I have been a mortgage broker in the Bay Area for over 20 years now. I get all types of questions from my clients who are looking to purchase a Danville home or San Ramon home. I wanted to take the time to address some questions that you might have as well as you go through the Danville home purchase process.

Are prequalification and preapproval the same thing?

Getting prequalified means providing me with some financial information like income and the amount of savings and investments you currently have. I use this information to estimate how much money you will be able to borrow which will help you narrow down your price range for a Danville home or San Ramon home. The process of getting prequalified to buy a Bay Area home does require me to run your credit.

The actual preapproval process to buy a Danville home takes things a step further. I will have you provide me with paystubs, bank statements, W2s and tax returns. All of these documents along with your credit report will allow me to better verify the best price point for you to be searching in when buying a Bay Area home. Sellers and sellers’ agents always prefer the potential buyer of their Bay Area home to have a preapproval letter as it gives them more confidence that you are committed and able to obtain a loan.

How long does getting prequalified to purchase a Bay Area home take?

I get this question all the time! Prequalification can be done in a short amount of time so you’re ready  to buy your home! After having you provide me with your income, assets, and employment information, with your permission, I will run your credit and determine the amount that you are prequalified to make an offer at in the Bay Area.

Is my credit score important? If yes, why?

Your credit is an extremely important component to the approval process. Your credit score is a way of determining how likely you are to pay or not pay your bills. This is where missing credit card payments can come back to haunt you. The better your history-the more attractive you become to loan too. When buying a Bay Area home you want to aim to have good or great credit. The higher your credit scores the better as you will have availability to lower rates,

Why do I need an appraisal?

When you buy a Danville home or any Bay Area home you will have to get an appraisal. The appraisal is an estimate of the property’s current value. The appraiser takes into consideration upgrades, recently sold homes, and condition of home. The appraisal gives a lender the proof that the Danville home you are buying is true to the value you are paying for it.

What is the difference between APR and interest rate?

APR is the Annual Percentage Rate that includes the interest rate and then any additional costs or charges that go with purchasing your Bay Area home such as origination fees, points, private mortgage insurance, processing fees, and underwriting fees. The Interest Rate is the monthly cost you pay on the unpaid balance of your Bay Area home loan.