Important Things To Understand When Applying For A Texas Home Loan Pt 2

Top 6 Things To Know Before Taking A Home Loan In Texas

Part 2

3. The Small Details In The Loan Contract Matter

An agreement for a home loan is a legal contract like any other and the legal terminologies can easily cause perplexity to the borrower especially the small “hidden” details in the agreement.

For instance, one may think a loan “default” implies a situation when the borrower is incapable of servicing by payment of EMI. To some banks, the interpretation for default may mean when a borrower dies, goes through a divorce (and the spouse was a co-applicant in the home loan), or when the borrower is sued for a civil or criminal case may be tax fraud.

It is also common to find clauses requiring the borrower to attach extra property for loan security in the event the price of the original property falls. In this case, the bank may adjudge the act of omission to provide extra collateral as a default.

4. Negotiate For A Favorable Rate

You must try to negotiate for a more favorable interest rate on the loan regardless of the loan type you have applied for as the borrower. In most cases, the bank holds the upper hand in the negotiations but a borrower can always bargain for lower rates especially if they have a long-standing relationship with the lender or a strong credit rating.

It is key that you have a clean record of timely loan repayment to support your credit history and request for favorable loan rates. Most banks are appreciative of a strong credit rating/history because a strong credit rating supports their quest for a good lending business.

Additionally, it might prove helpful if you can try to secure the loan at the end of a month when banks are racing to hit monthly targets for growth and expansion of loan portfolios.

5. Long Loan Repayment Durations Mean Expensive Loans

The Reserve Bank of India has been aggressive in enforcing the monetary policy for a considerable time now. An increase in the base lending rate has pushed banks to increase the interest rates charged to their customers on home loans and which implies a higher EMI for the borrower.

Many borrowers are unable to meet the EMI and appeal to the lender for an extension on the loan repayment duration in an attempt to lower the EMI. This is a move that creates temporary relief for the borrower who is in the desperate situation. However, in the long run, the borrower ends up paying more money.

As an illustration, consider a situation where the borrower has taken a loan of Rs 30 lakh to be repaid after 20 years at a rate of 10.5% per annum. In this case, the EMI to be paid is calculated at Rs 29,951 while the total interest to be paid on the loan will end up at Rs 41,88,240.

For a home loan with a long repayment tenure, the borrower ends up paying an interest amount that is higher than the principal amount borrowed.

6. Explore Alternative Lenders

Just because you have secured a loan with a given lender does not mean you are stuck with the lender for the duration of the loan tenure.

If you can source a lender with better financing terms than the original lender, you can always change lenders through available refinancing methods. Currently, most banks have removed pre-payment penalties on floating rate loans and only seek a processing fee from the borrower to effect the change.

As a borrower, always try negotiating for lower rates by seeking a reduction or a full waiver based on a study of comparable home loan products in the market.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the first article in this series.

Important Things To Understand When Applying For A Texas Home Loan Pt 1

Top 6 Things To Know Before Taking A Home Loan In Texas

Part 1

The process of taking on a loan is a bit more complex than many people think. From advertisements, it seems like many banks are always ready to give out as many loans as possible which contradicts the dreary process one must go through to have a loan approved.

Loans, like other financial investments, require the holder to be well conversant with how a loan product works to avoid getting into financial ruins later.

The following are the important factors to be aware of before getting into a loan contract with your financial institution.

1. Determinants Of Loan Eligibility

One of the most informal ways of qualifying a borrower for a loan is to compute their Equated Monthly Installment (EMI). Often, banks will require you to part with 40 to 50% of your monthly salary which will be directed to pay the loan. Noteworthy, reimbursements and allowances are not considered part of your salary used to net the EMI.

Additionally, your EMI will be negatively affected if the loan holder is servicing another debt elsewhere using their salary stream. In other situations, banks are keen on the number of dependents under the borrower. If more money from the applicant’s salary must be diverted to other important needs, the implication is a lower loan repayment capability.

