Applying for a Home Loan

Loan Application and Mortgage Rates:

We often receive calls from borrowers asking what our mortgage rates are, however to accurately quote a home loan rate, a full loan application is required.  The reason is because there are many different variables which need to be considered that directly affect your mortgage rate.  Usually when you see an advertised rate from a mortgage lender, it will be the BEST rate available assuming all the lowest LTV and highest FICO scores.  To receive an accurate rate quote, the lender will need all the following information:

The following is a list of criteria required in order to determine the pricing and rate for a home loan on a  conventional agency loan. The adjustments for these variables are published by Fannie Mae and Freddie Mac. Any lender you decide to obtain your loan with will be required to use these same adjustors when pricing out your loan:

1. LTV – this is based on the amount of equity or down pmt on your loan. On conventional loans, the higher the LTV, the lower the rate. The best rates will be provided on loans with 40% equity or down pmt
2. FICO SCORE – when your credit is run, each borrower receives 3 credit scores (from Transunion, Experian, and Equifax). The middle score on the credit report is used to determine your fico score for loan approval andPlease be aware that many credit score websites offer consumer credit score checks, however, mortgage lenders can only use Fair Isaac FICO score to evaluate your credit score and sometimes this score may differ from one that you ran yourself if it is a different scoring model.
3. OWNER OCCUPIED VS INVESTMENT PROPERTY – an owner occupied property will receive a much better rate than one provided for an investment property
4. DETACHED HOME VS CONDO/TOWNHOUSE – a better rate will be provided on detached home loans OR attached condominium/townhouses with 25% or more equity or down pmt.
5. Cashout refinance – if you want to take cash out of your property, there may be an adjustment applied depending on the amount of equity you have in your home
6. Subordinate financing – if you have a 2^nd mortgage, this may affect your rate if the total of your 1^st and 2^nd loans results in under 25% equity in your home.
7. Units – 2 -  4 unit properties have higher rates than 1 single family

If you would like to pre-complete a blank loan application to apply for a loan, please click here. You can fax the form direct to 858-435-4316 for a response the next business day.

Tips for a Smooth Loan Approval and Funding

Shopping Around For a Mortgage?

Here are some tips on how to do it right!

Work with an experienced, professional mortgage specialist. Obtaining a mortgage is the largest financial transaction of your life. It is important to work with someone who is capable of advising you properly, and troubleshoot any issues that may arise along the way.

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Tips for a Smooth Loan Approval and Funding

These DO's and DON'TS will help to avoid delays with your loan approval. Lenders are required to verify and sometimes re-verify your provided information prior to loan funding.

• DON'T make a major purchase (car, boat, jewelry, appliances, home improvements)
• DON'T apply for any new credit cards or loans
• DON'T transfer any balances from one account to another
• DON'T pay off charge offs, collection items, or installment loans without discussing with your loan officer
• DON'T close any credit card accounts unless advised to do so
• DON'T change bank accounts
• DON'T max out or over charge on your credit card accounts – it is recommended that you maintain your credit card balances at THE SAME OR LOWER balances shown on your credit report at time of application. Many lenders are re-checking credit prior to funding even if your loan is fully approved.
• DO continue making your mortgage or rent pmts on time until advised otherwise
• DO stay current on all existing accounts
• DO keep working at your current employer – if you are anticipating or considering an employer change, make sure to inform your loan officer
• DO keep records of non-payroll related deposits into your banking accounts. You may be asked to provide the source of those deposits.
• DO try to keep a tab on your credit card limits and keep your balances below 75% of the limit if possible.
• DO call if you have any questions related to your loan

** If you encounter a special situation, please mention it right away so that you can obtain the proper advise on how to proceed.

Appraisal Tips

Appraisal Tips

Here is a link to some appraisal tips provided to us from an appraisal management company to assist you in preparing for the appraisal inspection 

CLICK HERE (PDF)

Closing and Settlement Costs

Closing and Settlement Costs - what are they?

With every purchase or refinance transaction, there will be closing costs. Closing costs can be paid by the buyer/borrower, or the seller, or the lender via closing cost credits and all of the following should appear on your Good Faith Estimate.

• Points -Points are fees paid to buy down your rate. If you are paying points to receive a rate, it means that the rate is below par. Par rate is generally the rate you can get with 0 points. These fees are included on Line 1 of the GFE. Points are optional - you normally do not need to pay them unless you want to buy down your rate below par
• Lender/Loan fees – These are fees such as underwriting, processing, tax service, flood cert, wire fees, appraisal fee, document fees, HOA condo cert fees. These fees are fees charged by the lender or lender affiliates and are related to obtaining the loan. These fees can be reduced if your lender pays for some or all of these fees by giving you a closing cost credit.
• Broker compensation – this is the fee paid to the broker to originate the loan. These fees are included on Line 1 of the GFE, and on most of our loans, will be paid by the lender, not the borrower, so you don’t have to worry about paying any premium for our broker services
• Escrow/Title fees – these are fees paid to the escrow and/or title company for their services and include all the closing agent settlement fees, all title companies fees, wire fees, courier/messenger fees, document preparation, and notary fees.
• County or City Transfer Tax – this is a fee paid to the County Recorder to transfer the property from one party to another. In Southern California, this fee is often paid by the seller even though it is shown on the buyer’s GFE.
• Prepaid Items – these are fees that need to be paid at closing, but are also recurring costs. These are considered settlement fees and not closing costs.  Examples are prepaid interest, homeowners insurance, and reserves for setting up your escrow account.

1. Prepaid interest - prepaid interest is similar to daily rents.  When your loan funds on a day that is not the last day of the month, there will be prepaid interest showing on your closing statement.  It covers the daily interest from the day your loan closes until the end of the month. The reason this is required is because when your mortgage pmts start, it must be for a full month.  Therefore any interest owed on the first partial month must be paid upfront.

• Home insurance -You will also need to provide the initial premium for your homeowners insurance policy. In some cases this may include flood, earthquake or other insurance coverage as well. Finally, the last item that is usually prepaid is for property taxes.
• Escrow Account Funds - This is an amount the lender requires you to deposit at closing to set up an “escrow account” to cover your future property tax and/or insurance payments. These are not fees, think of this as a “forced savings account” which, when established properly, will allow the lender to have sufficient funds to pay these bills for you when they come due. These costs will be the same regardless of the lender you choose. Prepaid reserves are always required whenever your mortgage payment includes property taxes and/or insurance with your monthly payment. Not all loans require an escrow impound account, however it is usually required if you have less than 10% down payment or 10% equity in the home. Some lenders will offer a better interest rate or pricing if you elect to include an escrow acccount with your mortgage payments.

Note: As taxes are due at various times, the deposit needed for taxes may vary from 2 to 8 months. The amount of the escrow reserves calculated will depend on the month you close and the month your 1st mortgage pmt starts. There is usually a 2 month cushion added into the reserve requirements in case of any tax or insurance premium increases.

Here is a definition of the other 3rd party closing costs that are standard with most loan transactions: LINK TO CC DEFINITIONS