Mortgage Articles

Why Applying For A Texas Mortgage Is Easier Than You Think

3 Reasons Why Owning A Home Is Easy In Texas

Many people refer to owning a home as the “American Dream.” Owning a home comes with several obvious benefits. However, some of these benefits are not so obvious. Some people think it is hard to own a home. It is very easy, and here are some of the reasons why owning a house is easy:

1. 20% Down Is NOT Needed!

You can use the right lenders, grants, and programs to buy with 0% down. First-time buyers can get this from the key bank because the bank offers it as a part of their community service. And you can put down as little as 3% with other loans. Of course, you can improve your offer and lower your rates by bringing more to the table at closing. However, we know it is very hard to save up to 20% in this day and age. This is because of the rent we are facing here in Denver and our daily expenses. But it is possible to attain 20%, which you do not have to use to buy a house.

2. You DON’T Need To Have A Perfect Credit Score!

It is possible to get mortgage loans with any credit score. 720 gets you better rates, but 620 gets you good rates. Do not stop working on your credit because it does not hurt to work on it. However, having the best credit ever does not matter. They accept average credit, but you may never get the best rates as the rates the lenders with 720 or 800 get. But it will never keep you from owning a home. We have amazing connections, and the people in our office are willing to help! So, if you want to start the process, please call us today!

3. The Programs For First Time Home Buyers ACTUALLY Work!

You can find the best fitting home buyer program by shopping around. Several options offer grants to first-time home buyers, and these buyers do not have to pay them back. There are stipulations on the kind of properties you can purchase and how long you will live in the property in some of these programs. The programs have different options, making them a great option in the future. Also, you can reach out because we have information about these programs.

It is now an ‘unattainable’ dream for several millennials and later generations to buy a house because of a lack of education on you how to buy a home. You may think it is hard. It is not that hard! Once you get in there, you see what you qualify for, and you bite the bullet to do it. You can contact us now for advice and guidance!

The Importance Of Owning A Texas Home

Applying For Mortgage In Texas: Can It Change Your Life?

You may be aware that right now it is a buyer’s market for those seeking to purchase a home for the first time. The market has yet to completely reset from the housing bubble experienced years prior. As such, there is greater inventory than there are shoppers for those homes. There are numerous markets in which homes are going for under half of what they may have brought a decade ago. Access to entry is not terribly difficult to achieve, either, as anyone with a steady job and proof of income is likely to receive loan pre-approval. There are many local governments that also offer incentives and grants designed to facilitate first-time home purchases so that empty properties can be filled. This helps a city’s tax revenue, overall culture, and safety statistics.

This all begs the question of why higher numbers of prospective buyers are not jumping at the chance to get into the game. There are always those who do not wish to take out a home loan. They prefer to live with the freedom to move whenever they choose. There are also individuals who are concerned about assuming a massive financial obligation like a mortgage. They may assume that they cannot afford a home loan, but the fact is that they probably can. This is a tremendous time for people to take advantage of current conditions and start reaping the rewards of ownership that include the following:

1. Monetary Savings

Given that a mortgage payment is likely to be far lower than what you might pay in rent for comparable property, you have the freedom to put vast amounts of money into savings or into other financial priorities. A property that would cost $750 monthly to rent may only cost $500 a month to purchase with a mortgage. That amounts to some real savings that can lead to financial independence.

2. Equity Building

When renters write their check every month, that money has disappeared and will not produce any further value. But by making a mortgage payment, homeowners continue to build equity in the property that they can use in the future. Having a stake in the home’s value can help provide a buffer during times of financial uncertainty, including unexpected job loss or illness. Homeownership is a true investment that can build financial security to last for years.

3. Happiness

There is nothing like the sense of satisfaction that comes with making the big decision to purchase a home. While it is a major undertaking, for sure, buying something that is within your means can lead to fulfilled dreams of making your house a place you truly love to be. You will take pride in putting down roots in your local community and enjoy all the fruits of living a more permanent lifestyle.

The bottom line is that homeownership brings with it a seemingly endless list of positive attributes, and there has never been a better time to explore your options. Market conditions are perfect for you to take a leap, so consider initiating the process today.

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!

