Why Winter Is a Good Time to Sell

Today, we'll go over selling your property in the winter season. The conventional wisdom is that you shouldn't sell your home in the winter because no one wants to buy a home and move during the holidays. However, we've seen that winter is one of the best times to sell and get top dollar.

Why? It's a simple matter of supply and demand. Due to the conventional wisdom out there, many people opt to wait and sell in spring or even take their homes off the market during the fourth quarter. This leads to a shortage of inventory.

No one wants to move during the holiday season. Those that move during winter do so because they have to. Maybe they are a military family. Perhaps, they've been transferred by their employer and need to move in by the end of the fiscal year, which is December 31st. These buyers are highly motivated. Since there aren't as many homes available for sale, you can get the most amount of motivated buyers with the least amount of competition!

In the winter, you will most likely spend fewer days on the market, and your overall sales price can go up because of the highly motivated buyers. If you're thinking of selling your home or if you have any other questions for us, give us a call or send us an email. We look forward to hearing from you!

Why Aren’t Millennials Buying Homes More Frequently?

One thing we know for certain about the real estate market is that it is never going to stay the same for long. Today we want to talk about an interesting trend we’ve noticed in real estate: millennials are waiting longer to purchase their first homes than their parents did.

The typical first-time buyer now rents for an average of 6 years before buying a home, which is up from 2.6 years in the early 1970’s, according to Zillow.

 

Here are three reasons why:

1. Down payments are a huge factor

Renters in today’s market are struggling to save for down payments and qualify for mortgages. Most first-time buyers still depend on personal savings for at least some of their down payments, but rising rental prices have complicated the task of socking away money for a down payment.

2. Rising rental rates are complicating things as well

Rental rates are causing 46% of renters aged 25-354, to spend more than 30 percent of their incomes on rent, up from 40 percent a decade earlier.

3. Job security is important to millennial buyers

B buyers average nearly 4.5 years in their field of work and have held their current job for slightly more than three years. Those figures point to how critical career stability is to a younger generation.

Five Reasons To Buy A House In Atlanta Now

Are you considering buying a house in Atlanta? Read on to find out why we think you should buy now!

1)      House values are up by about 10% since last year

This number is based on the data reported by Zillow. Home prices will be higher than they were over the past year or two. Therefore, it is crucial to know exactly how much house you can afford. We can help with that! Once you are certain about your price point, it is important to buy your dream house while you can still afford it.

2)      House prices are expected to keep rising

Adding on to the previous fact, house prices are only going to continue rising. Therefore, again, it is important to buy the house that you are interested in as soon as possible. You may not be able to afford it a few months down the road.

3)      Atlanta home prices are expected to rise faster than other areas

Earlier this year, a panel of over 100 economists predicted that home prices would rise by 3.65% in 2018. This number puts Atlanta above the national average. Keep in mind that these are all just predictions, however, it is wise to consider them.

4)      It’s a seller’s market

As we stated in a previous blog, housing inventory is currently limited. What does this mean for you? It means that you should buy now instead of risk losing your house to another buyer.

5)      Mortgage rates are expected to rise

Along with rising values and prices, mortgage rates are also expected to rise. Give us a call today to find out what rate you can be approved for!

How To Get Your Home Search Off To The Right Start

Today, I want to share some tips on how to begin the home buying process. It can be confusing, so starting off on the right foot is crucial!

One of the first things you want to do is talk with a lender. Too often, when people want to buy, they are in a big hurry to go out and look at homes; it’s an exciting time and they want to jump right in. However, it’s key to take a look at financing before you start getting excited about homes. There’s nothing worse than falling in love with a home only to find out you can’t afford it.

So, before you get out there and look at homes, don’t forget to figure out what your monthly payments are going to look like! Don’t hesitate to reach out to us. We would love to help you!

What Should You Avoid When Purchasing A New Construction Home?

