Stephen Katz – First Home, First Loan Helping to make home ownership a pleasant reality Wed, 21 Jun 2017 20:40:03 +0000 en-US hourly 1 Raise The Roof! Fannie Mae Has Raised Their DTI Ceiling! Wed, 21 Jun 2017 20:39:20 +0000 Have you ever been rejected for a mortgage due to your debt-to-income ratio? Or know someone who has? Well good news: starting July 29, Fannie Mae is raising the DTI ceiling to 50 percent! Currently, it sits at 45 percent.

Never heard of DTI? Debt-to-income ratio takes your gross monthly income and determines what percentage of that goes towards any debts that you may have – credit cards, loans, etc. including what your new mortgage payment would be. You can find a free calculator here.

No need to get alarmed quite yet if your ratio is higher than 50 percent. Fannie Mae, Freddie Mac and the Federal Housing Administration all have exemptions allowing you to buy or insure loans, even if you have a DTI above 50 percent.

Word of advice, however, high DTIs are viewed more critically by lenders than any other factor – including credit score. The reason is simple: more monthly debts = a greater risk of late mortgage payments.

Having a lower DTI does not mean that you’re automatically good to go, however. There are still several other factors involved in the approval process, such as your down payment, your credit score and more.

Want to find out what loan you can be approved for? Give us a call today!

Why Do You Need Title Insurance? Thu, 15 Jun 2017 14:37:20 +0000 Today, we’ll talk about what title insurance is and exactly what you’re paying for.

Whenever I sit down with a borrower, they ask what fees they can expect when they’re getting ready to close. One of those components is title insurance, which can be kind of pricey, but is very important. The important thing to remember is that title insurance is a one-time fee that is paid for at the time of closing. Typically, this is mandatory, so that we know that the property is going to be free and clear of any liens or clouds on title.

After hearing that, you may think to yourself “I don’t need that, it’s just an extra cost.” You might think that your home is free of any lien or clouds on title, but your builder or neighbor may have liens on your property. For example, if you buy a house where a contractor did some work for a previous owner but it wasn’t paid, it could affect your ability to refinance down the road if there are liens against the property.

Another thing you need to be aware of is the TILA-RESPA Integrated Disclosure (TRIP). TRIP was established because of the Dodd-Frank Act of 2010, which was a response to the mortgage crash. The Dodd-Frank Act aimed at making sure buyers are aware of what they’re getting into and understand their financial obligations. This change affects all of us, but the worst of it is going to land on the lending side of things.

The thing that will affect you, the buyer, the most is once you get the closing disclosure, or settlement statement, which replaces the HUD-1 statement. If we, the lender, send the disclosure through the mail, you assume three business days for delivery and then three days for review prior to closing. For example, assuming you receive the settlement statement on Friday, it will be Wednesday before you can close. This means there will be no more last second closings, as the process has now been drawn out a bit.

Do you have more questions that we didn’t answer here? Feel free to reach out! We’re happy to help.

Why Is The Pre-Approval Process So Important? Wed, 07 Jun 2017 18:08:59 +0000 Today, I’ll discuss the importance of the pre-approval process. The pre-approval process is imperative and essential to be completed prior to you making any offers. The listing agent and seller typically require a pre-approval letter to accompany your offer with the Realtor you work with.

This process can happen a couple of different ways. The preferred methods are to either do this in person or over the phone. You can also go to my website and fill out an application there. I typically conduct a follow-up call after you submit an application.

Ultimately, we need to ask you all the necessary questions. Depending on your answers, we can ask follow-up questions. By the end of the conversation, we will have a great loan profile for you. This allows us to email you a list of required documents.

We want a smooth escrow process. There’s nothing worse as a homebuyer to be running around at the last minute. We do all this work upfront. We can discuss rates and programs. We want to educate you at the end of the first conversation. We want to help you make the best decision for your situation.

We look forward to assisting you with your finance needs!