Aside from the level of income after expenses, the reliability of borrower’s income stream is also questioned. Those borrowers with a more stable income are likely to find the eligibility criteria easier compared to borrowers in self-employment with unsteady income flow.

How old are you will influence the duration of the loan repayment period. Under normal scenarios, loan repayment tenures will not exceed the retirement age unless the borrower has a younger loan co-applicant.

Also, the co-applicant cannot be minor and should have achieved a given number of years for the application process to be successful, – a law that was set up to minimize ownership disputes. A co-applicant can enable the one to get a higher loan amount if the income level of the co-applicant is considered in the eligibility test.

The value of the property also affects the success of a loan application process. Most banks will not lend more than 70-80% of the value of the property to the borrower.

2. The Type Of Loan The Borrower Seeks

The type of interest rating categorizes home loans between loans with a fixed interest rate throughout the loan repayment duration or loans with a floating interest rate that varies from time to time depending on the market conditions.

Just as the name may suggest, for a fixed interest rate loan the interest charged on the loan does not change with fluctuations in the money markets. However, the interest rate on this loan is usually 1-2.5% points above the contract interest rate on a floating interest rate loan.

The clause to add extra percentage points on interest rating for a fixed-rate loan will vary from bank to bank.
The important thing to remember is that the EMI will be affected by the amount of interest charged on the loan. A higher interest rate will increase the number of periodic loan instalments required to be paid to retire the loan.

At face value, fixed-rate interest rate loans may seem a more viable financing option until you speak to a loan expert. When interest rates in the money market fall, the borrower is stuck paying a loan above the interest rates; the borrower’s existing home loan proves quite expensive in the long run when interest rates fall.

In such a fixed-rate loan case where interest rates fall, a borrower is legally required to pay an equal amount of interest charges all the time regardless of the level at which the interest rates in the money markets are prevailing at.

Additionally, it is common for banks to insist on adding an interest rates review clause in the loan contract where the bank exploits avenues to raise the interest rate on the home loan after a fixed period or a drastic rise in interest rates.

On the other hand, floating rates are more preferred unless the borrower (with the help of a loan’s expert) can rationally foresee a big increase in interest rates in the market over the loan tenure.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the second article in this series.

First Time Home Buyer In Texas? FHA Loan Can Clear The Path For You

Why An FHA Loan Is Ideal For First Time Home Buyer In Texas

It is every American’s dream to own a home. However, homeownership is becoming increasingly expensive with each day. Real estate prices have spiked in many parts of the US, and aspiring homeowners are finding it much harder to put down a down payment and afford the monthly payments. This is not to mention the upkeep and maintenance costs. For some people, renting appears to be the more favorable option.

However, while renting isn’t necessarily a bad thing, you will be pleased to learn that, in a bid to make housing more affordable, US government offers some home loan programs. This is particularly beneficial for those with poor credit. One such loan program is the FHA loan offered by the Federal Housing Authority, and it can prove to be more beneficial than you think.

The Advantages Of FHA Home Loans

There are three key reasons why you should consider the Federal Housing Administration loan program- easy credit requirements, reduced down payments, and low closing costs. While in the case of a conventional home loan you may be required to put a downpayment of 5% or more, with an FHA loan, you are allowed to put down as little as 3.5% or $3,500 per every $100,000 you borrow.

Besides lowered down payment requirements, you don’t need to have a perfect credit score to qualify. People with a credit score as low as 580 can be approved for an FHA loan. It is worth noting that you can also be approved even with a lower credit score but you will have to put a downpayment of 10% or more.

The Federal Housing Administration has made it even easier to qualify as you can be approved even if you have other types of debts. As opposed to conventional mortgage lenders who require that you have a debt-to-income ratio_(your total amount of debt compared to your total income as a percentage) of below 36% including housing, you can be approved for an FHA loan with a debt-to-income ratio of up to 43%.

Should You Get An FHA Home Loan?