Why You Should Ask A Help From Mortgage Broker In Texas Pt 2

Top 5 Reasons To Use A Texas Mortgage Broker Right Now

Part 2

2. Ability To Locate The Most Advantageous Rates

Mortgage brokers generally have the ability to access upwards of 3o individual lenders when searching on a client’s behalf. These run the gamut of rates and terms, and brokers can carefully assess what is available and match loan programs to a borrower’s distinct situation. The end result may savings that run into the thousands or more over the length of the loan. Brokers are also privy to exclusive loan programs that buyers may not be able to access on their own.

3. Simplifying The Process

The mortgage industry has experienced a good bit of upheaval during the pandemic, and there is a lot of conflicting information circulating everywhere. This can lead prospective borrowers to feel overwhelmed and confused, something which may prompt them to scuttle their loan plans entirely.

Mortgage brokers have the knowledge and up-to-date insights needed to streamline the process and provide the latest details on available loan programs. This is a godsend for borrowers who might otherwise be discouraged from continuing their search for the right mortgage product.

4. Customized Loan Recommendations

Brokers have a legal obligation to work in the interest of their clients instead of that of the lenders with which they engage. The best brokers are those who work collaboratively with borrowers to learn about their situation, their needs, and their goals to come up with the very best solution.

A seasoned mortgage broker will offer a range of options and information all meant to aid in the making of truly informed decisions. These skilled professionals can also work with borrowers who are in need of refinancing options or even loan repayment forbearances.

5. Streamlining The Application

There is no doubt that purchasing a home is a thrilling prospect, but it does not come without significant stress. Juggling all of the documentation requirements, inspection details, interest rate considerations, and more can make even the calmest person start to worry, and that does not even address the strain that packing, buying furniture, and establishing utility service entails.

However, a top-notch mortgage broker can help shoulder the burden in a way that makes a massive difference. These professionals undertake all of the research duties related to your home loan, determine how much you are qualified to borrow, and manage the application process all the way through to completion. This is a significant thing for those who are already taxed by the logistical planning that moving inevitably involves.

By taking the time to find a reputable mortgage broker that you can trust, you can save yourself many of the headaches you would surely face by trying to go it alone. Align with a seasoned, skilled mortgage broker to aid in your home loan search, and lighten your load today.

Feel free to contact or call us to speak with our mortgage professional for any help you need with your home loan application. We hope to work with you soon! Click here to go to the first article in this series.

Why You Should Ask A Help From Mortgage Broker In Texas Pt 1

Top 5 Reasons To Use A Texas Mortgage Broker Right Now

Part 1

Those seeking to purchase or refinance a home understand that there are seemingly countless lenders available on the market from which to choose. Selecting the best from a very crowded field can make all the difference in terms of the interest rate and loan specifics that will ultimately apply. This is especially true amid the pandemic when information and policies seem to be changing all the time.

Mortgage brokers are highly-skilled professionals who can assist borrowers in navigating the market’s intricacies, with the overall goal of steering them toward the home loan that truly meets their needs and provides real financial value. Continue reading to learn more about the duties of a mortgage broker and why they are an indispensable part of the home buying or refinancing process.

What Mortgage Brokers Do

Mortgage brokers effectively serve as a middleman, standing between borrowers and lenders throughout their home buying or refinancing journey. If you are looking to borrow, a broker will represent you in the search for lenders willing to provide you with the most competitive interest rate and loan terms. They also serve as facilitators for the entire mortgage process, from initial application to closing.

Key Mortgage Broker Tasks

Because a mortgage broker understands the ins and outs of the loan process, they can provide the guidance borrowers need at every step along the way. Skilled brokers take the time to understand your objectives and your specific financial circumstances. They will explain the various loan programs for which you may be eligible and outline the cost involved with them. Brokers also handle the application process and see you through every phase until your deal actually closes.

Cost Of Mortgage Broker Services

The services of a mortgage broker are ultimately covered by lenders, rather than the home loan borrower. Brokers will receive commissions for suggesting a particular loan product when it is selected and received by an applicant. As such, borrowers don’t usually pay anything for the broker’s services.

It should be noted, though, that there are certain situations in which a broker fee will be charged to the purchaser. This amount may be in place of, or even in addition to, commissions paid by the lender.

