Posts Tagged ‘preapproval letter’

Moving to the suburbs?

June 16, 2020

Another change in sentiment from Covid is the possibility of people moving from the city and into the suburbs. A recent Harris poll stated about a third of those surveyed are considering moving to the suburbs in light of the pandemic.

Larger lots… more green space… less population density… easier to get to grocery stores… these are essential items for those surveyed considering moving out from the city. Couple this with the my recent post detailing an increased desire for dedicated home office space, we have definite trend changes in home buying due to Covid.

Homes are going fast right now. I’m seeing my clients getting under contract on homes just hitting the market. How does one set their offer apart from such a competitive field. Consider either:

  1. Making a non-contingent offer. If one qualifies to carry two mortgages, it makes the offer more appealing to the seller when they see the offer to buy their home is not contingent on the sale of the potential buyer’s home.
  2. Getting pre-underwritten. Using a “TBD” underwrite strategy is great for potential offers. The seller knows the potential buyer’s credit file (credit score, income, assets) has been reviewed and approved. This gives the seller more confidence the potential buyer’s offer will close.

Using either one (or both) of these options can set an offer apart from others in such a crowded market.

The purchase market is definitely hot right now. If you are buying in the state of Georgia, contact me today. We can get you prequalified and on your way to a “TBD” underwrite to help make your offer more competitive and stand out in the crowd.

Pandemic baby boom?

May 26, 2020

Recent comments coming from the Mortgage Brokers Association point to another potential increase to housing demand. The theory is pretty simple based on most of population being asked to stay at home:

  • toward the end of this year/early 2021, there will be a baby boom.
  • there will more than likely be an uptick in divorce filings.
  • many families will want homes with better home office space.

If extremely low inventory wasn’t frustrating enough, the market could see even more buyers coming into it for the reasons listed above. How can one make their offer stand out in such a competitive market?

As mentioned on this blog in previous posts, the best way to make an offer on a home is with a credit approved offer letter. Simply apply for the loan with a “TBD address.” We’ll collect bank statements, pay stubs, tax returns, and submit the file for an underwriting review.

Once approved, the offer letter to the seller will say the file has been reviewed and approved by underwriting. All in the way of getting a loan approval is an appraisal, home insurance, and clear title. Doing this will set your offer apart from others.

Ready to buy in the delayed but not hopping spring market? Want to set your offer apart from others? If buying in the state of Georgia, contact me today! We can get started, pre-underwrite your file, and help you make a strong offer to purchase your next home.

Will home values drop?

May 12, 2020

Will home values drop? Many, many people want to know as the housing market is a major economic indicator for the U.S. If a recent survey conducted by the National Association of Realtors (NAR) is true, we may not experience much of a decline in values.

While home buyers hope values will reduce given the Covid-19 situation, the NAR survey seems to indicate values will hold steady for a few reasons:

  • available homes for sale are lower than normal due to the pandemic impact on the market. A lower supply of homes will mitigate a dramatic drop of home values.
  • NAR expects the normal Spring market activity will shift to later in 2020 as the country/economy/our lives/etc. shift back toward “normal.”
  • with forbearance and most people who filed for unemployment benefits in the “furlough” and not “laid off” category, there is not the concern over high numbers of foreclosures.

So far sellers are holding firm to their list prices with roughly 70% saying they have not lowered prices to attract buyers. About 60% of sellers in the survey admit Covid is only delaying them selling their home this year at their originally intended list price.

In the same survey, about 60% of buyers felt home values would drop due to less competition of people out looking to purchase homes. While the demand for those looking may be down, the supply of homes is also down. As I mentioned earlier in this post, the lack of available homes may mitigate any drop of home values.

What should a buyer do? This is a national survey, so let me address more of the local market.

My advice to buyers is always this… if you find the home meeting your needs, go ahead and make an offer on the home. You cannot always count on the next home being there, or hoping values drop, or hoping mortgage rates stay low. If the home is the right one, go for it!

Buyers are heading back out into the market place. Over the past two weeks, I’ve had several clients go under contract to purchase their new home. The homes under contract went for near, at, or more than the list price. Some of my clients were involved in multiple offer situations.

In other words, in metro Atlanta, it appears recently listed home values are holding and buyers are headed back out into the market. I had one agent tell me there is one home for every three buyers in the metro Atlanta market. If the statement is true, it is still a seller’s market and home values may not come crashing down as some hope (at least not in the near term).

Looking to get out into the delayed Spring market? The housing market is coming back to life! If you are buying in the state of Georgia, contact me today! We can get you prequalified in a few minutes, and you’ll be ready to purchase your new home!

New FHA max loan limit

January 8, 2019

Just as conforming loan limits rose again this year, the maximum loan amount for FHA loans got a bit higher too.

Remember the maximum loan amount for FHA loans vary from county to county; meaning, the max loan amount is determined by the county in which the property resides.

