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 The Texas Mortgage Pros

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. The Texas Mortgage Pros 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 The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

Why Buying A Texas Home Is The Next Best Thing

Benefits Of Owning A Home In Texas

A home is one of the most significant investments anyone can make. Many believe that owning a home is a gateway to both short and long-term financial success. Owning a home means you get to build equity over time (long term) as well as enjoy potential tax breaks. You also never have to worry about rent or the landlord knocking on your door. The peace of mind that comes with owning a home is simply worth it.

First-time homebuyers get to notice the difference in financial success firsthand. Homeownership is not only transformative but also helps one build personal wealth through home equity. You can also work towards increasing your home’s market value through renovations and other advancements. The fair market value of the house is also deemed to increase with time; another reason why more people are willing to invest in their homes.

Many millennials today prefer regions with a warm climate and proximity to the ocean, among other factors. This makes Texas one of the most preferred cities to live in the country. With several large universities in Texas and biotech presence, more youths will do anything just to own a home here. The warm weather, beautiful restaurants, extensive neighborhoods, etc. are some of the factors that make Texas one of the first places a new homeowner will consider to settle.

While life in Texas may be exciting (not forgetting the beaches), rental houses here can be quite expensive. Interestingly, vacancy rates in Texas apartments are also very low despite rents increasing by the day. The high rent rates and low income, however, makes it hard for renters to find the perfect place to live, especially with the limited supply of rentals. Buying a home here is the next best thing you can do with your money. Use the money that would have otherwise gone to rent, on mortgage payments. The long-term benefits of owning a home are far much better than renting an apartment.

A home is an asset. Making timely payments for your mortgage increases its equity which will work in your favor in many ways. For starters, paying your mortgage improves your credit score as well as tax benefits. The anticipated growth in housing market rates works in your favor too. The same cannot, however, be said for paying rent each month.

A mortgage works in favor of your credit score. The fact that you have a home loan alone diversifies your credit profile, meaning you’d be able to access larger loans in the future. Many credit companies consider mortgage a ‘good’ debt and will be willing to work with you. One of the reasons for this is the fact that the loan is tied to the house (asset). Your credit score will, however, only improve if you have a positive payment history for the mortgage. Making mortgage payments on time helps improve your credit rating and reputation as a responsible borrower as well.

Going for an affordable home comes with several tax benefits as well. This is because you are allowed to make deductions for your mortgage interest from your income. Other deductions allowed by the IRS include closing costs and annual property taxes. Some of these tax incentives are geared to help homeowners grow their wealth.

A house, like any other asset, can appreciate in value over time. The strategic placement of Texas, with the scenic beaches, good weather, and the port is what attracts many people here. With Texas growing by the day, chances of your property gaining value are high. Other factors that make Texas attractive, and the ideal place to buy a home, include location, young population, and strong business presence. Statistics also show that properties in Texas will be more expensive several years down the line, thanks to its strong business presence and growth.

There is more to buying/owning a home than just the transaction bit. The first step is finding out how much you can afford for a house. The next step is to identify the type of available loans and fees that come with the same. A Home Loan Calculator is a handy tool that anyone can use to figure out how much they can afford, as well as interest rates from the loan amounts. Be sure to use the Texas Mortgage Pro’s infographic for help on how to buy a home. We also have a Down Payment Calculator that lets you estimate how much you can put down upfront, and the expected total interest to be paid within the life of the loan.

Homeownership is a process that requires lots of support and information. The Texas Mortgage Pros are happy to provide you with all these. All you need to do is use our online application portal to start the process of getting a home loan.

We have a team of mortgage experts all over Texas willing to help you every step of the way. We are always committed to providing our clients with the best quality service possible for their mortgage needs. We also offer multiple loan programs at the lowest rates in San Antonio, Spring, Tomball, Dallas, The Woodlands, Houston, and Austin in Texas. With many years’ worth of experience in this field, we can make your dream of owning a home come true by helping you get a home loan specifically meant to meet your expectations and situation. Our program officers will help you with anything from refinancing an existing mortgage, loan consolidation, and if looking to buy your first home.

Our goal is to not only help you own a home, but also create a lasting relationship with all our clients. We also guarantee total privacy with your information. Give us a call or contact us today for whatever help you need to make your dream of owning a home a reality.