Key Reasons To Employ Mortgage Brokers

1. Familiarity With Changing Lender Requirements

The coronavirus pandemic has caused numerous home lenders to change policies with alarming frequency. A number of lenders have altered eligibility requirements, documentation rules, and more. Submitting an application directly to a lender while unaware of recent changes can cause the approval process to be delayed or scuttled altogether. Brokers, however, remain fully apprised of any and all such changes, making it easy for them to adjust your applications on the fly, something that can increase your chances of success.

Feel free to contact or call us to speak with our mortgage professional for any help you need with your home loan application. We hope to work with you soon! Click here to go to the next article in this series.

 

An Easy Guide For A Mortgage Loan Approval In Texas Pt 2

8 Tips To Getting Your Texas Home Loan Approved

Part 2

4. Take Advantage Of A Mortgage Calculator

A mortgage calculator is a handy tool you can use to see if your finances/income can support a payment scheme. The calculator highlights how much you would be required to pay for different homes, loan tenure, interest rates, and annual income.

5. Know What You Can Afford

Analyze your finances and income to see what you would be able to afford comfortably. See how much you can spend on a home without stretching your finances too much. Doing so eliminates the risk of falling in love or bidding on a house you wouldn’t afford, hence no financial and emotional stress.

6. Boost Your Savings

Never walk into a lender’s office with no cash for a down payment. Most lenders will require you to have at least 20% of the home’s initial value before they can approve your loan. Whatever amount you had saved for the home, beefing it up will not only give your credit position a boost but also help lower your total mortgage balance. It is worth noting that, a part of your savings will go towards paying for several other expenses that come with property purchase. These include home appraisals, title recoveries, and legal fees, among others. Cutting down your spending and budget to save more or looking for extra income streams to save for the house will go a long way in boosting your savings.

7. Make Sure All Required Documents Are Ready

You will need an up-to-date ID and correct, current physical address to be eligible for a mortgage. You thus need to ensure all necessary documents are in your name and current physical address. Prepare all financial documents that the lender may need before setting foot in their office. Most lenders will need proof of income (payslips, employment certificate, ITR, etc.), relevant collateral documents, government-issued ID, and revenue for self-employed persons. Have these documents ready when submitting the application.

8. Open Your Lines Of Communication

Your official communication channels/lines must always be available, just in case the lender decides to call. Keeping the lines open means you’ll be able to respond to any requests they make promptly. This is especially crucial soon after applying. You don’t want to miss out on the loan simply because you didn’t see their call or weren’t able to respond to their email on time.

Contact us or call us anytime to speak to a qualified mortgage professional directly. Click here to go to the first article in this series.

An Easy Guide For A Mortgage Loan Approval In Texas Pt 1

8 Tips To Getting Your Texas Home Loan Approved

Part 1

Are you looking to buy a home but not sure where to start? Well, the first step to take would be to get your finances in order. This means checking to see how much you have saved for the purchase and if you are eligible for a home loan. Almost every financing institution will look into your credit score and financial history before approving your application. Whatever your credit rating is, you still might want to boost your chances of having the loan approved. Here are a few tips on how:

1. Know Your Financial Capacity

Lenders will, without a doubt, look into factors such as your credit history, income, and debt service ratio when processing your loan. Putting yourself into the lender’s position can help you identify areas you might need to work on to improve your chances of getting the loan. This means evaluating and determining your financial capacity even before contacting the lender. Check to see how much you have saved for the down payment, liabilities, monthly income, and assets to see if it’s enough to qualify for the loan. Talking to your preferred lender about this (beforehand) could help too.

2. Ensure Your Credit History Is Clean

Most people never take a chance to review their credit history, at least not until they want to apply for a loan. While you might have been able to pay all your bills and debts on time, your credit report might still have some errors. You might also have forgotten to pay a loan from another lender, all of which is recorded on your credit records. It would thus be wise to take a moment of your time to review your credit rating every once in a while to see if it’s up to date and free of errors.

Start cleaning your credit history by paying bills on time, clearing any unpaid loans, get a certificate for the same, and have the report updated. Be sure your credit history is clean before applying for the loan to boost your chances.

