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!