Are you thinking about building a new home from scratch? If so, take note of these three things you need to avoid! We have a lot of experience in new construction properties and would love to make the process as smooth as possible for you.

1. Hire a Realtor. An experienced Realtor knows what to look for when buying any type of property. Sure, the new construction builder has a Realtor on site, but that agent is only there to advocate for the seller. For guidance and representation, you need to hire a Realtor who will advocate for you! If any issues arise, you'll have someone there to help you understand what your options are.

2. Do your research. This comes back to hiring a real estate professional, as they will know exactly what to look for. For example, an agent will look at property taxes for you, one of the most important things to keep in mind while building a new home. You need to know exactly how much you are going to be paying in property taxes in order to avoid overextending yourself financially.

3. Find a trustworthy lender. We will make sure you know exactly what rates and fees you'll be dealing with ahead of time so that you can select the program that will best fit your financial needs.

If you decide to hire a Realtor, make sure you are comfortable with them. You should be able to call, text, or email them at any time in order to stay on the same page and ensure you're both working toward the same goal. If you have any questions about finding the right agent or avoiding common new construction mistakes, we would love to hear from you!

Six Reasons To Buy A House In The Fall

The end of summer typically means fewer “for sale” signs. However, whether you’re a buyer or a seller, don’t fret. This can be great news for the following six reasons:

1)      Less Competition. Fall means that school is back in session. AKA most families who wanted to move into their new home before school started have already done so.

Reason this is good news for buyers: Less homes for sale, plus less families, equals out to the same chances (or better) than you had before.

Reason this is good news for sellers: The buyers who are still in the market are typically more serious about purchasing (versus those in a rush to find a new home before August) which will make your job much easier.

2)      More money in your pocket. Those who close escrow before December 31 may get a nice write off on their taxes.

Reason this is good news for buyers: You can take deductions for your whole years’ worth of income from property tax and mortgage interest. Any payments that you have made before your closing is final are tax deductible.

Reason that this is good news for sellers: Closing costs and home improvements may be eligible for tax write offs. There is an entire list of possible write offs for sellers here.

3)      Nothing like being home for the holidays. Buying or selling in the fall means that you can sit back and relax in your nice, warm home when the winter weather and holidays hit.

Reason this is good news for buyers: Do we have to explain? You’re gifting yourself a new home for the holidays! Plus, since less people tend to move around this time, that means easier access to movers, etc.

Reason this is good news for sellers: Again, do we really have to explain? A sold home means less stress off your plate for the holidays! Check THAT off the to-do list.

4)      This one’s just right. Home prices will be more accurate in the fall than they are in the spring or summer. Since there is a smaller market for houses, prices won’t be raised due to demand.

Reason this is good news for buyers: Your chances of overpaying or having to outbid someone for your home is greatly lessened.

Reason this is good news for sellers: If you’re smart about your asking price, your home will stand out in the crowd and your chances of selling will greatly increase. Plus, gone are the days of trying to perform renovations in order to raise the value of your home. Put that hammer down and grab a cocktail instead!

5)      Fall = less burglaries. Did you know that burglaries happen more often during certain times of the year? July and August are the months during which most burglaries take place.

Reason this is good news for buyers: You can rest easy knowing your home is safer while you are moving in. It also gives you time to set up that new alarm system.

Reason this is good news for sellers: Your home is safer from theft. Again, do we really need to clarify this one?

6)      Deals and sales. Are you thinking, “we have this extra bedroom now but, no furniture for it!” Good news for both buyers and sellers: Black Friday and other holiday sales are right around the corner. Now that you’ve moved into (or sold) your warm, accurately priced, safe home, it’s time to shop and enjoy the holidays!

Give us a call when you’re ready to start the process!

Renters And Homeowners Agree: Now Is A Good Time To Buy

The share of current renters who believe that now is a good time to buy has jumped to 62 percent. That’s a two percent increase from this time last year and a 10 percent increase from last quarter.