What Should You Ask a Buyer’s Agent Before Hiring Them? Thu, 01 Jun 2017 17:58:45 +0000 Are you thinking of hiring a buyer’s agent? If so, there are questions you should ask to ensure you hire somebody you can trust. Here are a few to keep in mind:

     Are you a full-time agent?

     Do you work exclusively with buyers?

     Do you have a team behind you?

     Do you have testimonials from past clients?

     Do you do a comprehensive buyer consultation?

These are all very important questions you should know the answer to, especially the last one. A comprehensive buyer consultation is a very important part of the buying process because it provides an opportunity for the agent and client to go over the client’s wants and needs, set expectations for the process, and answer any questions they might have.

If you have any questions about the buying process, or if you would like to talk to one of our recommended buyer’s agents, don’t hesitate to reach out to us for a free consultation. We’re always available to give you a hand!


Which Is Better: Higher Mortgage Or Paying Closing Costs? Wed, 24 May 2017 20:36:16 +0000 Today we are going to discuss whether it is better to pay the closing costs in cash upfront or to take out a higher home loan. The difference could cost you thousands.

It’s very common for sellers to be asked to pay closing costs by the buyers, so keep this in mind. Let’s say you want to buy a home that’s listed at $100,000 and have made an offer of $97,000. If you want the seller to cover those closing costs, which could be up to $3,000 or more, you may need to come up on your offer a little bit. When it comes to your mortgage, a difference of $3,000 isn’t that big. It’s a few dollars a month on your payment. However, that $3,000 in closing costs is cash that comes immediately out of your pocket.

I’m not saying you have to pay full price just to get your closing costs covered, but if you are going to have a trade off of a few thousand on your mortgage or a few thousand more in cash in your pocket, it’s smarter for you as a buyer to keep that cash in your bank account than it will be to come up a few thousand on your mortgage. If you can have those closing costs set aside for a rainy day, you’ll be happy to have it when something inevitably goes wrong in your home.

If you have any more questions for us, or are thinking about buying yourself, give us a call or send us an email. We look forward to hearing from you!


The Four Stages Of Negotiations When Buying Or Selling A Home Wed, 17 May 2017 18:15:11 +0000 Whether you’re buying or selling a home, you’re going to have to go through the negotiation process. Today I will be outlining the four major stages of negotiations. Ideally this will prepare you for anything that may come your way.

  1. Getting the offer accepted: You have agreed on price, terms, and conditions. You have signed the contract and put it into escrow.


  1. Appraisals: The bank needs to verify that the money they’re lending you is the right amount. This is why they come out and determine a value for the home. If they don’t think the home is worth what you are paying for it, your loan could fall through. Appraisals can be made tougher in an appreciating market. (Click here for my blog on appraisals.)


  1. Home inspection: This is where big hurdles can come out in the purchasing process. The buyer pays for an inspection to ensure the home is in good condition. This process requires the most negotiations because buyers want everything repaired and sellers want a lot of things left alone. Usually, a seller will fix things that have to do with the safety of the buyer, but it can be difficult to get things moving along towards an agreement.
  1. Closing: This is the final part of the process, and you have to be extremely careful with your finances at this point in time. If you go out and buy new furnishings for your home, you could upset your debt to income ratio and your loan could fall through at the last second. Just wait until you have the keys in your hands to transfer money or purchase expensive items.


Hopefully this can help guide you through your real estate negotiations without too much trouble. It can be a difficult process to navigate without a real estate agent, so please don’t hesitate to contact me if you need assistance with this. I have plenty of real estate agents I can refer you to! or 770-824-9777

I look forward to speaking with you!

What Appraisals Are And How They Work Fri, 12 May 2017 18:59:21 +0000 Today we are excited to talk to you all about appraisals. We’ll go over what they are, how they work, and how they affect the purchase of your home.

Every time you write a contract, there will be a clause in there saying that a home has to appraise in order for the sale to go through. These aren’t required with every type of financing, but definitely are for FHA and VA loans.

