Mortgage Information
Pre-Qualified Versus / Pre-Approved, When Purchasing A Home In North Atlanta
March 1st, 2015 categories: BUYERS only, Mortgage Information, Real Estate Forum
Looking for a home without being pre-approved?
As a potential buyer putting an offer in on a property, you’ll have a better chance of getting your offer accepted by being as prepared as possible.
The benefits of being pre-qualified and/or pre-approved can be easily understood when viewed from the seller’s perspective. Imagine you’re a seller in receipt of 2 offers to purchase your property. A complete stranger (buyer) is asking you to take your property off the market for at least the next two to three weeks while they apply for a loan.
As the seller, lets consider the type of buyer you’d prefer to deal with:
1-Neither pre-qualified nor pre-approved – This buyer provides no evidence that they can afford to purchase your property. You may wonder how serious they are since they’re not at least pre-qualified.
2-Pre-qualified – This buyer has met with a mortgage broker (or lender) and discussed their situation. The buyer has informed the broker regarding their income, expenses, assets and liabilities. The broker may also have seen their credit report. The buyer provided you with a letter from the broker stating an opinion of what the buyer can afford.
3-Pre-approved – This buyer has provided a broker written evidence of income, expenses, assets, liabilities and credit. A lender has verified all information. As a result, much of the paperwork for this buyer’s loan has been completed. This buyer will probably be able to close quickly. They provide you with a letter (pre-approval certificate) from the lender. You’re as certain as possible that this buyer can close.
As a potential buyer, you can see that being pre-approved will give you the best chance of getting your offer accepted. This is critical in a competitive situation. As a buyer, you never want to lose “The One” simply due to the fact, ducks were not in a row.
Feel free to Contact me, Deborah Weiner with RE/MAX ON MAIN, Contact Us for contact information in assisting you in getting pre-qualified and enjoying “Your Journey To Home”!
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Update On Government Shut Down And How Banks Are Requiring The IRS 4506 Document
October 11th, 2013 categories: Month to Month, Mortgage Information, Real Estate Forum
Banks have adjusted their policies and will not close purchases without the IRS 4506. Some banks will require a signed document from you (buyer) indicating you understand a 4506 will be required after closing. Recall the 4506 is the document the IRS provides banks confirming that the tax returns provided to the bank by you actually match what was filed with the IRS. Below are generic rules banks are following depending on your specific situation…
Conventional, FHA and VA W-2 Borrowers
Banks will underwrite and close Conventional, FHA and VA W-2 borrower loans prior to receiving the 4506 transcripts.
1. A written VOE in addition to standard documentation and verbal VOE will be required. VOE is a verification of employment. The bank will contact your employer to verify certain information in writing as well as verbally.
2. The 4506 IRS transcripts will be obtained after closing.
Self-Employed Borrowers
Banks will underwrite and close self-employed borrower loans after receiving 2012 and 2011 complete personal tax returns signed by self-employed borrower(s).
1. Underwriting may require additional documentation to support tax returns (i.e. business tax returns, cancelled check made payable to the IRS for taxes paid or proof of refund).
2. Proof the self-employed business currently exists and is in operation will be required.
3. If the borrower filed a 2012 extension, a copy of the extension and a signed Profit and Loss statement for 2012 and YTD 2013 will be required.
4. For salaried borrowers, the most recent two years personal tax returns may be required.
As always call your lender with any questions!
Max A Kallos
404-277-5884 phone
678-298-8947 fax
[email protected]
recognized in ‘Atlanta’ Magazine as a Five Star Mortgage Professional endorsed by Emmy winning consumer advocate Dale Cardwell!
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What Is Pre-Approval And Why Is It An Important Place For The Buyer To Begin
August 29th, 2013 categories: BUYERS only, Mortgage Information, Real Estate Forum
Pre-approval allows a lender to get a high level picture of your financial world. The loan application is the starting point. There should NEVER be any cost or obligation to apply with a lender! If a lender is trying to charge you ANYTHING to apply…find another lender!
The loan application covers everything from income to assets as well as past credit history. Loan application allows the lender to pull your credit. Banks today look to meet 3 criteria…
1. Income: is income at a sufficient level to qualify for the loan?
2. Assets: do you have the required assets to purchase a home?
3. Credit: do your scores meet minimum guidelines?
You must meet all 3 in today’s environment to qualify for a loan. The loan application covers all 3 items. The pre-approval makes the presumption that data provided by you is accurate. This means that we presume your income, etc is what you state on the loan application. Typically income and assets are verified AFTER pre-approval as confirmation of the information you supplied on the loan application. If you are self employed OR in sales (commissioned income) the pre-approval may require tax returns up front so that income can be confirmed. This is because often times self employed and sales people take massive tax deductions which effectively lowers their adjusted gross income.
A loan application typically takes 5-10 minutes to complete. Pre-approval typically takes less than 1 business day. More often than not the process can be completed within a few hours. IE if you send in the completed application at noon…we’ll typically have you pre-approved same business day. Once pre-approved lenders will typically ask for you to start sending in data; tax returns, W2, bank statements, etc. A question we often get is: “should we pull my credit now even though I haven’t looked at homes yet?” The answer…YES! You want a lender to look at your credit well in advance of buying.
Credit reports are notorious for having errors on them. If something turns up that you weren’t aware of, now we have plenty of time to correct it. If you wait until you sign a 30 day contract you may be in for some big surprises. Trying to correct credit issues quickly is tough to do especially if you will need a credit re-score. You can also have multiple lenders pull credit within a few weeks of each other. What you DO NOT want to do is apply with different lenders every 30-45 days over the course of 4+ months. That can damage your credit scores potentially.
The bottom line is a pre-approval should be free and with no obligation to the lender. It should also be quick and painless. Pre-approval is important as it will help you understand what you qualify to buy, options that exist, and the terms associated with the payments.
Feel free to contact:
Max A Kallos
Lic. # 170267, NMLS# 156311 404-277-5884 phone
678-298-8947 fax
Contact Max Kallos
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First Time Home Buyer Mortgage Info.
June 19th, 2013 categories: BUYERS only, Deborah's Scrapbook, Mortgage Information
First time home buyer?
Some things you should know and consider before making one of the biggest investments and decisions in your life!
Credit scores are a big factor in getting a home mortgage today. We advise clients to be above 640 before aggressively looking for a home. Why 640? 640 is the lowest score most banks offer Before major increases to mortgage interest rates and most banks won’t lend under 640.
You want to wait until you get to 640 before applying.
Banks use your middle score. So your high score and low score are “thrown out” and the middle score is the score used to price your loan and qualify you.
How to Improve Scores? In general you want to have no more than 1-2 credit cards. You should never charge more than 50% of the total allowable spending limit at any time. So if your total limit is $10,000 on a credit card, never spend more than $5,000 on it and make sure you pay it down each month.
Everyone wants the white picket fence home. There are a lot of details to discuss, so simply give us a call or check out
our website page at www.NorthAtlantaMortgage.com for more info.
Until then, check out the current rates as of 6.19.13.
Rates are still great and we’re closing purchase loans in under 30 days no sweat!!!
30 year fixed: 3.875%
15 year fixed: 2.875%
30 year FHA/VA: 3.25%
30 year JUMBO to $1,000,000: 4.375%
Contact Liberty Home Mortages LLC For More Info.
[email protected]
404-277-5884
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