Homeowners agree, saying that 80 percent of higher income households within the Midwest and Southern regions are optimistic about buying a house. Eighty percent of homeowners also believe that now is a good time to sell. That’s a 13 percent jump from this time last year and a five percent increase from last quarter.

So why does the housing market seem to be at somewhat of a standstill? The issue is not with the amount of buyers, but rather with the amount of homes for sale. Potential buyers are also intimidated by down payments, considering the housing market prices are incessantly rising.

However, there are reasons to remain optimistic. One reason being that the economy is continuing to improve. “Jobs are plentiful, wage growth is finally showing signs of life, home values are up considerably in the past five years and the stock market is at record highs,” says Lawrence Yun, NAR chief economist. Overall, most potential buyers think that their financial situations will improve within the next six months.

Still intimidated by rising house prices? Ask your relatives or employers. We offer loan programs that allow you to use “gift money” to buy a house. However, be prepared to provide a letter from the gift giver stating that it is, in fact, a gift, not a loan. We may also need a bank account statement from the giver.

Not comfortable with that? You can also take money from your 401k or IRA. Some accounts even let you pull this money out for free in order to use the funds as a down payment.

Our best advice? Adjust your budget. Owning a home will save you money overall, so saving extra money in the meantime will help you in the long haul.

When you’re ready to take that next step, give us a call! We can also offer advice on how to afford your dream home.

The Most Common Buyer Mistakes

Today we will be talking about some common mistakes that we often see buyers making. Hopefully, by alerting you to these potential downfalls, you can avoid them yourself when it comes time to buy. Here are the 5 most common mistakes we’ve been seeing:

1.  Not getting pre-approved

Getting pre-approved by turning in all of your financial documents to a lender is essential. Without one, your offer won’t be as good in the seller’s eyes, and you really have no idea what kind of home you can actually afford. A pre-approval gives you a great view of your financial picture.

2. Bidding aggressively on the perfect home

If you find the perfect home, that is not the time to bid aggressively. If the home is in good condition and appears to be priced correctly, bid closer to that price. Look to your Realtor for pricing guidelines.

3. Not bidding on the perfect home when they have the chance

If you have the chance to make an offer on your dream home, do it. You’ve got 10 days to do your due diligence on the home to make sure it actually is the perfect one for you. If it’s not, oh well. At least by making an offer, you have a chance to get the home. If you don’t make the offer, you may miss out on it, which has happened to a lot of our clients.

4. Expecting the home to be perfect

Understand that the home is complex. People have lived in it and there is always going to be a little wear and tear on any home. Usually it’s nothing major, just little cosmetic things. The important thing is making sure the home is structurally sound.

5. Not understanding their mortgage

Sometimes buyers don’t realize how much money they actually need until the last minute. We, the lender, will go over the actual costs with you, so you know exactly what you are going to have to have on hand as far as cash goes.

If you have any questions for us about this topic, or if you are thinking of buying a home yourself, give us a call or send us an email. We look forward to speaking with you!

Can You Really Trust Zestimates?

Today we are talking about a topic we get a lot of questions about: Zestimates. Zestimates are Zillow’s automated home value system that will tell you what your home could sell for in the market. Is this the best way to determine value, and should you trust it? The answer is maybe, but it might not be a good idea.

Zillow themselves have disclosed that their Zestimates can be anywhere from 5-15% inaccurate. They use a basic algorithm to determine value that takes into account square footage, bedrooms, and bathrooms, but not much else. They also use sales data from their site, but that is often inaccurate as well.

So please don’t look at your Zestimate as the exact figure your home will sell for. To truly determine your home’s market value, you need to hire an agent who has boots on the ground and understands what buyers are looking for.

There are a lot of things that go into determining your value that aren’t calculated in Zillow’s algorithm. Things like absorption rates, inventory, and interest rates can all change from one price range to the next.

