Before you start looking for a home it's to your advantage to see how much of a loan you can qualify for from a lender. If you are working with a real estate agent, getting pre-approved lets the agent know you are a serious buyer and the exact price range in which you can afford to buy. It will also help educate you as to what you are comfortable with as an overall monthly housing expense. This will include all the costs of ownership principle, interest, taxes, and insurance or an HOA fee, in the case of a condominium. It will enable your agent to write a strong offer that the listing agent will respond to favorably and you will feel comfortable in writing.

Once you have been pre-approved, it is generally valid for 90 days. The application is then underwritten by the lender (based upon credit, income, employment and assets of the applicant) and is subject to an acceptable appraisal, purchase contract, preliminary title report and other substantiating documentation relative to the specific property upon which you make an offer.

Generally, there are no costs associated with the pre-approval process other than a credit report. Your loan agent can help determine during the pre-approval process how the information could affect your purchasing power. The loan agent can also determine if there is more that can be done to show your assets in their best light and clear up problems before they become obstacles to your purchase.

Loan basics

A mortgage is a loan for which your home serves as the collateral. A basic monthly mortgage cost includes the principal amount being borrowed, interest, property taxes and insurance.

There are many different types of mortgages out there, but the most popular come in the following flavors: fixed-rate, adjustable rate, fixed and variable combined, and Federal Housing Administration (FHA), most often in 15-year or 30-year terms. The size of your mortgage will ultimately depend on the monthly total you can comfortably afford and the interest rates available at the time you apply. Using our monthly mortgage payment calculator you can explore the outcome of changes to your loan balance, mortgage term and interest rates on your monthly principal and interest payments.

Compare loans

Mortgage lenders are able to compare hundreds of loan packages to meet your individual needs. All purchasers are different and have different needs depending on their personal plans for the property and their individual circumstances. Here are a few of the most popular:

Fixed Rate Mortgages - Offering security and stability; these are the most popular type of loan. The interest rate is fixed for the life of the mortgage, so your monthly payments never change.

Adjustable Rate Mortgages - Offering flexibility and control, ARMs generally start out with rates lower than fixed-rate loans. This saves you money early on, and helps you qualify for a more expensive home. However, your rate is tied to a market index, so as the index goes up or down, so does the amount you pay. These could be fixed for a period of time and then converting to a fully adjustable loan later. Such as a 5 year, 7 year, or 10 year fixed term.

Special Mortgage Programs - Offering special considerations for people in unique financial situations which would include FHA or VA loans, low down payments options or zero down payment options. Generally the loan amounts are too low for use in the San Francisco market.

Interest Only Mortgages - Offering lower initial monthly payments, these loans do not include any repayment of the principal portion of the loan for an agreed upon period of time. This means you're paying off only the interest up front, but can pay toward principle if you would like.

More and more people are turning to mortgage specialists like the ones listed here, for one very important reason— they work for you. Because they don't represent any one lender or bank, your best interest is their number one goal. In fact, mortgage brokers do over 70% of all loans originated in the USA.

With thousands of lending resources at their fingertips, they are able to compare a wide variety of packages and select the ones that best meet your individual needs. No bank or direct lender can say that! They offer not only superior service, but also the most competitive mortgage packages available. Mortgage services are at no additional cost to you. Loan agents are compensated by the lender that finally makes the loan. A mortgage broker, generally, charges you no more than if you had applied directly with the direct lender.

The most important lesson to be learned at this point, is to talk to several lenders and compare what they have to offer in terms of rates, service, and overall reliability.

They await the opportunity to help you.

Mortgage Brokers

Dorian Sarris
Triton Funding Group
www.tritonfunding.com
415-651-1102

Julian Hebron
Residential Pacific Mortgage
www.rpm-mortgage.com
415-485-3764

Direct Lenders

Eliza Wu
Washington Mutual
eliza.wu@wamu.net
415-242-6304

Kathryn F. Lawrence
First Republic Bank
Work: 415-392-1400
Home: 415-563-4404
Pager: 415-627-1635

Paul Young
Bank of America
Work: 415-622-2996