While the benefits and downsides discussed above will help you to determine whether you are a good candidate for an FHA loan, you should consider speaking with several lenders before making a final decision. By consulting a mortgage expert, you will be able to find out which loan will be ideal for your financial situation and needs.

Ultimately, FHA loans are suitable for first-time homebuyers who are still struggling to build their credit and save up enough money to invest in a home. With the easy credit requirements, reduced down payment requirement, and higher debt-to-income ratio, the FHA has made it easier for almost everyone to afford a home. However, this is only so if you are looking to buy a home within FHA loan limits.

Even though an FHA loan is favorable to buyers with less-than-perfect credit, the conventional mortgage offers a better deal to those with a good credit score and have enough money for a sizeable down payment. Additionally, if you’ve saved up 20% of your home’s purchase price, a traditional loan will definitely be your best option as you will avoid mortgage insurance costs altogether.

Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

Decided To Have A Texas House? Here’s Initial Payment You Should Prepare

The Down Payment You Should Pay When Purchasing A House In Texas

Down payments are initial payments made when buying something under some form of hire purchase This means that a buyer first pays the initial installment, usually the highest amount of money, after which they can pay the rest in intermittent installments. When it comes to purchasing a house, the down payment you set aside is critical.

Lenders consider the amount that you pay upfront to be the stake you’re willing to put on your new home, hence it will influence the loan amount. The down payment also determines the probability of private mortgage insurance (PMI) as a requirement by the lender. As a rule of thumb, most, if not all lenders will require PMI if the downpayment is less than 20% of the house’s value. It also affects the interest quota. Without a doubt, the higher the down payment, the lower the rate of interest.

Evidently, there’s a lot to think about with regards to making down payments when purchasing a new home. Primarily, the amount to pay initially depends on the cost of the home and the loan program you’re working with. Normally, the amount will be anywhere from 5% to 20%, but lenders vary, and so do their percentages. Some key aspects to consider include:

1. The Loan-To-Value Ratio

The initial installment is used by your lender to calculate the loan-to-value ratio (LTV) of the home. This is one of the factors a lender considers in extending a client’s credit. They also look at debt to income ratio as well as personal credit scores in relation to the LTV. This makes the LTV an important consideration when deciding the amount of down payment to make.

The loan to value ratio is the amount you’re obligated to pay after making the first deposit on the house. It is usually represented a percentage, which is, in essence, is the ratio between the principal amount, to be paid in installments at regular intervals and the estimated value of the house. The higher the initial payment, the lower the loan amount, hence the lower the loan-to-value-ratio. In detail, it is calculated as:

loan-to-value (LTV)= Loan amount/appraisal value or purchase price (The lesser amount is used)

Consider the following scenario:

Mr. & Mrs. Smith wish to buy a house whose purchase price is $200,000 while it’s appraised value is $205,000. The former, being lower will be used by the financial institution to decide the loan amount. If Mr. & Mrs. Smith decide to pay a downpayment of $40,000, she needs an additional loan of $160,000 to fulfill the asking price. In this case, the loan to value equation will be:

loan-to-value (LTV)= Loan amount/appraisal value or purchase price so,

LTV= $160,000/$200,000

LTV= 0.8 which in percentage(multiply by 100) is 80%

2. Private Mortgage Insurance (PMI)

As stated before, a down payment of less than 20% requires a backup PMI. This is because the financial institution stands to lose a lot in case you decide to default the loan, having financed an impressive 80% and above of your purchase. With an LTV as high as this, the lender is investing a tremendous amount, and to protect their risk, comes the insurance. Paying PMI, in turn, increases your monthly installment amounts.

Conclusion

Before deciding on the down payment for the property, assess the pros and cons that come with lending institutions. Would you rather pay a private mortgage insurance every month, even without knowing whether you’ll manage to be a homeowner in the long run, or does it make more sense to wait till you have a surmountable amount to pay as a down payment? With these two financial aspects to consider, the ball is in your court.

Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

Important Things To Do Before You Purchase A Texas House Part III

What Do You Need To Do To Buy A House In Texas

Part 3

7. Find The Right Home

The initial process of finding the perfect home is to know exactly what you want. Write down your needs and your wants and give them a score on how important they are. This usually includes the size of the yard, the number of rooms, or how close the house is to a school district or your workplace.

Dallas texas brick home bought with assistance paymentsTo refine your search, look for the homes that are advertised online. When you check on the online listings, it will give you an idea of the houses currently available for sale and prescreen the homes in your preferred price range. This will ensure you only visit the homes you are actually interested in.

If you are finding it difficult to find homes that you like, speak to a realtor. Real estate agents are experienced in helping buyers to find homes, and they are knowledgeable about the housing market in your area. They can also assist you when it comes to setting expectations that are realistic and they can keep you confident and motivated when you feel like you will never find a home that you really love.

8. Make An Offer

As soon as you find a home that you see yourself living in, do not hesitate. Your realtor will assist you with the details on how to make an offer. You need to decide on the amount you are prepared to pay. If the market is hot, negotiations may not be an available option, which means you might have to pay for the asking price in order to secure the sale. In a cold market, you may be able to negotiate down to a lower price or specific seller concessions. Ask your realtor for advice when working out each detail of the offer.

Your offer has to state the terms linked to the sale, which needs to include any contingencies. A contingency will mean you can cancel the deal if a circumstance has not been met. This could include an inspection of the house that reveals that the home requires costly and significant repairs.

9. Prepare To Close

The next step is to ensure your mortgage is approved. The lenders you are dealing with might ask for updated or additional documentation. If the pre-approval expired, your lender will probably assess your credit score again.

The lender will then arrange an appraisal. This includes a professional that will evaluate the home and then compare the property to other properties that are similar in that area and then make a decision on the value of the home. This is a process that protects the lender and the buyer from overpaying for a property. You should also arrange for a home inspection during this time.

If the appraisal price is less than what you offered to pay, the seller may need to lower the asking price or you would need to cover the shortfall from your own pocket to close the deal. On approval of your mortgage and every detail is worked out, you are now ready for closing day.

Final Thoughts

Find out what is needed for the closing, and whether you need to pay the down payment in advance. You will usually need your passport or driver’s license, a certified or cashier’s check that covers the closing costs. You might also need to prove that you have insurance along with any other supporting documents.

When it is time to sign off the deal, you need to take your time to read over all the paperwork. Read over everything carefully as this is a really large purchase. From here you will be given the keys and remotes to your house. Enjoy every moment, and feel relieved that your buying process is finally over.

Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you.  Feel free to contact us or call us today! Click here to go to the first article in this series.

Important Things To Do Before You Purchase A Texas House Part II

What Do You Need To Do To Buy A House In Texas

Part 2

4. Save For Your Down Payment

Saving for a down payment may take some time, especially when you are saving for a 20% down payment.

Fortunately, there are many options for people that cannot save that type of cash. For example, an FHA loan only requires a 3.5% down payment, and some of the options for conventional loans offer down payments as low as 3% provided mortgage insurance is included. If you happen to qualify for either USDA or VA loan, you could secure a property with 0% down.

The reason that 20% is often the quoted number has to do with that this is a minimum amount you need to put down in order to avoid mortgage insurance. In addition to this, if you are able to put down a large down payment, it will lower the monthly payments.

When working out how much to save, remember the closing costs. The closing costs usually vary according to your situation. However, it is usually around 2 to 5% of the value of the home.

You will also need to provide bank statements over a period of 2 months to show you have had the funds for a down payment in your account for a minimum of 60 days so that these funds become eligible for use. Lenders will ask for this documentation to make sure you haven’t taken out a loan in order to cover the down payment.