With that being said, there are a lot of agents out there that don’t have a ton of experience. It’s easy to get your real estate license, but it’s much more difficult to get to the point where you have the experience needed to accurately assess the value of the home. Agents should do a pre-appraisal to get yet another valuation for your home.

So, be careful on Zillow, and don’t make your decisions based on that valuation. If you have any questions for us or are looking to buy or sell, give us a call or send us an email today!

The Best Place To Start Your Home Search

Today, we'll discuss how to effectively and efficiently start shopping for your next home. After you're pre-approved and have your criteria figured out, what do you do?

There's nothing wrong with taking a Sunday afternoon drive in an area where you want to live and start calling the Realtors on the For Sale signs. However, that's not the most effective way to go about your home search, and with the price of gas these days, it can be very costly.

Most people begin searching online, using sites like Zillow or Trulia. While these sites provide a lot of information, I recommend using your Realtor's home search site. The Realtor's site will have a live feed to the listing service.

Other sites just give you a snapshot of homes on the market at one point in time, and don't update often enough. Some properties listed on Zillow or Trulia actually sold two and a half years ago! If you want to use the most updated and accurate resource, use your Realtor's website.

When looking for a home, you also need to know if it's a buyer's or seller's market. It's extremely important to understand the dynamics of the market you're in so that you know what to expect in your own transaction. A seller's market has low inventory, and the seller has more power. A buyer's market has high inventory, and the buyer has more control of the transaction.

The last thing I want you to keep in mind is to never write an offer until you see a market analysis from your agent. Don't assume that the seller has priced their home based on current market dynamics. Some listing agents go along with whatever the seller wants to price the home for just so the agent can get a listing. You want to make sure the home is priced correctly so you don't overpay.

If you have any questions, give me a call or send me an email. I look forward to hearing from you!

The First Step In The Home Buying Process: Getting Pre-Qualified

Have you ever wondered what the first step in the home buying process is?

Before you even start looking at homes, the first thing you need to do is get pre-qualified. The process is simple! Just give us a call, talk to us about what you want to do, and then we will take your personal information, income, and assets to figure out what kind of loan you will qualify for.

A pre-qualification is different from a pre-approval. The pre-qualification is more of a preliminary step. A pre-approval is when the we go through and verify the information you provided during the pre-qualification.

The documents you need to provide to the lender include 30 days worth of paystubs, your W-2s from the last two years, two years of tax returns if you have investment income or are self-employed, bank statements from the last two months, and a photo ID.

 

The whole process lasts about 30 days from getting approved to taking the loan to closing. You may even qualify for more than what you can afford. We allow you to borrow as much as our guidelines will allow, but that might be more than you can afford. Budget out your monthly mortgage payments in order to know what you can actually afford to spend on a home.

As always, questions, please don't hesitate to reach out. We look forward to hearing from you!

How Home Inspections Benefit Buyers And Sellers

Today, we'll discuss the home inspection process. The home inspection is a crucial part of the process for both the buyer and the seller, although it is designed primarily to protect the buyer.

When you're looking at a house, you want to be able to focus on whether or not it's the right house for you. You don't want to worry about the nuts and bolts of the home. Once you have your house under contract, there will be a contingency that allows you to have an inspector examine the nuts and bolts for you.

Inspectors keep an eye out for safety concerns and things that will affect the home value. The inspector will climb up into the attic and check insulation, and look out for wiring issues as well, among other things.

It's important to choose the right inspector. You want someone thorough, but also someone who won't cause unnecessary alarm. If there is a major issue with the home, and the seller won't fix it, you do have the option to back out of the house.

From a seller's standpoint, it's important to understand that you should designate some money for inspection repairs. No house passes an inspection 100%. An inspector will find something, and it's smart to have a budget set aside. Some sellers even have an inspection ahead of time so that they can make the repairs before an offer has even been made.

The most important thing is to choose the right inspector. Listen to your real estate agent, because they will have an inspector they know and trust to work with you. If you have any questions, give us a call or send us an email. We look forward to hearing from you!

