The most important step for home buying in 2017!

The most important step for home buying in 2017!

The home buying process can be a long one, with many things that need to be done along the way. Obtaining a mortgage pre-approval first is a must in today's seller market, in Atlanta.  But many buyers don't really know the difference between a Pre-qualification and Pre-approval.  Here's what a mortgage pre-approval is, why it's important: 

A mortgage pre-approval is essentially the same thing as applying for a mortgage, just without a specific home in mind. You go to a lender, fill out their application, and probably pay an application fee.  The lender then runs a credit check, requests documentation about your income, assets, and employment history, and verifies all your information. They will then pre-approve you for a certain maximum loan amount, which is generally good for a specific amount of time (90 days seems to be common). You'll receive a pre-approval letter, which represents a firm commitment to lend you that amount of money for your home purchase. 

No prospective home buyer start the process without one.

For starters, a mortgage pre-approval makes a submitted offer much stronger. You're essentially telling the seller "Hey -- I'm a serious buyer and actually have the ability to buy this home." And that's a must especially you are buying a home under 200k.  Inventory is so low that multiple offers situation is the norm in this price range.
In addition, you'll know exactly how much house you can afford, so you can plan your home search accordingly. This way, there are no surprises when you fall in love with a particular home and then apply for financing, only to discover you can't afford it.
Also, you will be able to to get a better estimate of what your interest rate will be.  See this chart:

A pre-approval also lets you know where your credit stands while there's still time to do a little damage control. It can take years to have a big impact on your credit score, but it's certainly possible to boost your score by a few points in a few months. As you can see in the chart above, an increase of a few points can make a big difference in the amount you'll pay over the term of your mortgage.

A pre-qualification is not the same thing!!
Don't be fooled -- a mortgage pre-qualification is not the same thing as a pre-approval. Not even close. A pre-qualification is jsut an informal process (Sometime its just over the phone) where you provide a lender information about your debts, income, and employment situation verbally, and they tell you how much of a mortgage you should qualify for. It is not a firm commitment to lend, and therefore does not carry as much weight with sellers.  Do not accept any lender pre-approval or pre-qualification without the lender reviewing your income, asset and full Tri-merge credit information!  I have seen so many buyers lose thousands of dollar and time only to find out their loan can't be approval days before closing!!

A pre-approval is the home buying tool that you want in your pocket as you begin the shopping process.  Some sellers are even now require to see buyer's loan pre-approval prove before allowing home showing.  And most of the reputable real estate firms require a loan pre-approval for taking you on as client.  So be sure you're getting the real thing.

Contact me for a list of my trusted lenders in Atlanta, for a free complete loan pre-approval!



Source: Matthew Frankel

Home prices continue to rise last month in metro Atlanta, while the number of sales declined, according to the Atlanta Realtors Association.  In a report issued Wednesday, the group said that the median sales price of a home sold last month in an 11-county area was $239,000 – up 6.2 percent from the sale month of a year earlier. And here in the northern suburb up 7.2%.  However, the number of sales was down by that same percentage.  Compared to November, the median sales price was up 2.6 percent, the Realtors Association reported.

A big part of the explanation for the market is the shortage of inventory – that is, the number of homes for sale. That supply of homes for sale was just 3.1 months, less than half of what is considered the inventory in a healthy, balanced market.  “Low inventory continued to be an issue for Metro Atlanta throughout 2016,” said Bill Rawlings, president of the Atlanta Realtors.

Gwinnett county accounted for the most transactions during December – 893 – although Fulton led the way on price. The median price for a home sold in Fulton was $324,000 and the average was $432,000.  The calculations were made by First Multiple Listing Service.  Overall most experts anticipate homes sales and values will continue to increase, but at a slightly slower pace. It is likely that mortgage rates will continue to rise. 

                                                                                                             Sourced from AJC  

Why buy home in January

Spring and summer are historically the most popular times to buy a home, especially here in Atlanta.  The weather is warm, inventory is high and the school year is winding down or done. But those who shop during this peak buying season also face more competition and higher prices. In this Seller's market, buyers willing to brave the colder weather can benefit in multiple ways by purchasing a home now.

While winter homebuyers generally encounter a lower inventory, a September 2016 NerdWallet study found that they have the advantage of less competition. Additionally, the study showed that home prices in January are typically the lowest they’ll be all year. And in 2017, with a likely increase in mortgage rates on the way, there are several reasons why January is the best time to buy a home.

PRICES ARE LIKELY TO ONLY GO HIGHER

Home prices in January typically take a dip compared with the summer buying season. In its report, NerdWallet analyzed two years of Realtor.com data for the 50 most populous U.S. metro areas and found that in January and February, home sales prices were 8.45% lower on average than in June through August.

The outlook for January 2017, though, is a little different after an abnormally strong fall housing market nationwide, says Jonathan Smoke, chief economist at Realtor.com. Even though the summer seasonal cycle was still in play in 2016, he says, sales in October and November were much stronger than average, and housing prices in January haven’t dropped as much as in past years.

“[Home] prices are likely to increase even more than you typically see in spring because of low levels of inventory and because we didn’t see the normal weakness we see in fall,” Smoke says.

LESS COMPETITION

Home prices may not have taken their usual dip this January, but Smoke says it’s still a favorable time to buy due to the ratio of inventory to sales — the number of homes on the market compared with the amount of competition. In 2016, there were almost twice as many people buying in June as there were in January, he says. This is in line with NerdWallet’s analysis of data from the previous two years, which found a 47% drop in sales in January when compared with July in the 50 largest metro areas.

Home inventory, meanwhile, doesn’t vary as much as price throughout the year, Smoke says, noting that there were 21% fewer homes on the market in the winter months of 2016 than in the summer.

“You basically face almost half of the competition with almost the same amount of inventory in the market,” Smoke says. This potentially means fewer homes with multiple bidders and more room for negotiating with sellers.

During nonpeak homebuying periods, there also tends to be a larger discrepancy between listing prices and sale prices, according to NerdWallet’s analysis. This can mean hidden savings for buyers. The September 2016 study found that in the previous two Januarys, the median home sold for $7,003 less than the listing price.

MORTGAGE RATES EXPECTED TO RISE

After hitting historic lows, mortgage rates started rising in fall 2016. This year, economists expect additional rate increases, which means higher monthly payments for future homeowners.

“As we look toward spring and later in 2017, that’s another reason to buy in January and February,” Smoke says. “Because rates are expected to be about 50 basis points, or half a percent, more as the year goes on.”

With mortgage rates likely the lowest they’ll be all year — and with lower prices and less competition — January is an ideal time to make your bid.

Sourced from NerdWallet.