5. Get Pre-Approval

Once you feel confident that you are ready to approach a lender, getting pre-approved is the next step in the process. Pre-approval will indicate the amount you are able to borrow and it also shows a seller that you are serious.

For your pre-approval, lenders take into account your current credit report to ensure your credit score qualifies and to ensure you do not have major blemishes or debts like bankruptcy. The lenders also look at your debt-to-income ratio and they will also ask for information associated with your assets and income. You should have documents ready such as a recent W-2, bank statements, and paystubs, and other paperwork that may be relevant to ensure the entire process goes as smoothly as possible.

Once you receive pre-approval, make sure that you do not engage in making major changes when it comes to your credit profile. This could include switching jobs or taking on more debt as this may risk your chances of approval.

6. Find A Reputable Real Estate Agent

A qualified and experienced realtor will take you through the entire process, making everything go smoother and faster. They can also help to lower the anxiety that many first time buyers go through.

When you start looking for a realtor, in-person interviews or online reviews can be extremely helpful. You want to find someone that honors what you want and is happy to advocate on your behalf. They should also be honest and assist you in setting up realistic expectations.

Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you.  Feel free to contact us or call us today! Click here to go to the next article in this series.

Important Things To Do Before You Purchase A Texas House Part I

What Do You Need To Do To Buy A House In Texas

Part 1

Buying a home is amongst the things that most of us eventually do at some stage, but not many people know how to go about this task. You may already know that you will need to tour homes, find a good realtor and obtain a loan, but you may not be clued up on where you should be going or who you should be talking to about these things, or the order in which you should be doing each task.

This is why we have formulated a step-by-step guide to buying a home.

1. Make Sure Your Finances Are In Order

You might be thinking about house hunting, loan pre-approval, and a real estate agent, yet the steps to prepare to purchase a property actually begins many months or even a year or two before you can actually look at the appropriate mortgage rate.

You have to make sure you are financially ready. This will mean assessing your financial situation currently and making sure that it matches up to what a mortgage lender wants from a borrower. You also need to work out what is affordable for you and you need to save for closing costs and your down payment.

2. What Do Lenders Look For?

Below is a list of the standard requirements that you will need to match up to, in order to ensure your mortgage is approved. This is just a general guideline and it can vary according to the lender along with the type of loan they are prepared to offer:

  • For conventional loans, your credit score should be 620 or higher, or 580 for an FHA loan.
  • Your credit history must be good.
  • You need to prove that you receive a consistent and reliable income.
  • Your income-to-debt ratio must below 50%

If you are only matching up to the bare minimum requirements, it might be a good idea to first improve your score before you start applying for mortgages, as it can improve your chances of getting a better rate.

3. Work Out How Much You Can Afford

You first need to obtain pre-approval for your mortgage to find out the exact amount that you can spend on your home. Working out your budget on a monthly basis and what it will be once you have a mortgage can assist you when it comes to deciding on whether you are able to afford a house.

Today there are home-affordability calculators that provide an estimate on the amount you can afford to spend on a house along with what your payments might be every month. You might discover that your payments every month may be lower than what you are paying currently towards rent. However, homeownership does come with many other new costs. This includes the maintenance of your home, insurance, and taxes. You need to factor these into the overall costs.

Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you.  Feel free to contact us or call us today! Click here to go to the next article in this series.

Purchasing A Home In Texas: What Credit Score Do You Need?

The Ideal Credit Score That Allows You To Buy A Texas House

Part II

What’s The Minimum Score Unlikely To Affect My Mortgage Eligibility?

Corpus Christi texas classic home bought with assistance paymentsIf you are not a veteran who automatically qualifies for a home loan from Veteran Affairs, a credit score of at least 500 is a must. The same minimum is required in order for you to qualify for a 10% down-payment for a loan through the Federal Housing Administration.

If you don’t meet those requirements, it’s not the end of you. You can get a parent, spouse, or friend with better credit to cosign for your loan. This could help better your chances of approval for a traditional mortgage. If that’s not the case, follow suit and work to improve your credit score before proceeding to apply for a mortgage.