What Are the Benefits Of Working With A Local Lender?

We have been in business for over 20 years here in Atlanta and are local. If you want to close your loan on time, it's best to work with a local lender, like us! We have local staff and will ensure your deal gets closed on time.

Availability is the most important aspect of any company’s customer service experience. If you have questions or needs about your loan, you can call, text, or email your agent, even if it's after hours. They are available when clients are out looking at houses and whenever else they are needed. Additionally, they explain the whole process, so that everyone understands exactly what they're getting into. Well, why should you expect any different from your lender? The answer is, you shouldn’t. You should receive the exact same respect and we pride ourselves on that!

One of the biggest changes in the lending world in over 20 years occurred on October 3. Things that have been around for 50 years are no more. You'll no longer hear about the Good Faith Estimate, which is replaced by the Loan Estimate, and there is no more HUD-1, as it has been replaced by the Closing Disclosure. In addition, new hard stops and timeframes have been instituted and have to be met before a loan can be closed. These changes are to ensure the consumer knows what their loan is before it closes and to make sure there are no surprises.

To make sure the process moves smoothly, it's crucial to understand that the days of closing a loan in 10 days are over. If you plan on buying a home, whether you're a first-time buyer or a luxury buyer, it's never too early to talk to a lender. You can reach us at 770-824-9777 if you have any lending questions. Or send us an email at skatz@vandykmortgage.com.

What Causes A Loan To Fall Through?

Today, we’re going to talk about why some loans fall apart before they get to the closing table. 

1.    Misinformation. Now, the client is not misleading anyone on purpose. Once you’ve made an offer on a home, we will start to verify the information you submitted for your pre-approval. Let’s say you have a catering business that you do on the side, and it’s on your tax return but you forgot to mention it to the loan officer. That could be the difference between the loan working out or not working out.

2.    Timely information. You will have to get a lot of information to the loan officer, to your agent, to home insurance companies, and more. It is important that you submit the information as soon as possible. If your loan officer asks you for pay stubs, get the pay stubs over that day or the next day. There’s a lot of things going on, so getting things in on time is crucial.

3.    Uncontrolled factors. Appraisals, CondoCerts, home inspections, and job loss are the main four. If the appraisal comes in low and the listing agent doesn’t want to negotiate, the loan could fall through. CondoCerts make sure the condo is warranted by Fannie Mae and Freddie Mac to protect the consumer. If you get a home inspection back and the repairs cost more than what you are approved for, the loan would fall through. If you lose your job, you could lose your loan if you don’t have an offer for another job.

One thing that is in your control is major purchases. Don’t go and buy a new car or a boat before you close on the home. The loan will fall through.

Any other questions or concerns? Feel free to reach out! We’ve got you covered.

How To Determine How Much House You Can Afford

Are you a first time home buyer? Are you trying to determine your budget? We (lenders) are more than happy to help you find your answer(s), but here are some tips to get you started:

One of the first things that you’ll want to look at is your credit. If you do not have any credit established, you’re going to need to start there. You can establish credit by opening up a credit card (for first timers, I have heard great reviews about the Chase Freedom Unlimited card). Once you’ve been approved, it’s going to take at least a few months to build up a credit score. They will start by allotting you a certain limit (example: you can only spend $700 a month). It is best to keep your utilization under 30%. Therefore, if your limit is $700, then try not to spend more than $210 a month on your credit card. Most importantly, NEVER be late on your payments. This will negatively impact your score in a big way. Another factor that will impact your credit is a loan (student loans, car loans, medical bills, etc.). This will be taken into account as well, which includes your payment history for each individual loan. Sites such as Credit Karma can help to give you an idea of your current score, however, your lender will pull a report that is much more accurate. Don’t be surprised if they are different.