If the home doesn’t appraise out to at least the value it was purchased for, you have the option to void the contract and/or negotiate the price down. An important thing to remember about appraisals is that they are one person’s opinion on the value.

There is math and there are formulas involved in coming up with an appraised value, but there is some art to it as well. By using comparable homes, an appraiser will determine whether your house is priced fairly. If a new house sells the next day and it’s a more comparable home to yours than another one was, your home will then probably appraise a little differently.

Even though you’ve had a home inspection, the appraisers have a responsibility to look for certain things and areas where improvements can be made. Sometimes you might get a conditional appraisal that says your home will appraise for x amount if you fix a certain problem.

Hopefully this has been helpful to you. The appraisal typically takes about 48 hours to come back after it has been completed, and we (the lender) will let you know when it comes in.

If you have any questions for us about appraisals, feel free to give us a call or send us an email. We can’t wait to hear from you!


The Difference Between Pre-Qualification and Pre-Approval Wed, 03 May 2017 18:39:06 +0000 Today, we’ll talk about the difference between getting pre-qualified and pre-approved for a mortgage. There’s a clear difference.

For pre-qualification, a buyer contacts a lender with financial information and the lender bases their decision off these numbers. This model relies heavily on information provided by the buyer directly. No pay stubs, W-2s, credit score report, or similar paperwork are involved for the lender to make this decision. While the buyer may still be honest with the lender, it’s not official.

For pre-approval, documentation is required to make a decision. This is what you really want. A buyer created a relationship with a lender by giving them required paperwork. There’s documentation attached to the information they provide. The lender has the opportunity to discuss a buyer’s work history and any debt to understand the loan. The lender then determines whether or not a buyer could afford a certain mortgage.

There’s a vast difference between the two processes! You’ll want a pre-approval letter over a pre-qualification as a buyer, however, both are helpful. If you’re not submitting paperwork, you are not pre-approved, but instead, only pre-qualified.

If you have any questions about this topic, or if you need mortgage assistance of any kind, please don’t hesitate to reach out to us! 770-824-9777

Four Home Buying Tips Wed, 26 Apr 2017 20:12:33 +0000 Today I’ll tell you the four biggest tips to get started with your home search.

  1. Determine your budget: Before you even start looking, you need to know how much you can comfortably afford. Don’t waste your time looking at homes that you can’t buy – that’s a terrible way to disappoint yourself in the end. You can start by checking out our mortgage calculator.
  2. Get pre-approved: This relates to tip #1 but it’s also a way to boost your standing in the eyes of a home seller. Buyers that are pre-approved are nearly as good as people paying cash. Click here to get pre-qualified now!
  3. Differentiate between your wants and needs: What do you really NEED in a home? It might be storage space, or it might be three bedrooms. You may only WANT granite countertops and walk-in closets. Be sure to know what you need versus things that you simply want. I see couples argue about these things all the time, so be on the same page with everyone involved in the transaction.
  4. Call me: I’m the best possible person you could talk to when you’re looking to buy a home. I will provide you with the best mortgage experience possible!

As always, please don’t hesitate to contact me if you have any questions! 770-824-9777

What Do Rising Interest Rates Mean For You? Wed, 19 Apr 2017 19:36:20 +0000 Today, I’ll talk about what you need to know regarding rising interest rates.

While a one percent raise might not seem like much, it can significantly affect both buyers and sellers. For example, let’s say you’re looking to buy a $200,000 home while rates are at 5%. If rates go up to 6%, you could only afford a $180,000 home. A one percent rise in rates is equivalent to 10% of home value.

Basically, while rates are low, more people can afford to buy your home. Low interest rates make it easier for sellers to sell their homes, and buyers will get lower monthly payments. I advise that you take advantage of these low rates now, as rates will continue to rise for the next few years. They will eventually come back down, but possibly not for a few years.

If you have any questions, please give us a call or send us an email. We’d be happy to help you!