Renaissance Realty Group’s Blog: Georgia: Lawrenceville

Applying for a Mortgage

With all of the paperwork and questions that you need to answer, applying for a mortgage can be stressful. But knowing what's involved in the process can make things a lot easier. Here's some information to get you started.

Before you apply

Do some homework before you apply for a mortgage. Think about what type of home you want, what your budget will allow, and what type of mortgage you might seek. Get a copy of your credit report, and make sure it's accurate; dispute any erroneous information to get it corrected. Be prepared to answer any questions that a lender might have of you, and be open and straightforward about your circumstances.

What you'll need when you apply

When you apply for a mortgage, the lender will want a lot of information about you (and, at some point, about the house you'll buy) to determine your loan eligibility. Here's what you'll need to provide:

• The name and address of your bank, your account numbers, and statements for the past three months
• Investment statements for the past three months
• Pay stubs, W-2 withholding forms, or other proof of employment and income
• Balance sheets and tax returns, if you're self-employed
• Information on consumer debt (account numbers and amounts due)
• Divorce settlement papers, if applicable

You'll sign authorizations that allow the lender to verify your income and bank accounts, and to obtain a copy of your credit report. If you've already made an offer on a house or condo, you'll need to give the lender a purchase contract and a receipt for any good-faith deposit that you might have given the seller.

Prequalification and preapproval

In many cases, you'll want to know how much mortgage you can get before you look at homes so you won't waste time drooling over places that you can't afford. Your potential lender can either prequalify you or preapprove you for a mortgage.

Lenders use several standard ratios to determine how much mortgage you're eligible for. Generally, if you're applying for a conventional mortgage, your monthly housing expenses (mortgage principal and interest, real estate taxes, and homeowners insurance) should not exceed 28 percent of your gross monthly income. In addition, your total long-term debt (monthly housing expenses plus other debt payments that won't be repaid within a year) should be no more than 36 percent of your gross monthly income. Government mortgage programs, such as FHA and VA mortgages, have higher qualifying ratios.

Keep in mind that qualifying ratios vary among lenders, and you may still qualify for a mortgage even if you exceed the ratios listed above. For example, some lenders will allow higher ratios if you have excellent credit, a large down payment, or substantial savings, or meet other conditions.

Prequalifying for a mortgage is simply a matter of a lender crunching these numbers to tell you how large a mortgage you'll qualify for based on those ratios. Remember, what you qualify for may not be what you can afford--only you can determine that after examining your own budget and lifestyle. Because the lender has not verified your income or examined your credit report, prequalification promises you nothing; it simply tells you how much mortgage you might get.

Preapproval, however, means that the lender has checked out your income and credit. You'll get a letter of commitment stating that you'll be given a mortgage up to a certain amount. Preapproval lets you know exactly how large a mortgage you can get. In addition, it gives you more credibility as a buyer, since a seller can see in the lender's letter that you're going to get the mortgage if he or she accepts your purchase offer.

Finalizing the application

As your mortgage application is processed and finalized, your lender is required by law to give you several documents. Within three business days of applying for the loan, the lender must inform you of the mortgage's effective rate of interest, or annual percentage rate (APR). If relevant, the lender must also give you consumer information on adjustable rate mortgages. In addition, the lender is required to give you an itemized good-faith estimate of your closing costs and a government publication that explains those costs.

Since the home that you're purchasing will serve as collateral for the loan, the lender will order a market value appraisal of the property. The lender will not lend you more than a certain percentage of the value of the property. If your down payment will be less than 20 percent of the value of the property, your loan will require private mortgage insurance, and the lender will obtain insurer approval. If the lender has not already done so as part of a preapproval process, it will verify your employment and bank accounts as well as obtain and evaluate your credit report.

In case you did not hear this just in ...JPMorgan Chase buys WaMu assets after FDIC seizure JPMorgan Chase & Co. Inc. came to the rescue of ailing Washington Mutual Inc. Thursday, buying the ailing thrift's banking assets after WaMu was seized by the Federal Deposit Insurance Corp. The FDIC, which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure. There had been concerns that the fund, which took a big hit after the seizure of IndyMac Bank, could be depleted by a WaMu seizure.  In a statement, JPMorgan Chase said it was not acquiring any senior unsecured debt, subordinated debt, and preferred stock of Washington Mutual's banks, or any assets or liabilities of the holding company, Washington Mutual Inc.