The next item you will want to look at is your debt. As mentioned previously, this involves any loans that you currently have open in your name, as well as any unpaid credit card bills. Even something as simple as a medical bill can affect this. Have you ever had to go to the ER? Did you pay off every bill from that visit? Luckily, your credit report will show any delinquent bills that you may not be aware of. Make it a priority to pay off any debts in question.

Once you’ve built up a decent credit score and have paid off all your debts, you’re going to need to look at your salary. Lenders will only ask for your gross salary, however, you will also want to keep in mind some other important factors, such as: what your salary is after taxes, how much you spend monthly on bills, etc. To play it safe, you’ll want to use THIS number (what you get after subtracting bills, taxes, etc.) to ensure that your home purchase will not be putting you into debt. You will typically want to place your max budget as 3x your gross salary.

Lastly, you will need to save up for a down payment. If you search the internet, I’m sure that most places will say that you need 20% down. While 20% is ideal, most people on average only put 3-5% down. You will need a minimum of 3% down (unless you use a VA loan), but realistically, try to stick to 5-10%. Therefore, if you’re looking for a house that’s $200,000, then be prepared to put about $10,000 down (that’s 5%).

Feeling overwhelmed? Start here with Zillow’s free house affordability calculator. It might not be 100% accurate, but it can at least point you in the right direction.

Give us a call today! We can help you through the entire process, including helping you raise your credit score, offer financial advice, and everything in between! 770-824-9777

Home Purchase Process For First Time Buyers

Are you looking to buy your first home? Well look no further, because I’m here to walk you through the entire process!

Step 1: Determine if you are ready to purchase a house. This is something that only YOU can decide, however, here are two key points to keep in mind:

-          Why do you want to buy a house? Are you looking for a faster commute? Somewhere to plant your roots or start a family? These questions will also help you to narrow down specifics such as location, neighborhood, home style, etc.

-          Are you financially ready? This requires a decent credit score, a good bill payment history, a low debt-to-income ratio and money saved up for a down payment. Zillow and NerdWallet offer two basic affordability calculators, which will give you a good idea. For an exact estimate, give me a call! I can help. Low credit score? I can help with that too.

Step 2: Once you’ve determined that you’re ready, you’ll want a realtor. It’s important to find someone that you’re comfortable with and who you can trust. We have plenty of great realtors that we can recommend, so don’t be afraid to reach out!

Step 3: You will need to get pre-approved for a mortgage. That’s where I come into play! Most sellers in the Atlanta area require this, so give me a call today. I will be happy to walk you through the entire process.

Step 4: Look at homes. This is when you will start spending a lot of time with your realtor, which is why it is important to work with someone you trust. They will help you to find your dream home!

Step 5: Choose a home. Make sure to choose a house within your budget and desired location. Please note that people often have to make compromises during this process, such as a townhome versus a single-family home, the condition of the home itself, etc. Just make sure that you’re still extremely happy with your choice, as you will most likely live here for the next 3-5 years at least.

Step 6: Obtain your loan. This is where I come back into the picture. My team and I are dedicated to helping you every step of the way!

Step 7: Make an offer. Your realtor will be a great help during this step. Please keep in mind that you may need to make an offer slightly above asking price if the house is in a high-demand area.

Step 8: Buy home insurance. Typically, this is required and it is also something that I (your lender) will help you with. Options include:

-          Title Insurance

-          Homeowners Insurance

-          Flood Insurance

-          Home Warranties

Step 9: Closing. This is when everything becomes finalized and the house is officially yours! Final payments are made, paperwork is proofread and turned in, deeds and other documents are prepared, etc. You may want to walk through the home one last time to make sure that there were no additional material changes you were unaware of.

Step 10: Move in! The last and most exciting step. All that’s left is for you to move in and make your new house a home.

Let me help you to reach step 10! Give me a call today at 770-824-9777 or email me at skatz@vandykmortgage.com

Lending Misconceptions Keeping You From Buying Your Dream Home

Are you a renter who is looking to purchase a home of your own? If so, you've come to the right place!