Discovering & Identifying A Great Mortgage Lenders In Texas

Useful Advice For Finding The Best Possible Texas Mortgage Lenders

Going through the process of finding a great mortgage lender and then getting pre-approved for your own loan is a sequence of crucial steps that must be done in a certain order. When you work through each of these steps systematically, you put yourself in a great position for the fast approval of a good loan.

While you likely aren’t too worried about doing heavy vetting of the lender you pick for your loan, you might want to reconsider. Picking your mortgage lender will wind up being among the more substantial choices you make throughout the whole housing purchase process. Keep in mind, you’re going to be working with your chosen lender for several decades into the future.

How to identify great mortgage lenders? Well, mortgage lenders are professionals working for financial institutions, such as banks, who are responsible for the approval or rejection of new home buyer loan applications. If you’re like most people, then your pending home purchase might just be the single largest financial transaction of your life. It’s crucial to make sure the best professional is at your side in order to guide you through this process.

Finding a great lender means identifying a veteran professional that works with your particular loan specifics. You need a lender who actually works with the kind of loan that you’re hoping to get, one who can approve the loan amount you want, and one that’s able to work with borrowers that fit in your particular credit profile. The right lender selection might just make or break the entire home-buying experience for you.

How Do You Find Mortgage Lenders?

1) Check Out Your Credit Score

Prior to starting anything in regards to your search for a mortgage lender, check your personal credit score. You need everything lined up just right, and your credit score is one of the biggest factors that will impact your approval or denial for any mortgage loan. Potential lenders use your credit score in determining your creditworthiness, what sort of rate they can provide you, and how much total they can safely lend to you. Use online services to find out your score as it is now, so you’ll have a better idea of what you can and can’t qualify for.

2) Identify Credit Report Errors & Dispute Them

While having knowledge of where your credit score is proving helpful, you need to take the extra step of being sure the report is accurate. You want it to demonstrate your current financial picture in a good way. Credit reports are known to have negative marks, errors, and mistakes that shouldn’t be there.

Take enough time to go through the whole report entirely to be sure any and all information is accurate and current. When you find any discrepancies, contact the institutions or companies responsible for the erroneous information in order to get things corrected. Even the smallest of discrepancies can leave a serious effect on your overall score, and that can render you unable to get a pre-approval for your mortgage loan.

3) Collect All The Require Documents

Prior to shopping lenders and putting in mortgage applications, you need to be sure that you have collected all the necessary documents in one single place. You can make this whole process far more painless if you do all this before you look. The most crucial documents you’re going to need are copies of your credit reports, tax returns, bank statements, asset statements, photo ID, a detailed renting and/or purchasing history, and pay stubs or tax documents such as W2S and 1099S. If anyone is giving you money for assistance in home buying, then you need written confirmation of those funds that clearly stipulate the gift instead of a loan, as well as an explanation of the relationship that person has with you.

4) Compare & Contrast The Various Kinds Of Loans That Are Available

Once everything is ready on your side of things, you need to start looking over the available loan options. If you’re totally new to all of this, then you might not be aware that not every loan is the same. Various kinds of loans you can pick from including their own pros and cons, as well as different limits and terms, among other things. Popular options include interest-only loans, fixed-rate loans, conventional loans, VA loans, and ARM or FHA loans, which stand for Adjustable Rate Mortgage and Federal Housing Administration.

5) Ask Trusted Sources For Suggestions

It’s a good idea to consult veteran buyers and those with industry experts for insights into the whole process. They can provide you do’s and don’ts that only get learned from experience. Just make sure you can trust your sources of suggestions and recommendations. You might have family and friends offering you advice, and they likely want the best for you, but good intentions don’t always mean sound financial advice. Understand the sources of recommendations in order to weigh the suggestions properly.

6) Figure Out What Matters To You

Once you have sufficient information about your options, the time has come to decide what’s important to you and what isn’t. Make sure that you know the differences between what you need and want. Writing down your list on paper can really help with this part. It’s just not possible to know what it is you’re seeking if you don’t actually know what specifically it is that you want. Have a fixed target in your head before you shop lenders.

7) Compare Every Lender Based On Your Most Crucial Criteria

Once you finish each of the six prior steps, now you can start looking into lenders. If you save this particular step until the end of the process, you’re making sure that you’ve had the chance to get fully educated about the whole process. This will protect you from committing needless errors, missing good opportunities, or misinterpreting anything that might cost you dearly. In this step, you need to identify any potential lender who meets your criteria, and then you can start comparing them all. Look at factors like lender reputation, conditions, terms, rates, and anything else that might apply to your own home-buying situation.

