Home Loans 101: An Interview with Tony Dinh

If you are planning to buy a home in most parts of the Bay Area, odds are you’ll need some type of mortgage.  In fact, for the majority of homebuyers, the mortgage is one of the most important and time-consuming pieces of the puzzle when buying a new home, if not THE most important.  Hence, it’s crucial to your success to do it right.

In today’s post, I summarize my talk with First Republic Bank Relationship Manager Tony Dinh about the home loan process and his best advice for new home buyers.

What are the most important things a homebuyer should consider when looking for a home loan? 

First, get preapproved.  Understand how much you can afford. The preapproval is vital.  Not only does it show the seller’s side and your agent that you’re serious, it provides you with confidence knowing that your lender is behind you.

Not just any preapproval will do.  You want an underwritten preapproval.  Work with a lender that does their homework on you upfront: credit check, debt-to-income analysis, and liquidity analysis.  They will ask for your income and asset verification, including paystubs, tax returns, W2s, and asset statements.

Second, do your own research and understand all your loan options (i.e., Fixed Term vs Adjustable Rate Mortgage).  There isn’t a “one size fits all” when it comes to loan programs.  If you plan to stay in your home a while, you’ll want a longer fixed term product.  Inversely, if this is not your forever home, stick with a shorter fixed term program.  Most homeowners typically refinance within 5-8 years of their original mortgage, for various life reasons, but typically due to family, new jobs, or simply change.  Choosing a program that best meets your needs will save you a significant amount of money.

What should a homebuyer do to prepare for the loan application process?

Gather your personal financial documents:  paystubs, 2 years of tax returns, W2s, and bank/asset statements.  Additionally, stay on top of your finances and pay your bills on time.  Avoid any other indebtedness (car loans, credit, or personal loans) during the application period.  Taking on more debt will negatively impact your ability to borrow.

What is the #1 issue most homebuyers overlook in the loan process?

A lot of homebuyers fail to respond to disclosures in time and/or don’t provide the lender with the exact documents requested.  Respond to your lender and/or all related parties ASAP.  Assuming you get into contract, the escrow period is a sensitive time.  Also, if you have travel plans, notify your agent and lender upfront, or you may consider rescheduling your travel.

Why should a homebuyer put at least 20% or more down?

Larger down payments will mean lower monthly payments on the backend.

What is your #1 tip for getting a good interest rate?

Ask what options and requirements are available to lower the rate. At times, a larger down payment or relationship-based discounts are available to borrowers, so find out what they are!

What are points?

A point is an origination fee charged for processing your loan.  Lenders may charge anywhere from zero to one point.  One point equals one percent of the total loan amount. This is added to any other closing costs you may incur.

Other closing costs include, but are not limited to appraisal, title/escrow fees, prepaid interest and homeowner’s insurance.  Ask your lender for an estimate of your closing costs.

When is it a good idea for a homeowner to refinance?

Refinancing means paying off of an existing mortgage and replacing it with a new one. Homeowners will go through the full financing cycle again, including getting a new lender appraisal and submitting updated financials.  So, stay in touch with the market, and if rates drop by .75% of what you’re paying, it may be a good time to consider refinancing.  A rate and term refinance helps lower your monthly payment.

However, you want to ensure that the long term savings outweigh the upfront costs.  Your lender can help make this determination.

Also, for those that have built enough equity in their homes, a cash out refinance allows a homeowner to tap into the equity for home improvements, debt consolidation, and general expenses.

Who are all of the people involved in the loan process?

It really takes a village but at the forefront is the loan officer, credit officer, escrow officer, and funding and closing administrator.


A huge thanks to Tony for taking the time to answer my questions.

If you have any questions or want further information, contact me for a no-obligation consultation.

4 Common Homebuying Mistakes

There are many things that can go wrong when buying home.  And while I’ve always believed the best way to learn is through experience, most homeowners would probably prefer to avoid costly mistakes at the outset, without having to learn hard lessons firsthand.  Here are four common mistakes that immediately come to mind: Continue reading “4 Common Homebuying Mistakes”

Is Homeownership Right For You? Maybe.

Despite the fact that I help people buy and sell real estate for a living, I don’t think homeownership is for everyone.  (There, I said it.)

For the most part, I strongly support investing in real estate and homeownership.  I think it is an excellent way to build wealth, and provide security and stability in many ways.

However, there are a few reasons why I think buying a home and committing to a 30-year mortgage might not be right for someone*: Continue reading “Is Homeownership Right For You? Maybe.”

JUST SOLD – 1701 Central Avenue B, Alameda

Congratulations to F+D on their new starter home! After a discouraging experience during their previous home search with another realtor, we successfully found them a beautiful home they fell in love with!

Here’s what they had to say about it: Continue reading “JUST SOLD – 1701 Central Avenue B, Alameda”

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Congratulations to my newest set of homeowners! Admittedly, this home started out with some flaws that might have scared other homebuyers away.  But after reviewing what was truly important to my clients and taking a closer second look, my clients decided this was the home for them, so we convinced the seller to fix those “flaws” with our winning offer and went for it.  It took some persistence, but sometimes winning the right home for you means really thinking about what you want, what can be fixed to get you what you want, and what you can’t live without.  Then, with the right negotiations, you can reach an agreement that works for everyone. Continue reading “JUST SOLD – 979 36th Street, Richmond”

JUST SOLD – Off Market in La Honda

Earlier this month, I had the pleasure of helping my clients buy their first home nestled in the beautiful redwoods of La Honda, California. After exploring a few different areas, these homebuyers decided La Honda was the next place they wanted to plant some roots.  Located just a short drive from Palo Alto and the rest of the peninsula, as well as the Pacific Ocean in the opposite direction, this location was absolutely perfect for them to start their next chapter.

With little inventory available in La Honda, I knew I had to get creative to find this well-deserving couple their dream home, before prices continued to appreciate and with interest rates on the rise.  Continue reading “JUST SOLD – Off Market in La Honda”