Many of our clients have said to us that they wish they would have made their purchase years ago, instead of renting for a long period of time. With interest rates as low as they are, we want to encourage all the renters out there to buy now! Low rates mean you have more spending power as a buyer, which is perfect for first-time home buyers looking for the right fit.

Many potential home buyers are waiting until they save up for a large down payment to avoid paying Private Mortgage Insurance. The fact is, you don't need to have 20% down to buy. There are many great low down payment packages out there, such as FHA loans (3.5% down) or conventional loans with as little as 3% down. One of the most popular packages is a 5% down conventional loan with no mortgage insurance!

Nowadays, it's very common for people to monitor their credit. Many people don't want their credit pulled until they are absolutely ready to buy because they fear their score is going to be impacted. This is another misconception - there is no set formula detailing how much your score is impacted by being pulled. If you have pretty good credit as it is, the impact of having a lender take a look at it is going to be minuscule because you've already proven you can manage your own credit risk. If your credit isn't great, give us call and we can help you manage it a bit better.

If you have any questions about the minutiae of lending, or if you want more information about whether you're eligible for a home loan, please don't hesitate to reach out to us. Interest rates are at historic lows, so you don't want to miss out on your chance to make the dream of homeownership a reality!

What Are Loan Officers Asked Most Often?

The number one question that we get asked every day from potential clients is, “What is your current interest rate?”

If only that question had a simple answer. If it were as easy as just spouting off a percentage, you might not even need us. That’s because understanding and getting your interest rate is a process. Rather than quote you an interest rate, we like to spend a few minutes going over what exactly is involved in coming up with an interest rate. There are 4 important factors that determine your interest rate. They are:

1.    What is your credit score?

2.    What type of loan program do you want?

3.    What can you afford for a down payment?

4.    What type of property are you getting?

We want to help educate you and guide you in determining your interest rate. We don’t want to give you a quote on the phone by jumping to conclusions, only to have to backtrack what we said based on the information you give us. When you buy a home, you are making one of the most important purchases of your life, so you want to be able to trust the people you are working with. You also want to make sure you know what kind of home you can afford based on that information, so you know what kind of home you should be looking for.

If you have any questions for us, feel free to give us a call or send us an email. We look forward to hearing from you!

Raise The Roof! Fannie Mae Has Raised Their DTI Ceiling!

Have you ever been rejected for a mortgage due to your debt-to-income ratio? Or know someone who has? Well good news: starting July 29, Fannie Mae is raising the DTI ceiling to 50 percent! Currently, it sits at 45 percent.

Never heard of DTI? Debt-to-income ratio takes your gross monthly income and determines what percentage of that goes towards any debts that you may have – credit cards, loans, etc. including what your new mortgage payment would be. You can find a free calculator here.

No need to get alarmed quite yet if your ratio is higher than 50 percent. Fannie Mae, Freddie Mac and the Federal Housing Administration all have exemptions allowing you to buy or insure loans, even if you have a DTI above 50 percent.

Word of advice, however, high DTIs are viewed more critically by lenders than any other factor – including credit score. The reason is simple: more monthly debts = a greater risk of late mortgage payments.

Having a lower DTI does not mean that you’re automatically good to go, however. There are still several other factors involved in the approval process, such as your down payment, your credit score and more.

Want to find out what loan you can be approved for? Give us a call today!

Why Do You Need Title Insurance?

Today, we’ll talk about what title insurance is and exactly what you’re paying for.

Whenever I sit down with a borrower, they ask what fees they can expect when they’re getting ready to close. One of those components is title insurance, which can be kind of pricey, but is very important. The important thing to remember is that title insurance is a one-time fee that is paid for at the time of closing. Typically, this is mandatory, so that we know that the property is going to be free and clear of any liens or clouds on title.