3. Create A Sense Of Financial Stability

Many lenders will dig deeper into your financial records to see if you are stable financially or not. That said, strive to maintain a steady cash flow and avoid getting into a new debt before and during the processing period. This means sticking with your employer, avoid making significant purchases, or quitting your job to start a new business. Lenders will consider you a risky client, hence deny your request.

The next step would be to keep your credit card balances as low as possible. While you could still continue using them, avoid any urge to pay for a trip using the credit cards, co-signing another loan, or financing a new purchase, say a car or boat.

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

A Deeper Understanding About Texas Mortgage Interest Rate Changes

Home Loan Interest Rate Changes In Texas: How Important Are They?

News about interest rates going up may be a concern to you if you’re going to purchase a home soon. You might be worrying about being able to buy a home at all, or having to get a home that is less than ideal because you can’t deal with the higher rates. How much of an impact to interest rates really have in home purchases, and when buying a home, how much attention should you give them?

When Looking For A Lender, Is It Necessary To Consider Interest Rates?

A variety of interest rates will often be advertised by lenders during the shopping phase. Think about this before using these rates to comparison shop:

There’s only around a quarter or eighth of percentage points difference between mortgage rates, which is pretty small. In terms of monthly payments, the impact that rate differences have will not be significant. This means that you should pay closer attention to the services that lenders provide, because although monthly payments and rates are factors, the services shouldn’t be forgotten. You should also learn about the speed of the loan process and how much a lender knows about new home loan regulations and laws. Compared to a multi-month closing delay, paying a little bit more on a rate is nothing.

What Should You Pay Attention To When Considering Lenders?

A key component that will affect a monthly payment is the APR or Annual Percentage Rate. While important, the quality of the service that a lender offers should be your main focus. When choosing lenders, look for the following:

  • The reputation of the lender
  • The lender’s ability to make the transition as smooth as possible with proper guidance
  • APR, fees, points, and other associated costs

Points

Interests that are prepared when closing with a lender are called discount points, also simply known as points. Monthly payments and interest rates are usually lowered with the use of points. One percent of a loan is equal to one point, so on a loan of $200,000, the rate would be reduced by one point when $2,000 is paid.

Fees

In order for the loan to be processed, some fees may need to be paid. Appraisal fees and title insurance are common fees, and there are some lender specific ones that may arise. All fees, interest rates, mortgage insurance, and title charges must be provided by every lender in a document called a good faith estimate. While only having an estimated amount, the document still makes it possible to compare the mortgage costs that are associated with each lender before deciding on one.

Annual Percentage Rate (APR)

Lender fees, discount points, and sometimes mortgage insurance can be included in the APR. Most of the time, APR is a little higher than a loan’s regular interest rate.

Every possible factor should be examined when you apply for home loans. Interest rates should be acknowledged, as they they are important, but it is also important to get a lender that is knowledgeable and will give you the best service.

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!

Helpful Guide For Applying An FHA Loan In Texas Pt 2

All You Need To Know About A Texas FHA Loan

Part 2

FHA Loan Limits

Regardless of the FHA loan type you’re looking for; there will always be a limit on the mortgage. These limits are contingent on the county. FHA loan limits as of 2020 range between $331,760 to $765,600.

How To Qualify For FHA Loan

To be eligible for an FHA loan, you will have to satisfy certain requirements. It’s essential to not these are the minimum requirements for FHA, and lenders may opt to have more stipulations included. To ensure that you receive the best FHA loan terms and mortgage rate, look around for various FHA-approved lenders and compare their respective offers.

Credit Score

The minimum credit score you should have to receive an FHA loan is 500. You still qualify for an FHA loan if your credit score ranges between 500 and 579, but you’ll be required to make a significant down payment. Note that these are FHA rules – lenders can decide to go for a higher minimum credit score.

Down Payment Funds

If you have a credit score of over 580, your loan down payment can to as low as 3.5%. A credit score between 500 and 579 means 10% of the buying price will be dropped.

The upside is that the money doesn’t need to come from your personal savings. Gift money can be used to pay for your down payment so long as the donor writes a letter describing what sort of relationship they have with you, their contact information, gift amount, and a statement saying no repayment is needed.

Debt-To-Income Ratio (DTI)

The FHA needs a DTI that’s less than 50, which means that your monthly debt payments can’t exceed 50% of your gross income. This encapsulates debts you aren’t actively pursuing.

