An overview of the homebuying process in San Diego for active-duty service members

STEP 1-- Determine how much you can afford.  This is best done with a loan pre-approval (which Debra, my wife, will handle).  She will send you a list of documents to upload to the DropBox (copies of W2 forms, most recent LES, bank statements, IDs).  With that information, she will pull your credit and input your income and assets into the underwriting program.  The underwriting program is provided to us by the VA and will give us the amount for which you are approved.

READ:   Understanding The VA Home Loan Approval Process: Active Military Service Members

STEP 2---  Determine how much you want to pay (as long as it doesn't exceed the loan approval amount).  You may be approved for $500,000 with a $3000/mo payment but you may not want your payment be more than $2700/month.  If that's true, you want to be searching for homes at a lower price point.  Also, you'll need about $9-10,000 for closing costs.  If you don't want to pay for closing costs, we can ask the seller to pay them

READ:   What is a VA "No-No" mortgage?

STEP 3--- Shopping for a home.  There are two things I want to determine when I initially show you homes: What neighborhoods do you want to live in AND  What are your "need to haves" and "nice to haves"?.  We will look in neighborhoods you like, in the price range you determined in step 2.  Now that we know which neighborhoods you like, I will want to determine what your MUST HAVES are (a garage, three bedrooms, two baths, etc). Then I will try to ask you what your "nice to haves" are  (a TWO car garage, a single family detached home, a big kitchen, etc)

STEP 4:  Look for homes in the neighborhoods you like with the must haves.  When you find one, we will make an offer.

STEP 5:  Prepare an offer to purchase a home.  We fill out an offer form (about 30 pages long).  Here, we specify the price you will pay, whether or not the seller will pay closing costs, how long before we close the transaction, when you get your keys, and when your move in date will be.  The seller can accept the offer, reject it, or counter the offer (in writing).  An example might be this:  You offer to purchase the home for $440,000 with the seller paying $10,000 towards your closing costs and we will cose it in 45 days.  The seller counter with a $450,000 price and only offers to pay $5,000 of your closing costs and wants to close the transaction in 30 days..  You can counter back (in writing) or accept the seller's counter offer.

STEP 6:  Once we have an accepted offer, we "open escrow".  To do this, we deposit the executed and accepted contract, along with a good-faith deposit, with a neutral third party (we call that an escrow company).  The escrow company acts like the "referee" in the transaction and makes sure that all parties follow the contract.  The California contract has a 17-day contingency period.  During that 17 days, you can to order a property inspection (about a $400 cost), need to get the loan submitted to the underwriter (Debra will help you with that), and order an appraisal to determine whether or not you are paying a fair price (Debra will order that).

STEP 7:  Request repairs and remove loan and appraisal contingencies.  At the end of the 17 days, we have to remove the contingencies on the transaction and submit a request for repairs  The seller can agree to some, all, or none of the repairs and, if we are satisfied with their response, we remove contingencies.  This means that you agree to buy the house and your good faith deposit becomes non-refundable.

STEP 8:  Review the closing disclosure statement.  Debra will send you an updated loan disclosure statement.  This will have your final monthly payment and cash-to-close figures on it.

STEP 9--  Sign the final loan documents (3-4 days after the closing disclosure statement).  This is where you agree to the terms of the loan and sign the deed to the house

STEP 10-- Final walk through.  We will walk through the home one last time to make sure that the agreed upon repairs were completed and that the condition is the same or better when you offered on the home.

STEP 11--- Lender wires the loan funds to escrow.  The seller signs the deed.

STEP 12-- The escrow company sends the deed to the County to be recorded.

FINAL STEP-- Pick up the keys to your new home.