So what does this mean .. in short JP CHASE does not see the "sky is falling" but that this was an opportunity to expand it's sound business model.

Foreclosure Homes / Short Sale Homes List

Updated Sep 19th 2008

Fulton, North Fulton, DeKalb, County Georgia.

Cities of Decatur, Tucker, Stone Mountain, Lithonia, Duluth, Buford, Lawrenceville, Dacula, Grayson, Snellville, Loganville, Suwanee, Norcross, Winder,

This list is updated daily with Homes added to MLS in the last 24 hours

Due to the nature of Foreclosure Homes and Short Sale Home,

Buyers should act quickly !

For all Your Real Estate Needs Call !

Eric Reid, Managing Broker Renaissance Realty Group Inc.
Office: 404-921-2067 x 102 Fax: 770-513-4443

Short Sale list click here

Foreclosure list click here 

An REO is a general term for a Bank owned foreclosure home that have been repossessed due to the previous home owner's default on their bank-sponsored home mortgage loan. When a homeowner defaults, the lending bank will have to repossess the home and sell it in order to retrieve the remaining debt left on the loan. Attending bank repossessed home sales such as these can be a great opportunity for home buyers and investors, since so many bank owned foreclosures are sold for huge discounts through foreclosure sales. Since a lending bank will only need to sell a bank owned home for a portion of the full loan amount provided to the homeowner, and not its full amount, they can consequently sell the foreclosure home for less than its actual value.

Short Selling, a Foreclosure Alternative

 A Typical "Short Sale" has 3 key factors

The prospect of foreclosure is difficult for a homeowner, but there is another option.

A little-known alternative, once more commonly used in the real estate downturn of the early '90s, is the ""Short Sale"," a typical "Short Sale" has 3 key factors 1.)A homeowner falls behind on his or her mortgage payments, usually due to a job loss, rising debt payments, family illness, raising interest rates or adjustable rate mortgages 2.) The   home owner / barrow is also facing a situation in which the homes value has fallen rapidly and cannot be sold for the amount of the mortgage owed. 3.) The homeowner is willing to Sell the home based on today's market and provide all funds received from the sale directly to the lender. i.e. the Seller receives nothing from the proceeds.  

If the amount of the sale is for less than the amount owed on the mortgage, and the lender agrees to accept less then lender just agreed to a "Short Sale". At the closing the proceeds of the sale go directly to the lender and the balance of the debt is discharged.

If a "Short Sale" can not be negotiated in a timely manner then the home will move to
 foreclosure. In Georgia homeowners who can no longer make payments are served with a notice of foreclosure, which essentially informs them to either bring the loan current or face the home being taken over and sold at a public auction the first Tuesday of the month at the county court house.  While the foreclosure is in process is going on, the homeowner can live in the house offer it for sale and try and complete a "Short Sale" up until the foreclosure date.

What will that do to the average buyer or seller of real estate? In the past few months, some mortgage rates were dropping, but the rates on FHA loans were not, as Fannie and Freddie could not pass along the better prices to consumers. The conservatorship will probably lower the cost of an FHA loan, so new buyers may get better rates. It will also guarantee that FHA loans will continue to be available. When I watched GMAC financing close its doors to new loans in the Triangle area of North Carolina, I was concerned about the availability of new loans. Now, I am not, as the government will infuse up to $100 billion into Fannie and Freddie to see them through.

One of the biggest problems in the real estate industry is the availability of financing. This move makes financing more certain, and lets Realtors stop worrying about whether they can get FHA loans for their customers. Just the certainty that loans are available is valuable, and the prospect of getting better interest rates is appealing. The loss to the taxpayers is debatable, as we just got preferred shares in companies that will do well in the long run. My hope is that the projections of a $25 billion loss to the taxpayers is highly inflated, and the taxpayers may even make a profit from the preferred shares that pay 10 percent interest.