In the case of student loans that may be in deferment, your FHA loan will include 1% of the total loan as the monthly repayment amount. For any other loans you aren’t actively repaying, 5% of the total loan amount will compute your DTI.

Property Approval

The property you’re trying to purchase with an FHA loan, be it a condo, a house, a manufactured house, or a multifamily house, has to adhere to FHA minimum property requirements.

The FHA needs an appraisal that’s different from a house inspection. They want to be sure the house is a good investment – worth more than the initial amount you’re paying – and make sure that it has met livability standards and basic safety.

Mortgage Insurance

For every loan issued, FHA mortgage insurance is included. When you receive an FHA mortgage, you’ll be required to make an initial mortgage insurance payment (which can be included in the total loan amount), from where you’ll make monthly payments.

How To Apply For FHA Loan

Making an FHA loan application will need personal and financial documents that include:

  • A legal Social Security number.
  • Proof of citizenship, eligibility to work in America, or legal permanent residency
  • Bank statements for the last 30 days. You’ll also be required to offer documentation for any cash deposits done at that time (often pay stubs).

Advantages Of FHA Loans

  • Down payments for as low as 3.5%.
  • Debt-to income ratios that go as high as 50 are permitted
  • Lower minimum credit scores compared to conventional 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 first article in this series.

Helpful Guide For Applying An FHA Loan In Texas Pt 1

All You Need To Know About A Texas FHA Loan

Part 1

An FHA loan is basically a mortgage that’s been insured by the Federal Housing Administration. It allows down payments for as low as 3.5% with a 580 FICO. If you are a buyer with lower credit scores or limited savings, you should consider applying for FHA loans.

Regardless if you’re sure that an FHA loan is perfectly suited for you or you want to know what the FHA is, here’s a breakdown of all you need to know. You don’t need to delve into the FHA handbook for answers; find all the answers to FHA FAQs right here.

What Is An FHA Loan?

This is a mortgage that has been insured by the Federal Housing Administration. Borrowers with a credit score of 580 or more are eligible to get a minimum of 3.5% down payment. FHA loans are sought-after by first-time buyers with credit issues or little savings.

The FHA insures mortgages given by lenders such as credit unions, banks, and nonbanks. Upon default of the said loan, that insurance is in place to protect lenders. This is why FHA lenders are more than eager to provide favorable terms to borrowers who may be eligible for a home loan.

What Is The FHA?

The FHA, or as popularly referred to, The Federal Housing Administration, has been part and parcel of the U.S. Department of Housing and Urban Development since 1965. However, the FHA was founded over 30 years before that, as part of the New Deal.

In addition to the Dust Bowl drought and stock market crash, the Great Depression was marked by the housing market collapse. By the start of 1933, an estimated half of U.S. homeowners had defaulted their mortgages.

The FHA was founded under the National Housing Act of 1934 to cut foreclosures and make homeownership affordable. It put in place the 20% down payment as a new practice, insuring mortgages for up to 80% of a house’s value – in the past, homeowners were limited to borrow up to 50-60%.

What Are The Differences Between A Conventional Loan & FHA Loan?

  • Compared to Conventional Loans, FHA loans permit lower credit scores and, in some circumstances, low monthly mortgage insurance payments.
  • FHA loans may have closing costs not required by conventional loans
  • FHA regulations are more open-minded when it comes to gifts of down payment cash from employers, family, or charitable organizations.

Various Types Of FHA Loans?

The FHA provides various loan options, from relatively standard purchase loans to products specially made to meet highly specific needs. Here’s a look at FHA loans used to purchase a house:

Common FHA Purchase Loans

Basic Home Mortgage Loan 203(b)

  • Fixed not adjustable rates.
  • Various types of houses are eligible.

203(k) Rehab Mortgage

  • Renovation and Finances purchase with a single loan.
  • Buy and refi choices are available.

Construction to Permanent (CP) Loan

  • Finances the construction of a house together with the land on which it will be built.

Title I Properly Improvement Loan

  • Used for repairing an existing house or buy a manufactured home.

Energy-Efficient Mortgage(EEM)

  • Funds energy-efficient upgrades during a refinance or home purchase.
  • Available for existing or new homes.

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.

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.