What You Need to Know Before Buying Your First Home

What You Need to Know Before Buying Your First Home

Posted on May 27, 2014 by admin 

 

Last week, we introduced our two-part series about first-time homebuyers with “Are You Ready to Buy Your First Home?”, a look inside the factors that indicate if hopeful homebuyers are ready to make the plunge. This week, we discuss a few things that you need to know as a first-time homebuyer.

Shaun Graham, Vice President of Southeast Mortgage

 

Do I need to be pre-approved for a loan?
A “mortgage pre-approval” is a written statement from a lender indicating that the borrower will most likely qualify for a loan at a certain rate based on income and credit information. However, the pre-approval doesn’t guarantee the loan or the rate quoted.
Though the loan isn’t guaranteed, there are multiple reasons why you should obtain pre-approval. Sellers and Realtors are more likely to engage with someone that is seen as a credible buyer and stands out in a competitive market. The pre-approval will also offer you an idea of what kind of house you can truly afford given the rate.
If you aren’t able to secure pre-approval the first time around there are things you can do to secure approval in the future, including striving to improve your credit score, decreasing your debt-to-income ratio and working toward a more substantial down payment.

What should I take with me with when applying for a mortgage?
With 2014 being labeled as the “year of documentation” by HSH , consumers will need to be extra-prepared with their paperwork when applying for a mortgage. Even if you’re not a first-time homebuyer, the necessary documentation will be new to you if you haven’t applied for a mortgage in the past five years. To satisfy mortgage lenders you will need:

• Photo identification
• Tax returns from the last two years
• Two recent pay stubs
• Bank statements from the last two months
• Proof of homeowner’s insurance
• Rent or utility checks. First-time homebuyers will need to prove they have a history of making payments on time.
• Verification of position and salary
• List of credit card accounts and amount owed on each
• List of assets such as bonds or stocks

Other forms may be need to be provided on a case-by-case basis such as 1099 forms if you are self-employed, gift letters and a signed sales contract after making an offer on a residence.

 Do I need a Realtor?
Having a Realtor is an invaluable asset when shopping for a home as outlined in our previous column “Why Enlisting a Realtor’s Assistance is Still a Necessity for Buyers.” Contracts, often up to 50-pages long, and negotiations can be extremely tricky whether it’s a buyer’s first home or fifth home. Contrary to popular belief, Realtors are bound by to law to act in the buyer’s best interest, therefore, it is highly recommended to take advantage of a Realtor’s experience and guidance.
Though buying your first home can be overwhelming, a mortgage lender and Realtor can be extremely beneficial to help ease the process. In addition, many Realtors offer first-time homebuyers seminars and workshops, often for free.

April Cal-Culator Reveals Continued Spring Setback

April Cal-Culator Reveals Continued Spring Setback

 After a strong winter in the real estate industry, the spring season continues to disappoint with sluggish market performance. Though the industry hit a record-breaking 6.0 twice earlier this year, the April Cal-Culator
lingered at a 5.7. Positive gains in underwater mortgages (home loans with a higher balance than the market value of the home) and foreclosures were offset by slow growth in existing-home sales and home prices.