In general, this is good news for the real estate industry and benefits the stability of real estate.

What did the government do? They replaced the leadership of these two organizations: Herb Allison, a former vice chairman of Merrill Lynch, was selected to head Fannie Mae, and David Moffett, a former vice chairman of US Bancorp, was picked to head Freddie Mac. The hope is that the rest of the staff will remain in place, and Fannie's Daniel Mudd and Freddie's Richard Syron, the former leaders of each organization, have agreed to stay on during the transition.

The government is going to buy $5 billion in mortgage-backed securities held by Fannie and Freddie. This will provide more capital for each organization. The Treasury Department said it will immediately be issued $1 billion in senior preferred stock from each company, but eventually the Treasury could be required to put up as much as $100 billion for each organization over time if the funds are needed to keep the companies afloat. This infusion guarantees that each organization will remain solvent, assuring that financing for real estate purchases will not be thrown into chaos. The government also will receive warrants representing ownership stakes of 79.9 percent in each firm. The existing stockholders will be subordinate to this obligation to pay the federal government, so the $36 billion in outstanding stock for these companies just moved down a notch to be in second position to the federal government. This puts those shares in the position of junk bonds, according to Standard and Poor's ratings.

Hope Now has helped more than 2 million at-risk borrowers stay in their homes during the past 13 months, according to numbers released by the coalition on Wednesday.

The alliance of mortgage servicers, counselors, and investors assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June.

Despite this progress, foreclosures continue to climb; 91,752 families lost their homes in July. That represents an increase of 14% from June and more than double the number of July 2007, when only 42,043 homes went to foreclosure.

"The treadmill is still going a little faster than [Hope Now] can keep up with," said Nicholas Retsinas, Director of Harvard University's Joint Center for Housing Studies. "Foreclosures have outpaced the efforts to combat them."

So, Hope Now is stepping up its efforts to reach out to troubled borrowers to let them know help is available, according to Faith Schwartz, the alliance's executive director. The group has promoted its program through advertising, public announcements, as well as letters to at-risk borrowers and large foreclosure prevention events that it's holding around the country.

If you are falling behind on you current mortgage or face and adjustable rate mortgage increase act quickly. Call your lender to find out all your options.

With a short sale, you sell your home and if you don't satisfy the mortgage amount the bank may forgive the deficiency. A short-sale is positive for both the lender who doesn't have to go through the process of foreclosing and the homeowner, who may be able to walk away without a huge amount of debt. After the short sale closing your debt is satisfied ,, it can be considered over done with gone

If you simply walk away, your house will be sold at auction, and if the amount it's sold for doesn't satisfy the mortgage, you'll be on the hook for the deficiency. Even after the court house sale you can still be held accountable for an unpaid balance on the first and the second unpaid mortgage balance

If your facing a foreclosure or have fallen behind on your mortgage call us before its to late.

Eric Reid, Managing Broker Renaissance Realty Group Inc.

Home Loss Prevention

Expert Short Sale Certified

REO Certified

Graduate Harris Real Estate University

 Office: 404-921-2067 x 102 Fax: 770-513-4443

Search All Georgia Homes for Sale at www.GeorgiaOnlineHomes.com

Daily Real Estate News  |  August 19, 20085 Tips to Get Buyers Buying

Frontdoor.com, the new real estate Web site from HGTV, offers a list of ways to increase the likelihood that a house will sell. Here are a few of them:

• Build buzz with an open-house bash, complete with wine, catered food, live music, and prizes.

• Take staging to the max with feng shui stagers who improve a home's energy or "chi." Good chi makes potential buyers feel welcome.

• Help serious buyers with financing by paying closing, costs, paying to lower the interest rate, or offering a lease-to-own plan.

• Let buyers sleep on it - literally - by offering them the opportunity to stay overnight. (Read "Some Buyers Ask to Sleepover First.")

• Throw in an extravagant extra like a year's mortgage payments or a big stipend for furniture.

Source: Frontdoor.com (08/12/08)