We recommend that a prospective San Francisco home buyer get pre-approved for financing before they even look at homes. I’m often asked why this is important.
There are many reasons why this is helpful for a home buyer. Even though, you are excited to get out there and start touring homes, your home buying process will be much more enjoyable and efficient if you know your accurate purchasing power in today's complex lending environment.
And, you'll be in the best position to negotiate a good deal because the seller and listing agent know you are serious and qualified to make the purchase! In the busy San Francisco real estate market, this is fundamental.
At SFHotlist, we say that we want to help you discover your own special "apple" and then help you to focus your search on only these apples. As they say, you can't compare apples to oranges! And if you do, your San Francisco home buying experience will be long and stressful.
First of all, let’s define a couple of terms.
What is the difference between prequalification and preapproval? Prequalification means that you have spoken to a lender or maybe typed in your income and assets into an online mortgage calculator and were given a loan amount or purchase price that you could qualify for. The key word here is could. You have not yet submitted or verified your information.
A prequalification is helpful but not sufficient. In order to be in the best negotiating position and to truly understand your loan options, you'll need to choose a lender and complete the full preapproval. This means filling out a loan application and submitting your supporting documentation like W2, bank statements, etc, and usually, doing a credit check.
There are just so many variables to what kind of loan you'll get, what the interest rate will be that you simply must be armed and educated from the start!
Right now, the financing can be a headache too so make sure to work with an excellent mortgage broker or banker. We highly recommend that you work with someone that your Realtor knows. Hopefully, we're your Realtor but regardless, this is a good idea.
Why? Well, first off, it is NOT because we have any financial relationship with the mortgage broker or banker. Kickbacks of any kind are illegal. It is because we know their work. We know that they will deliver on promises and make the process as easy on you as possible. Unfortunately, I cannot say this about everyone and have way too many nightmare stories...
Here's our list of recommended mortgage lenders.