The April Cal-Culator

Foreclosures
One of the bright spots of the month is CoreLogic’s latest National Foreclosure Report.  The report found that foreclosure rates (the 12-month sum of completed foreclosures) are back to November 2008 levels and foreclosure inventory is down 5.1 percent year-over-year.
“The inventory of homes in foreclosure and serious delinquency status are back to 2008 levels, yet remain elevated from a historic perspective,” said Dr. Mark Fleming, chief economist for CoreLogic. “While getting healthier, the housing market is still a long way from being fully recovered.”
Unfortunately, Georgia was leading the nation with the fifth-highest number of completed foreclosures during the past 12 months – 33,000.
Home Prices
The most recent S&P/Case-Shiller Home Price Indices showed little growth in home price gains for the majority of the 10-City and 20-City Composite, where Atlanta is included. Atlanta posted a -0.6 percent change, seasonally adjusted, month-over-month and -0.1 percent change year-over-year. David M. Blitzer, chairman of the Index Committee at S&P Dow Jones Indices, said these “annual rates cooled the most we’ve seen in some time” and that the recovery in housing starts is “faltering.”
Home Sales
A report from the National Association of Realtors found that existing-home sales remained stagnant in March. Declining sales in the West and South offset gains in the Northeast and Midwest. Overall total existing-home sales slipped 0.2 percent.
“There should really be stronger levels of home sales given our population growth,” said Lawrence Yun, NAR chief economist. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”
However, pending home sales increased for the first time in nine months. The Pending Home Sales Index, a “forward-looking indicator,” rose 3.4 percent nationwide and 5.6 percent in the South in March.
“After a dismal winter, more buyers got an opportunity to look at homes last month and are beginning to make contract offers,” said Yun. “Sales activity is expected to steadily pick up as more inventory reaches the market, and from ongoing job creation in the economy.”
Underwater Properties
RealtyTrac’s U.S. Home Equity & Underwater Report for the first quarter of 2014 showed that 17 percent of all properties with a mortgage were seriously underwater, where the combined loan amount of the property is at least 25 percent higher than the property’s estimated value, the lowest level since RealtyTrac began tracking negative equity in 2012. Unfortunately, Georgia has the 10th-highest number of underwater mortgages in the nation.
“U.S. homeowners are continuing to recover equity lost during the Great Recession, but the pace of that recovering equity slowed in the first quarter, corresponding to slowing home price appreciation,” said Daren Blomquist, vice president at RealtyTrac.
The May Cal-Culator will be released June 10 and will hopefully represent resurgence in the housing industry.

January Cal-Culator Starts New Year in Right Direction

January Cal-Culator Starts New Year in Right Direction

Posted on February 10, 2014 by admin

The December Cal-Culator’s outlook and promise for Atlanta’s residential real estate market in the new year seems to be ringing true. For the first time in The Cal-Culator’s history, the index has risen to 6.0 in part due to national and local rising home prices, increased home sales, a decrease in foreclosures and lowered interest rates, among other factors.

The January Cal-Culator

The Atlanta Board of Realtors reported home sales in the 11-county metro region experienced a 1.9 percent increase in December from the year prior.  National home sales of new and existing homes saw a 6.8 percent increase from the year earlier with the South having the strongest surge at 10.6 percent.

“We expect these statistics to begin rising as the warmer weather arrives, but this reversal of the downward trend established over the last several months is a welcome change,” said Atlanta Board of Realtors President Todd Emerson.

The latest data from CoreLogic found that metro Atlanta home prices rose 15.7 percent year-over-year in November­­. Home prices appreciated 13.3 percent overall in Georgia ­– the fifth highest in the nation.

“The market appears to be shrugging off rising interest rates, sluggishness in [national] employment growth and an uncertain economic environment,” said Steve Murray, editor of REAL Trends Housing Market Report.

However, some national month-to month numbers are moving in a negative direction, according to the S&P/Case-Shiller index posted on Jan. 28. The national measure of home prices posted its first month-over-month decline, 0.1 percent, in 10 months.

“While housing will make further contributions to the economy in 2014, the pace of price gains is likely to slow during the year,” said David Blitzer, chairman of the index committee at S&P Dow Jones Indices.

Foreclosures reached a decade-low in Atlanta in January, according to the Atlanta Board of Realtors. Metro Atlanta foreclosure notices were down 56 percent from January 2013, continuing the trend of decreased foreclosures since 2011. The decline has been attributed to the improving economy, including the lowered unemployment rate in Georgia. Decreased foreclosures, combined with historically low inventory of for-sale homes, increased new-home construction by 38 percent in 2013 as builders try to fill the void of the housing crunch.

“The market’s no longer getting weighed down by foreclosures,” said Daren Blomquist, vice president at RealtyTrac. “There’s a more normal, healthy pattern going forward.”
In December, the Federal Reserve announced it would buy $10 billion less in bonds per month in an effort to hold down long-term interest rates. The effects may already be reverberating throughout the industry. Though interest rates have risen a full percentage point since roughly a year ago, mortgage buyer Freddie Mac announced the average 30-year-loan fell to 4.32 percent during the last week of January, much to hopeful homebuyers’ delight.

The next Cal-Culator will be released March 11 and will hopefully reflect a positive month in Atlanta residential real estate.

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