What Credit Score Do Lenders Check?

Almost 90% of lenders use your FICO Score. For your information, this is the credit score that’s most widely used. Though, depending on the type of loan, different versions of the FICO Score are used.

The following scores are likely to be in your lender’s checklist when you are applying for a mortgage loan:

  • FICO Score 2 based on Experian data
  • FICO Score 5 based on Equifax data
  • FICO Score 4 based on TransUnion data

What’s the Interest Rate You Are Likely To Get With Your Credit Score?

For simplicity, credit scores are broken down into categories. This helps you get to know the quality of your creditworthiness and steps you’ll move to boost it.

  • Poor – 300 to 579. With a poor credit score, it’s unlikely for you to get mortgage approval. But things may work out for you if you have a cosigner or an underwriter willing to accept you. With these terms, if you’re lucky to find a lender, be ready to cover high-interest rates on your loan.
  • Fair – 580 to 669. Though you’ll qualify for a loan with a fair score, your interest rates will probably remain high, a bit higher than with a good or very good score.
  • Good – 670 to 739. This is an awesome score that’s unlikely to affect your interest rate that much. Your rates are likely to range within 0.25% to 0.5% with such a score.
  • Very good – 740 and higher. Get the lowest interest rates and the best payment terms in the market with this score.

Is It Necessary To Check For Credit Report & Score Before Searching For Houses?

Sure thing. Having a rough idea of your credit score is vital for your home buying process.

With knowledge on your credit report and score you’ll be able to:

  • Make corrections of inaccurate information in your report before applying.
  • Make a prediction of whether you’ll get approved or not, and approximate your interest rate.
  • Find out the areas to improve your creditworthiness before buying.

How Can You Improve Your Score Before Applying For A Mortgage?

There are tactics that are likely to work for you in order to improve your credit and enjoy low-interest rates and the best terms when you apply for a mortgage. Let’s review them:

  • Accumulate savings for a large down payment
  • Keep a close eye on your credit report.
  • Ensure to pay your bills at the right time
  • Look for the services of credit repair experts
  • Hold off on other credit.
  • Reduce your credit utilization ratio.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the first article in this series.

Purchasing A Home In Texas: What Credit Score Do You Need?

The Ideal Credit Score That Allows You To Buy A Texas House

Part I

If you’re not well conversant with the real estate industry and beginning to think of purchasing a home, it’s good you know that your credit score can affect your ability to get a mortgage. Though it doesn’t mean the world, a good credit score is vital. It boosts interest rates and improves loan terms. However, it doesn’t mean that you need perfect credit in order to own a home. There’s much still hope.

Knowing everything, in terms of the impact your score has on your mortgage rate, you’ll be able to grow your credit in advance before you proceed to own a home.

How Does Your Credit Score Affect Your Mortgage Rate?

Fort Worth texas brick home bought with assistance paymentsLet’s face it! Before a lender settles on a decision of approving you for a mortgage, he/she must consider your credit score. Moreover, they put into consideration your accumulated savings, debt-to-income ratio, and the amount of money you readily have available to give as a down payment.

Your scores go beyond determining whether you’re eligible for a mortgage. The interest rates and payment terms you get are largely influenced by your score. A credit score ranging anywhere from 650 to 699 – which is below average – means lenders may bring in risk-based pricing while stating details regarding your mortgage.

In order to cancel out the perceived risk of having to deal with a borrower whose credit score is low, a lender may take the step of increasing the mortgage rate. What does this mean? It means a credit score of 650 is likely to get a higher interest rate than a credit score of 720. This could cost you a fortune more throughout the life of your mortgage.

What’s The Required Credit Score To Buy A House?

It’s estimated that with a score of 660 you’ll probably qualify for a home loan. Though it’s not certain. On the other hand, scores of 660 and below, means you have to deal with a high-interest rate and poor loan terms.