  • The new FHA loan limit for 2019 is $379,500 for the metro Atlanta area.
  • The non-metro max loan amount also increased to $314,827.
  • Georgia also has some counties with max amounts between those ranges (for example, Clarke county is $341,550).

For those who want to see their specific county, use this lookup tool provided by HUD. Just choose your state and county then press “send” to get the exact amount.

The new limit for metro Atlanta counties means a buyer could purchase a $393,000 home and make just a 3.5% down payment. Buyers can look to purchase a home for more than $393,000, but they will need to make a larger down payment. For example, a person could buy a $400,000 home using an FHA loan. Since the max loan is capped at $379,500, the down payment will need to be about 5% instead of the minimum 3.5%.

I know what you may be thinking… why put 5% down and use an FHA loan? Wouldn’t a conventional loan be better? True. Maybe. Remember for those with credit scores under 680 who make a 5% down payment, the private mortgage insurance for a conventional loan is higher than the monthly mortgage insurance for an FHA. Also, the mortgage rate is higher for the conventional loan versus the FHA loan.

This is why it is imperative to speak with a licensed mortgage lender about the differences in loan programs instead of assuming an FHA loan is only for first time home buyers OR never consider an FHA loan if you can make a 5% down payment. The specific details of each client’s situation could make one program more attractive than the other even if it goes against what most people would consider normal.

Looking to purchase a home in the state of Georgia? Unsure of the loan program that is right for you? Contact me today. I can get you prequalified for a home loan in a few minutes, and we’ll discuss the pros and cons of each loan program to ensure the best fit for your situation.

Conforming Loan Limits going up!

December 5, 2017

For the first time since 2006, there is a significant increase in the conventional loan limit. The new maximum loan amount for conventional loans will be $453,100. Technically there was an increase from 2016 to 2017 (from $417,000 to $424,100, which is less than a 2% increase). This time the maximum limit gets a more significant increase.

What does this mean?

Buyers can purchase a $477,000 home with only a 5% down payment. If using a 3% down conventional loan, then the buyer can purchase a home as high as $467,000 in value. Prior to the increase, if a buyer wanted to purchase a home at $500,000 and avoid a Jumbo loan, then the down payment needed to be 15% to get the loan down to $424,100. Now a $500,000 home can be purchased with less than a 10% down payment.

This increases the purchase power for home buyers, and these new conventional loan limits can be used now! The start date for the conforming loan limit increase is January 2018, but the loan process can start today and close after the start of the new year!

Looking to buy a home in the state of Georgia? Wanting to use a conventional loan to purchase $500,000 or so home using a small down payment? Now you can! Contact me today and we’ll get going on your new home!

 

Competing in a seller’s market

April 18, 2017

By now I’m sure everyone is aware it is a seller’s market right now. In metro Atlanta, there is less than a 3 month supply of homes available to purchase. For a balanced market, it is good to have close to 6 months of homes available. This is a big change from a few years ago when it was a buyer’s market… low ball offers, take time looking, find the absolute perfect home. Today when making an offer, the initial offer starts at the list price. You better get to a property within day or two of it being listed or it may be under contract, and buyers are making compromises on a home. If the home has, say, 80-90% of what they are looking for in a home, make an offer!

Even with those strategies, buyers can still find themselves being one of many offers on a home in this crowded real estate market. How else can a buyer differentiate themselves from the competition?

                              How some home buyers feel in this market!

One way is being underwritten prior to being under contract on a home purchase. I can start the loan process, send out loan docs, collect financial docs, and submit to underwriting with a “To Be Determined” property address. Once out of underwriting, I can give a letter to my clients for an offer that says “Approved”…. not a prequalification letter… not a preapproval letter… a letter that says the buyer is approved for the purchase pending the appraisal. The buyer can also close in as little as two weeks. We only need the appraisal back at that point!

Looking to buy a home in Georgia? Having problems differentiating yourself from other buyers in this crowded market? Contact me today. I can not only help you get prequalified, but we can submit your loan to underwriting for an approval on the loan. That will give you a major advantage over buyers with a letter that says “prequalified” or “preapproved.”

A Special Offer from Dunwoody Mortgage

February 19, 2015

blog-author-paulbusino

Thank you for completing our home buying educational series. To show our commitment to you, there is a special offer. Watch the video for more details.

 

Link for online questionnaire: http://vid.us/wmik9g

To contact any of us at Dunwoody Mortgage Services, click here!

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Loan Application and Prequalification

February 17, 2015

blog-author-clayjeffreys3

Almost finished with our first education series. Today we are moving into completing the prequalification process. To show Realtors and home sellers that you are a serious, qualified buyer, you will want to obtain a pre-qualification letter. This letter from your lender shows that you have been prequalified to purchase a home up to a certain price point. When you get prequalified, you are basically completing a loan application. Here are the details.

To contact any of us at Dunwoody Mortgage Services, click here!

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