After hearing that, you may think to yourself “I don’t need that, it’s just an extra cost.” You might think that your home is free of any lien or clouds on title, but your builder or neighbor may have liens on your property. For example, if you buy a house where a contractor did some work for a previous owner but it wasn’t paid, it could affect your ability to refinance down the road if there are liens against the property.

Another thing you need to be aware of is the TILA-RESPA Integrated Disclosure (TRIP). TRIP was established because of the Dodd-Frank Act of 2010, which was a response to the mortgage crash. The Dodd-Frank Act aimed at making sure buyers are aware of what they’re getting into and understand their financial obligations. This change affects all of us, but the worst of it is going to land on the lending side of things.

The thing that will affect you, the buyer, the most is once you get the closing disclosure, or settlement statement, which replaces the HUD-1 statement. If we, the lender, send the disclosure through the mail, you assume three business days for delivery and then three days for review prior to closing. For example, assuming you receive the settlement statement on Friday, it will be Wednesday before you can close. This means there will be no more last second closings, as the process has now been drawn out a bit.

Do you have more questions that we didn’t answer here? Feel free to reach out! We’re happy to help.

Why Is The Pre-Approval Process So Important?

Today, I’ll discuss the importance of the pre-approval process. The pre-approval process is imperative and essential to be completed prior to you making any offers. The listing agent and seller typically require a pre-approval letter to accompany your offer with the Realtor you work with.

This process can happen a couple of different ways. The preferred methods are to either do this in person or over the phone. You can also go to my website and fill out an application there. I typically conduct a follow-up call after you submit an application.

Ultimately, we need to ask you all the necessary questions. Depending on your answers, we can ask follow-up questions. By the end of the conversation, we will have a great loan profile for you. This allows us to email you a list of required documents.

We want a smooth escrow process. There’s nothing worse as a homebuyer to be running around at the last minute. We do all this work upfront. We can discuss rates and programs. We want to educate you at the end of the first conversation. We want to help you make the best decision for your situation.

We look forward to assisting you with your finance needs!

What Should You Ask a Buyer's Agent Before Hiring Them?

Are you thinking of hiring a buyer's agent? If so, there are questions you should ask to ensure you hire somebody you can trust. Here are a few to keep in mind:

●     Are you a full-time agent?

●     Do you work exclusively with buyers?

●     Do you have a team behind you?

●     Do you have testimonials from past clients?

●     Do you do a comprehensive buyer consultation?

These are all very important questions you should know the answer to, especially the last one. A comprehensive buyer consultation is a very important part of the buying process because it provides an opportunity for the agent and client to go over the client's wants and needs, set expectations for the process, and answer any questions they might have.

If you have any questions about the buying process, or if you would like to talk to one of our recommended buyer's agents, don't hesitate to reach out to us for a free consultation. We're always available to give you a hand!

Which Is Better: Higher Mortgage Or Paying Closing Costs?

Today we are going to discuss whether it is better to pay the closing costs in cash upfront or to take out a higher home loan. The difference could cost you thousands.

It’s very common for sellers to be asked to pay closing costs by the buyers, so keep this in mind. Let’s say you want to buy a home that’s listed at $100,000 and have made an offer of $97,000. If you want the seller to cover those closing costs, which could be up to $3,000 or more, you may need to come up on your offer a little bit. When it comes to your mortgage, a difference of $3,000 isn’t that big. It’s a few dollars a month on your payment. However, that $3,000 in closing costs is cash that comes immediately out of your pocket.

I’m not saying you have to pay full price just to get your closing costs covered, but if you are going to have a trade off of a few thousand on your mortgage or a few thousand more in cash in your pocket, it’s smarter for you as a buyer to keep that cash in your bank account than it will be to come up a few thousand on your mortgage. If you can have those closing costs set aside for a rainy day, you’ll be happy to have it when something inevitably goes wrong in your home.

If you have any more questions for us, or are thinking about buying yourself, give us a call or send us an email. We look forward to hearing from you!