Getting qualified before you apply for a loan can help you understand how much you can borrow.

When buying a house, you may get pre-qualified or pre-approved. Loan consultants at South Bay Mortgage & Capital, Inc. will usually pre-qualify clients that same business day. However, this process is not as beneficial as a pre-approval where you have to go through a more rigorous process which includes verification of your credit, income, assets and liabilities. It is highly recommended that you get pre-approved before you start looking for a house. This will help you:

Find out the maximum house you can buy, so you don't waste time looking for properties you can not afford.

Puts you in a stronger position when you are negotiating with the seller, because the seller knows that your loan is already approved.

Helps you close quickly, since your loan is already approved.

To shop for a loan you will need to:

• Think about how long you plan to keep the loan. If you plan to sell the house in a few years you may want to consider an adjustable rate mortgage. This typically offers you a lower rate for a period up to 10 years. However, if you plan to keep the property for a longer period, you may want to consider a fully amortizing fixed loan.
• Understand the relationship between rates and points. Points are considered to be prepaid interest and are tax deductible. Each point is equal to one percent of the loan. So for example 1 point on a $150,000 loan is $1,500. The more points you pay, the lower the rate you will get. Depending on the market this is not always recommended.
• Compare different programs. Shopping for a loan can be difficult. With so many programs to choose from, each of which has different rates, points and fees, it's hard to figure out which program is best for you. Loan Consultants from South Bay Mortgage and Capital, Inc. will shop various wholesale lenders and do our best to find the lowest priced lender. As usual we take care of all lender fees at your request.

Obtain Loan Approval:

Once your loan application has been received we will start the loan approval process immediately. This involves verifying your:

• Credit history
• Employment history
• Assets including your bank accounts, stocks, mutual fund and retirement accounts
• Property value

Based on your specific situation, additional documents or verifications may be required. To improve your chances of getting a loan approval:

• Fill out a loan application.
• Respond promptly to any requests for additional documents. This is especially critical if your rate is locked or if you plan to close by a certain date.
• Do not make any major purchases. Do not buy a car, furniture or another house till your loan is closed. Anything that causes your debts to increase might have an adverse affect on your current application.
• Do not move money into your bank accounts unless it can be traced. If you are receiving money from friends, family or other relatives, please contact us.
• Do not go out of town around the closing date. If you do plan to be out of town when your loan is expected to close, you may sign a power of attorney, to authorize another individual to sign on your behalf.

Close the Loan:

After your loan is approved, you will be required to sign the final loan documents. This will normally take place in front of a notary public. Be prepared to:

• Bring a checkbook for your down payment and closing costs if required.
• Be prepared to show valid identification to the notary.
• Review the final loan documents. Make sure that the interest rate and loan terms are what you were promised. Also, verify that the name and address on the loan documents are accurate.
• Sign the loan documents.

Your loan will normally close shortly after you have signed the loan documents. On refinance and home equity loan transactions federal law requires that you have 3 days to review the documents before your loan transaction can close.