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.

Best Months to Sell Your Home – RANKED

When to sell? When to buy? When to close? If you’re in the beginning phase of putting your home on the market, you’ve most likely already been told that it’s a seller’s market out there. Lucky for you, right?! Yes, as long as you have a wise real estate agent and a thorough closing attorney by your side.

Although the current real estate market is in favor of home-sellers, you still need to find the right season for homebuyers. We’ll take you through the top 4 months to put your home on the market based on the demographic that your newly listed home in the Metro Atlanta area will appeal to!

1. July 

There are so many factors that make July the #1 month to sell your home. The obvious one being BEAUTIFUL weather! What better way to showcase what your home has to offer on the inside and outside than a beautiful summer day? The second biggest reason July is the top month to sell your house is children are on summer break so your home buyers have more time and convenience to move, change school districts and get settled all before the kids start their next school year.

2. August

August is ranked 2nd best month to sell your home for many of the same reasons that make July the hottest month for homebuyers to be shopping the real estate market! Although listing your home in August could be a little riskier than July, due to the school year quickly approaching, but if you know you’re in a desired real estate location like Woodstock, GA, then you could set yourself up for the perfect bidding war. In this “seller’s market” we see a lot of homebuyer bidding wars that result in homes selling above list price. MAJOR WIN!

3. September

I know, we said to sell while the kids are out of school but September could still work for the young families on the search! Young growing families with children who are not yet in the school system will be searching while the weather is still nice. So if you have a home near a good school district, listing your home in September could motivate a lot of homebuyers to close before the holidays begin!

4. October

If your home is more the bachelor pad type or a retirement community, you don’t have to work around the general school schedule. However, you will want to get your home listed before the Holiday Season and FLU season begins! No one wants a lot of foot traffic in and out of their homes during this time (not to mention, where will you hide all of the presents?). List your home at the beginning of the fall season so you can have it sold before the Christmas trees are up and the germs are out!

If you’re ready to sell your home and need to be connected with a team that will know the in’s and out’s of the real estate market, we’re here to help! Give us a call today and let our expert team guide you through the process.

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.