With a minimum credit score of 580, you qualify for an FHA loan. 3.5% of your purchase amount goes to the down payment. However, you’ll be good to go in case of an underwriter intervention. The underwriter assumes the financial risk, and may only require you to carry minimal debt and prove to have a significant amount of savings.

At the moment, the average American’s credit score is 695. That’s relatively high. In case you desire top-level rates, focus on reaching a credit score of about 740 before even thinking of how you can apply for a mortgage.

  • With a credit score of 620 or higher, you’ll comfortably work with conventional mortgages.
  • A credit score of 640 or higher is needed for USDA loans.
  • No minimum credit score is necessary for Veteran Affairs loans.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the second article in this series.

Is It Okay For Non-Married Couples To Purchase A Texas House Together?

Buying A Home With Your BF Or GF Might Just Be A Smart Move In Texas

Some of you may think that it’s a crazy idea, but it has numerous benefits too.

Traditionally, couples would wait to tie the knot before deciding they’d purchase a property together. These days, it has been found out that around 25% of serious couples now consider buying a home even before marriage.

When it comes to real estate and its laws, they rule in favor of married couples. However, this doesn’t mean that unmarried couples don’t have legal rights – they do, but they have to perform certain legal steps. If you’re thinking of buying a residential property with your partner, here are some things that you should always remember:

You Get To Qualify For Better Loans

The lender, whether it be a third party lender or a bank, will take into consideration not just one person’s credit score – but they will look into both applicants separately. This means that there are higher chances that you could both get a larger loan amount, as compared if you’ll be applying for a loan individually.

Expenses Are Split Into Two

This is one of the best things about this – you split your expenses into two. This means that you get to save a couple of bucks here and there, making it easier to save money for your future. This could also be beneficial when we’re talking about your down payment since you don’t have to shoulder everything by yourself.

The Risks of Buying A Texas Home Together

If there are benefits, there could also be a couple of downsides when buying a home if you still aren’t married, and some of these are:

  • The Possibility Of A Breakup

Of course, no one wants to think that they would be breaking up. However, a simple mistake and some misunderstandings can make things a little bit complicated. This is why it is important that you have a legal agreement prior to buying a home to make things less complicated.

  • Could Damage Your Credit Score

During the application process, your name and your partner’s name will also be listed in the mortgage forms and the title as well. Your credit will then rely on your partner’s actions such as them forgetting to make a payment. If you two break up and your ex-partner stops paying, then both of your credit scores will be affected.

  • How To Protect Your Investment

While we’re saying that there’s nothing wrong with buying a home with your boyfriend or girlfriend, there are steps that you can take on your own to make sure that your investment is protected. There’s no denying that this is a great way for you to save money for your future, and there’s no perfect time to start investing in the home of your dreams. However, this decision can also damage your finances just in case the relationship goes south.

With that being said, always seek legal help and talk with an attorney for a legal agreement before you start the purchasing process. You should have at least a contract that outlines how the homeownership works, what happens if the relationship turns sour, or if one of the partners dies. This is the first and the most important step that you shouldn’t skip if you’re planning to buy a house with your boyfriend or girlfriend.

Apply For A Home Loan From Mortgage Lending Texas

When applying for a home loan, it is important that you go with the right company that consists of a team of experienced and reliable mortgage professionals within Texas. Mortgage Lending Texas not only has this team of experienced professionals, but they are committed to making sure that they provide their clients with services that will put their interests first before anything else. Not only that you’ll get multiple loan programs available, but they also offer the lowest rates within San Antonio, The Woodlands, Spring, Tomball, Austin, Dallas, and Houston, TX. Our team of impeccable mortgage professionals who’ve been working with us for years will make sure that they will personally handle your case and meet with you in person to make sure that you’ll get the home loan that is well-suited for your needs. 

Before making a decision, let one of the experts at Mortgage Lending Texas help you find out exactly what loan is best for you.  Feel free to contact us or call us today!