Starting the Financing Process
While there’s more to come for sure, we wanted to give you the first steps in tacking the home mortgage application process which will most likely be the most annoying part of the entire home buying process.
A lender will only speak in generalities until they see your paperwork as they need documentation, documentation and more documentaion. So you should start by gathering these materials and you should keep the originals and PDF them as you’ll have to send these materials in at least a few times.
If you have any questions about documents or special circumstances it’s best to CALL your lender rep versus emailing them.
Last 2 years of W–2s &1040s for self–employed and/or tax returns (personal & business returns
FILED (e.g., 1120, Sched. K–1) Last 2 pay stubs & employer verification/ability to do so easily; year-end pay statements, 2 years
Last 2 months bank statements (checking, savings, IRA, Money Market, etc)
Credit report fee (banks pull their own), you could provide your own to avoid multiple inquiries but they'll eventually get their own
Photo I.D. (Driver’s License, Passport, Green Card, etc.) (VA letter/certification)
Landlord contact information 12 months proof of rent payments; i.e., canceled checks, statements, etc.
If you’re getting RSUs, vesting schedule showing award amounts and payouts
Gift Letter from relatives/investors; don’t forget they can ‘loan’ you money through forgivable loans
All cash? Funds verification/bank statement
Changing jobs? Offer letter from new employer (potentially, 1 pay stub from pay cycle of new employer)
For current homeowners: current mortgage statement/sales contract
Various HUD & lender application materials
Whatever underwriting requests Explanatory letter for any special cases or situations
LENDER HERE, LENDER THERE, WHICH ONE?
There’s much more than mortgage rate when it comes to getting a mortgage. While it might not seem like it, you are still ultimately a consumer who chooses where to take your business. In evaluating who you want to do your loan, here are some of the fine-print details that can set one loan apart from another:
- Origination points (i.e., lender fees to even do the loan)
- Post-close reserve requirements, if any (i.e., cash on deposit even after you close escrow)
- Early repayment penalties, if any (that make refinancing or early sales less advantageous)
- Number of appraisals required for your purchase, even if it’s not a contingency (if each appraisal costs close to $1,000 . . .)
- Escrow duration, as in how long it will take for them to close the purchase from when the offer is accepted to when we have keys
- Reputation and ethics
- How vigorous their underwriting is and how forgiving they are
- Down payment requirements (10, 15, 20, 25, 30, 40 percent?)
- How often credit is pulled (and how long a credit report lasts)
- If a lender is willing to have a second mortgage with their first mortgage
Yes, San Francisco and the Bay Area are expensive places to buy property. Good thing that there are lots of ways to buy a home. While cash is king, all-cash offers aren’t always the offers that win. We will explore some of the potential options for financing your purchase later one, but here is the documentation that most lenders will want to review. Remember your circumstances will be different so be aware of that.
What Questions Can We Answer?
There’s a lot to digest here we know. Feel free to ping us if you have someting you'd like to ask us.
FOLKS WHO CAN HELP
We’ve worked with a lot of folks who have helped our clients get their homes. Reach out to them to see if they’d be a match for you.
Conventional Purchases, Houses, Condos, Multi-Unit
Home Lending Officer
NMLS # 484714
Bridge, Portfolio, Unconventional
Patrick D Skovran
SVP Market Leader – Residential Lending
Sean Patrick Farrell
Home Mortgage Consultant
NMLSR ID 507300
Wells Fargo Home Mortgage | 555 12th St., Suite # 2140 | Oakland, CA 94607
Cell 510-220-6859 | e-fax 866-720-7654
NMLS # 239580
1385 Shattuck Avenue unit B
Berkeley, CA 94709
Office # 510.647.5326
Cell # 415.302.3398
Construction, Purchase and Renovation, Development, Mortgage Broker
California Real Estate Loans
NMLS #241170 & DRE #01200004
APMC dba California Real Estate Loans, Inc.
600 N San Mateo Dr, San Mateo, CA 94401
See more on the topic.
Paying for it All: San Francisco Financed Purchases + Mortgages Considered By Kevin + Jonathan
Kevin Ho and Jonathan McNarry of Vanguard Properties, San Francisco, consider some of the financing products that will work for the City they and their clients have encountered when buying and selling property in San Francisco over the past few years including fixed mortgages, adjustable ones and exotic ones — each suited for a given property and offering situation.
Yes, It's possible to buy for less than 20 percent down
Think a 20% down payment is the only way to buy property in San Francisco? Think Again. There are many mortgage programs out there that allow you to get into a home now while rates are low and appreciation potential remains strong in San Francisco. Advice from Kevin Ho and Jonathan McNarry, Vanguard Properties
General Information Only.
Remember that the advice above is just for information only and that your situation, circumstances are unique to you and that you should consult a financial professional before proceeding with any application for credit. Things in the financial sector can and do change with little or no notice, so keep current. Also, referrals above are to lending professionals we’ve worked with previously but that we receive no consideration, rebate or otherwise from the folks listed above. You must make the right choice for you exercising your own judgment and assessment.