan officer will reprocess the documents you used in your pre-approval process, sometimes with more depth and more intricacy. Within 3 days, you’ll be given a Loan Estimate, which will describe the terms and costs of your loan. It will define the amounts of your payments (principal, interest, tax, and insurance). At this stage your loan is neither approved nor denied, but it will have been clearly laid out so that all parties will have an actionable contract to sign off on.
The underwriter (the bank, or other body who actually gives you the money) has final say on your loan approval. The underwriting process verifies your loan application, and evaluates the valuation of your collateral (your new property). This is the point at which your interest rate is locked in. Once any contingencies have been satisfied, it’s closing time.
You don’t have to go home, but you can stay here. Your mortgage is handled, and it’s time to seal the deal.
The closing meeting will involve a substantial amount of paperwork, and you can expect it to take at least a few hours. Before that, you’re entitled to a three-day review period to make sure that everything checks out, or to take a final walk-through of the property to be sure that it’s in saleable condition as expected. Rarely do problems creep up (your Realtor will have been attentive to potential pitfalls all through the process, so most things should already have been long-since caught) but this final review process makes sure that there will be no surprises when everything’s said and done.
The key closing documents you’ll need to engage with are:
-Closing Disclosure
A summary of your loan terms, monthly payments, and closing costs
-Promissory Note
The loan amount and terms, and the path for recourse if you fail to make payments
-Deed of Trust
A grant of claim on the property if you do not live up to the terms of your loan
-Certificate of Occupancy
A legal document you’ll need to move into a new construction
Once you’ve got these processed, the last technical details are handled by your title company.
You’re done! You’ve got the keys, and you’re ready to move in. Remember that your San Francisco Realtor will be with you throughout this process. It is intensive, and time-consuming, but it doesn’t need to feel daunting. If you want to know more about how to buy a house in San Francisco, give Danielle Lazier + Associates a call. We’re ready to help, and to talk you through this, or any other part of the home buying process. Get in touch today, start the home buying process, and get the keys to your new San Francisco dream home!
