5 Tips for Home Buyers to Find the Best Interest Rate

When the time comes and you’re finally ready to buy a home in Woodstock or Roswell, topics like mortgage interest rates may feel overwhelming and start giving you cold feet. Take a breath. At Frank Pallota Law, we are here to help you navigate the convoluted real estate market in Metro Atlanta.

A high interest rate could be the one thing between you and your dream home. So we’re going to take you through a few things you can start TODAY to ensure you will get the best rate once the time comes to apply.

Because there are a few components that determine your rate, you can’t anticipate a certain rate by simply asking your neighbors even though their home is in the same area and, most likely, comparable in price. So spend less time asking around and more time doing these 5 things…

1. Have the Highest Credit Score Possible

Needing a high credit score to get the best interest rate seems like a given for obvious reasons, however, there are a few things you can do to get a leg up! Pay down your credit card balances as much as you can each month without closing them. The goal is to get into the habit of only spending as much as you’re bringing in each month without building any unnecessary debt. Having a history of responsible credit usage will work in your favor when applying for a mortgage rate.

2. Have a Large Down Payment at Closing

As you prepare to make your home purchase, you want to start saving as if you already have a mortgage payment. Put that extra money into a savings account to apply towards your down payment. The larger the down payment at closing, the better the interest rate!

3. Lower Your Debt to Income Ratio

When applying for a mortgage interest rate you typically want a debt-to-income ratio smaller than 36%, with 28% (or less) of that debt going towards your mortgage. To figure this out, simply take your total debt amount and divide it by your income. If your debt totals up to $1,000 per month and your monthly income equals $4,000, your DTI is $1,000 ÷ $4,000, or 25 percent.

4. Pay Bills ON TIME

A history of how you manage your credit plays a significant role in the outcome of your interest rate. With a high credit score, a large down payment and a reasonable debt-to-income ratio, the lender will see you as a trusted borrower thus approving you for a great interest rate.

5. Avoid Adding New Lines of Credit Until After Closing

Try holding off on opening any new lines of credit until after those closing documents are signed, sealed & delivered! Adding new lines of credit make it more difficult for the lender to get an accurate sense of how you manage your finances. The more predictable you are in regards to your financial behavior, the greater confidence the lender will have in your ability to pay your mortgage on time.

If you have more questions or concerns about locking in your interest rate before closing, we’re here to help! Give us a call today and let our expert team guide you through the process.

Selling Your Home During the COVID-19 Outbreak

The term “new normal” has been used a lot lately when describing the rippling effect the Coronavirus, COVID-19 has had on our country and the world. But there is nothing normal about empty parks, clear roads or long-term school closures. And there is certainly nothing normal about selling your home when you literally can’t be anywhere else.

So far, the real estate market in Metro Atlanta remains open for business but gone are the days of running to Starbucks to pass the time while potential buyers tour your home.

All the medical experts will advise you that the safest route right now is to hold off on putting your home on the market. The rules of the past regarding the best times to sell your home, currently do not apply.

Life, however, isn’t always that simple and you may be facing circumstances that require you to move forward with your home selling process regardless of a shelter-in-place order from your city.

It’s time to get creative and flexible…

1. Create a Video Walk Through of Your Home

Clean the house, turn on all of the lights, organize closets, remove any clutter, pick up the rugs and take down any personal photos… then start filming! You’ll want to film in a “POV” (point of view) style using a DSLR camera or the newest smart phone you have. If you’re using a phone, remember to hold it horizontally while filming.

If your realtor doesn’t have the equipment or experience to do this for you, there are so many resources available online to help guide you through the process. Here’s a great example to get started: https://www.youtube.com/watch?v=GWtK4berZ2s

2. Teleconference Live Virtual Tours with Realtors & Buyers

Technology is playing the biggest role in keeping our economy afloat while we navigate through this current health crisis. Be open to giving potential buyers as many virtual home tours as they request until they feel ready to make an offer. At that time discuss with your realtor about a plan for physical home showings. Discuss a plan that allows sanitizing between appointments and precautions you would like the buyers to take when in the home; i.e. No shoes inside the house, no touch policy unless wearing gloves, only the essential people attend (no children) and if anyone is having symptoms of any kind, they do not attend.

3. Move Out, If Possible

Moving out before your home sells is not an option for everyone unless you have the financial means or a generous friend or family member that can offer you a place to stay without adding any extra risk to either one of you (i.e. someone in the house is a health worker and you are immune compromised or vice versa).

If you have a parent or a grandparent who could use the extra company, it’s a win-win for the both of you! What sounds better than spending some precious time with grandma while your empty house remains open for potential buyers?

