Posts with tag 'Financing tips'

Your credit score is more than a number; it is a reflection of your financial health and your ability to service your financial obligations. When you purchase a home, it is a number that is as important as your down payment, income, and assets. Our real estate agents don't want your deal to fall through because of a low FICO Score. Understanding the following can help you prepare your credit for one of the most important investments of your life.

How Lenders Use Credit Scores

Lenders view your FICO Score as a measure of your creditworthiness. The higher your score, the lower the fees and interest rates you will pay. That's because the higher the score, the lower the risk you pose to the lender. Conversely, if you have a lower score, you pose a greater risk and will pay higher fees and interest.

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Our real estate agents know viewing Atlanta homes for sale is an exciting experience! When you visit a new home, you open up a world of possibilities for the future. As exciting as it all is, it's vital not to overlook any of the important steps in the homebuying process. If you approach buying in a methodical way, you'll be more prepared – and more likely to get the home you want.

The most crucial thing many buyers forget about is pre-approval. In fact, you should take care of it before you even look at homes for sale.

What is Pre-Approval and Why Does It Matter?

Pre-approval is an essential step in getting a mortgage loan.

During pre-approval, a lender examines your finances in detail and determines exactly how much money you can qualify for in your loan package. The loan isn't finalized until you select a home, but you receive a letter from your lender showing that they are willing to extend a financing package to you.

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You had saved for the down payment and planned to become a first-time homeowner in 2020. And then just like that, the coronavirus pandemic turned the world upside down. Should you still go through with the purchase or put your plans on hold? Navigating the real estate world as a first-time buyer can be confusing and stressful. Add in a layer of the paralyzing stress and uncertainty of the pandemic, and you have many potential buyers with mixed feelings about taking the leap when things are looking grim.

The real estate market is a bit shaken by the pandemic, but you can still explore Atlanta homes for sale. To help you make an informed decision, our real estate agents have compiled a list of 4 reasons why now is actually a good time to buy a first home.

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You've looked at many Atlanta homes for sale and finally found one that you love. You probably can't wait to get started with the purchasing process. But you have to make an offer to show to make sure the seller takes the house off the market as you work on different closing aspects. Accepting an offer is a big commitment for a seller. If the buyer backs out of the deal, the seller loses a significant amount of money and time finding another buyer. This is where sellers request earnest money. Read on to learn what earnest money is, when to offer it, and steps you can take to protect your upfront investment.

Understanding Earnest Money

Earnest money is a deposit made to a seller as a good-faith gesture that you mean business when it comes to buying the house. It's a way of you showing the seller that you're serious about closing the deal. Sellers tend to favor these deposits because it gives them peace of mind to proceed to the next steps of the transaction. Earnest money doesn't go to the seller right away. Instead, it is held in an escrow account with an escrow company until closing.

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The mortgage loan application process is quite rigorous - one or several strikes against you and the loan officer decides that you don't qualify. There are many reasons why your request for a loan may have been rejected. Receiving a rejection letter can certainly be a disappointment. But rather than dwell on the unfortunate outcome, use it as a valuable learning experience and correct the problem. Our real estate agents share five possible causes for a mortgage loan denial and what you can do to improve your chances moving forward.

• Down Payment is Too Small
  A down payment shows lenders that you're capable of saving money, and you're serious about investing in your future home. So, a small down payment does little to put their minds at ease. Conventional loans require a down payment anywhere between 5% and 20% of the total value of a home. If you come up with anything less than 20%, chances are very high that you'll receive a denial or be required to pay private mortgage insurance.
  
  How to fix: Start saving early enough so you reach the 20% threshold when submitting your application or wait and give yourself time to save up the funds. You can also use a gift from a relative as long as no repayment is expected. Ensure you're transparent in documenting the source of the money. Finally, you can have the seller pay some of the closing costs.

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