Now once you move onto the closing process, we can take it from there! All of us at Frank Pallotta Law are working day and night with real estate agents in Cherokee and neighboring counties to ensure business continues for our clients. You can read more about the steps we are taking to keep your closing process moving forward while also maintaining everyone’s health and safety in our Message To Our Clients About COVID-19 and check out our Facebook for updates as things progress.

A Message to Our Clients about COVID-19

All of us at Frank Pallotta Law Firm want to take a moment to express our care and concern for every single one of our customers during this time of uncertainty surrounding the Coronavirus. Amidst school closures and overall daily life disruptions, we remain. We will continue to give our clients, friends and family the class A service that you have come to expect.

And while it’s not business as usual, it is still business and we are prepared to be flexible. Whether it’s changing an in-person meeting to a virtual one or a previously scheduled appointment to a different date, there’s nothing we can’t work out if we continue to communicate and help each other!

If all parties wish to continue with the closing process, we are prepared to deliver a clean and safe environment or adjust our closing locations and procedures as needed to maximize safety and comfort.

Before any customers and/or visitors come to the closing appointment, we ask that you go through a quick self assessment to monitor your symptoms, if any. Below are a few questions to ask yourself. If you answer ‘yes’ to any of them, please stay home and call your doctor. Access to our offices will be denied to anyone showing symptoms so we ask that you simply alert us in advance so we can make other arrangements.

1. Have you had close contact with or cared for someone diagnosed with COVID-19 within the last 14 days?

2. Have you returned from a cruise trip or any of the countries with travel restrictions from the CDC site in the last 14 days?

3. Have you experienced fever, cough, and/or shortness of breath in the last 14 days (symptoms can also include sore throat, respiratory illness, difficulty breathing)?

If you have any concerns, please give us a call and let us know how we can customize your closing experience.

Everyone at Frank Pallotta Law Firm will be doing their part to ensure your health and safety.

Be well,

Frank B. Pallotta, Attorney at Law

What Every First-Time Homebuyer Should Know

Buying a home can be an incredibly intimidating process, especially if you’re a first-time buyer. But fear not! Here are some simple tips to keep in mind to make your first home-buying experience run smoothly. 

Start saving early. 

Most people will tell you that a 20% down payment is standard, but some lending programs will allow you to put down as little as 3%. This doesn’t always mean you’re saving money, however. A low down payment often results in higher costs in the future. Even if you are able to negotiate a small down payment, that can still be a lot of money. For example, a 10% payment on a $200,000 home is still $20,000.  

Know your mortgage options.

There are a lot of factors to consider when you’re applying for your first mortgage, and a lot of opportunity for less-than-scrupulous lenders to take advantage. Make sure you do your research and work with a mortgage expert so you know you’re getting the best deal. 

Get a pre-approval letter.

You can pre-qualify for a mortgage, which means you can get a basic idea of how much a lender is willing to approve based on factors like your income, credit history, and down payment. As you get closer to finalizing your home purchase, make sure you get a pre-approval letter in writing. This will help you look more serious to sellers, and help protect you from last minute approval changes that could cost you.   

Budget for additional expenses.

It can be hard to see past the asking price of your dream home, but don’t forget there are other expenses to consider. Closing costs, title insurance, moving costs, or necessary updates and repairs can add up quickly. It’s helpful to have a little extra set aside to cover these final costs so you don’t find yourself going over budget. 

Trust the experts.

You may have seen every episode of House Hunters, but that doesn’t always translate to real world knowledge. Work with a realtor and a closing attorney you trust (hey, we know a guy!) to make sure everything runs smoothly and is cost-effective. 

Becoming a homeowner for the first time is an exciting experience, and one you’ll remember forever. Make sure you’re ready to take the leap, and know that there are plenty of people ready to help you open the door to your dream home! 

Real Estate Terms Explained: Title Insurance

If you’re a first-time buyer, you’re probably faced with a lot of unfamiliar terms as you complete the closing process. But don’t worry! We’re going to use the power of the blog to explain (most of) them to you. 

Today’s lesson: Title Insurance

What the heck is title insurance? 

Technically there are two answers to this question, because there are two types of title insurance: the lender’s insurance and the owner’s insurance. Both policies protect against future financial losses. To put it simply, if your home purchase falls through after closing, these insurance policies can save you and your lender from being financially responsible for a property home that you didn’t actually purchase. Most lenders will require this insurance, and you’ll find it included with the rest of your closing costs. Owner’s insurance is optional, but highly recommended. Both policies are a one-time fee that you pay at closing.   

Why would my purchase fall through after closing?

It’s an unlikely scenario, but it is possible. When you purchase a property, a title researcher will check the ownership history to make sure you have what is known as a “clean title.” This means that there are no pre-existing issues that could prevent the title from becoming legally yours. 

A pre-existing issue could be that a previous owner failed to disclose a creditor’s lien on the house, or the property is caught up in an inheritance dispute, or there are uncollected taxes on the property. In most instances these issues are the result of a minor error and can be cleared up quickly, but there are cases where the title issues take months or even years to resolve. And if you find yourself in one of those situations, you’ll be facing a mountain of legal fees and the potential that you’ll lose the property (and the money you invested) before you even unpack. 

Alright, I hear you. How do I get title insurance? 

Typically your agent or closing attorney will start the process for you. You’ll be charged a one-time fee (the exact cost will vary depending on a variety of factors), and even though you only pay for it once, the coverage will insurance your financial transaction as long as you own the property. Please note: this is NOT homeowners insurance — that’s a completely different type of policy and coverage. If you’re not sure how to find the right title insurance, talk to your closing agent or attorney. We live for this stuff. 

Title insurance may seem like yet another unexpected cost, but trust us, it’s worth it. If you still need convincing, give us a call! We’re here to help you every step of the way. 

Are You Ready to Refinance?

As mortgage rates dip lower and lower, you might be wondering if it’s time to think about refinancing. Many homeowners could find themselves able to negotiate a lower rate, and be able to pay off their home loans sooner than they initially planned. If you’re thinking about refinancing your mortgage, here are a few things to consider before you do: 

Know how much your home is worth.

The amount of equity you have on your home is one of the most important factors in refinancing. Your loan to value ratio, or LTV, is what lenders use to calculate how much equity you have. The less equity you hold, the higher your rate will end up being. A real estate agent can compare your home to similar homes in the area and create a competitive market analysis, so you can have a better idea of how your home is currently valued. 

Have clear financial goals.

There are a few reasons that homeowners decide to refinance. You could lower your monthly payment and give yourself extra room in your budget for other expenses. Another option is to continue making the same payment, but pay off your loan a few years earlier than expected. Some homeowners opt for a cash-out refinance, where you borrow more than the balance due and take the difference as a lump sum of cash. This money can then be used to pay off other debts, such as credit cards or student loans, or used to finance remodeling or other expensive home improvements. There is no right or wrong option — it’s best to work with a financial planner or lending expert to decide what will work for you. 

Don’t wait too long.

The mortgage interest rate market is as fickle as the stock market, and interest rates can change quickly. If you feel comfortable with the way the math is adding up, work with a loan officer (and a closing attorney!) that you trust. Get the necessary paperwork — such as current mortgage statements, pay stubs and bank statements — in order so you’ll know you’re fully prepared. Once you and your loan officer find the best rate for you, be sure to request a written confirmation of the rate you’re being offered. Remember, if it’s not in writing, it’s not legally binding! 

Refinancing your home mortgage can seem like an overwhelming and impossible task, but it doesn’t have to be! We’re here to help connect you with the best agents and loan officers in town, and make all of the necessary paperwork and negotiations are completed properly. Contact us today! 

How to Find the Right Commercial Space

Finding a great commercial property isn’t quite the same as finding your dream home. Instead of looking for the right number of bedrooms or a good school district, you need to consider how the property works for your business — and if you’ll end up spending more money than you make. 

So how do you get the best deal on a commercial property? We’re glad you asked…

Think like a professional.

Commercial real estate is a different ball game. Unlike residential real estate, commercial properties are typically valued based on potential income, or how much money your property could make in the future. For example, a prominent space in an established retail district is going to be valued higher than an off-the-beaten path location. While the financial potential of a property is definitely among the things you should consider in residential real estate, it’s the thing to focus on in a commercial transaction. 

Have a plan in mind. 

Are you looking for a space to house your business, or are you in the market for a multi-family rental property? How much build out are you willing to invest in? If you’re opening a new restaurant, you probably want to look for spaces that already have the foundations (plumbing, gas lines, etc) for a commercial kitchen. If you’re interested in owning and managing a large residential property, you’ll want to consider how many units are in the building and the average rent in the neighborhood. Knowing the business side of what you’re looking for is just as important as knowing what design features you want the building to have. 

Know the neighborhood.

Commercial properties can change hands quickly. Every neighborhood has one of those spots — one year it’s a hair salon, then a pet store, then a coffee shop. Finding a motivated seller can help you score a great deal, but be careful you’re not buying into a “cursed” location. Does the space have enough parking? Is it easy for customers to find? Additionally, you’ll want to do your research on the surrounding businesses — does the area really need another pizza place? It also helps to visit neighborhood business associations or city councils, so you can start to form relationships with the people who will one day become your customers. 

Most importantly, make sure you have a team of experts on your side! We’re always ready to help you close on the perfect property, so give us a call (especially if you’re going to open a pizza place near our office).