In Conclusion

Purchasing a home should be a wonderful adventure, provided that you do all that you can to make sure it all proceeds smoothly. Picking your lender is one of the biggest choices you’ll make along the way. It’s easy to find mortgage lenders, but finding the right one isn’t quite so simple.

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

Knowing Why Purchasing A Texas Home Right Now Is So Important

Top 10 Reasons You Should Purchase A Home Right Now In Texas

Homeownership is something that has always been seen as one of the most important milestones for reaching adulthood. It is also coined as the cornerstone of the “American Dream.” Unfortunately, the 2008 recession resulted in an unprecedented number of home foreclosures. During this period of time, over 3 million Americans were forced out of their homes in foreclosures which represented an 81% increase from the previous year and a whopping 225% increase from 2006. Because of the post-recession economic climate along with other factors, younger Americans have found it much more difficult to become first-time home buyers. However, despite the drastic delay, a lot of Millennials still value homeownership and view it as the superior option over renting.

1. House Prices Typically Rise Over Time Which Makes It A Solid Investment

At this point, we are around 4 to 5 years removed from the biggest housing bust in history. Prices have since come down drastically ranging anywhere from a 20 to 50% decrease in various areas from their peak levels. Whereas, home prices in the United States have risen 3 to 6% per year for the past 20 years and that trend is only expected to continue. Therefore, if you purchase a home right now, you are securing your investment in something that has been and will likely continue to be a very safe investment that you will see appreciation with.

2. You Will Pay Less Tax

You will be able to deduct the interest that you end up paying on your mortgage when you are filing your taxes. This is due to its ability to decrease your taxable income. Therefore, new homeowners that have home loans will be able to get the largest benefit. The newer your mortgage, the higher the interest payments you will be making which can help provide you with significant tax breaks. Because real estate taxes are deductible, you will be able to experience great benefits as a homeowner which can make owning a home cost less than renting one.

3. Sell Your Home Whenever You Want

You aren’t locked into your homeownership. You can sell your home and avoid paying capital gains tax. After selling your current home, you can always upgrade to a larger one.

4. You Have Your Own Home

You will be able to own your home and do with it as you please. When you are renting, you have to live by the landlord’s rules. When you own your home, you will be able to paint it, punch holes n the walls, and make other changes that would be impossible if you are renting.

5. Low-Interest Rates

Because of the current market, the interest rates are low which means you can acquire a home loan for a bargain. In some areas, you might even find a mortgage is cheaper than what you would pay in rent.

6. Peace Of Mind

When you own your home, you will have peace of mind knowing that you will have a fixed cost that isn’t going to suddenly rise. When you are paying rent, you never know when your landlord is going to significantly spike your rent or decide that you cannot rent from them anymore for whatever reason.

7. Forced Savings

By putting your money into your home, you will be forcing yourself to save money as you will be paying your mortgage each month which will go to the principal of the loan. It is essentially a forced savings plan and it can be extremely useful to consider when you are ready for retirement.

8. Pride

Being able to own your home can really give you a sense of pride.

9. Pets

As a renter, you have pet restrictions. As a homeowner, you will be able to house any pet you want.

10. Buyer’s Market

You won’t have to settle for anything. It is a buyer’s market that puts the negotiation in your favor. Therefore, you can find the house of your dreams.

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

The Characteristics Of An Adept Mortgage Lender In Texas

Top 5 Qualities To Look For In A Texas Mortgage Lender When Purchasing A Home

Are you currently looking for a mortgage lender? If so, the five tips below can not only speed up the home-buying process but can also save you a lot of money, both now and on your future mortgage payments. As you compare lenders, look for one that has all of these essential characteristics.

1. Look for a lender that specializes in mortgages.

The two primary types of lenders that provide mortgages include big banks and smaller mortgage companies. In today’s financial climate, it is important to understand the difference between the two. Not too long ago, major economic events resulted in increased government regulations for banks. While big banks have to jump through a lot of hoops to provide loans, smaller mortgage companies have a little bit more flexibility. Since they only focus on providing mortgages, they are a lot more knowledgeable about how to make deals happen. Thanks to their experience with appraisers, underwriters, and borrowers, they make the process of getting a mortgage as easy and affordable as possible.

2. Look for a mortgage provider that is familiar with all of the loan options available for the property you are buying.

One of the most important tasks for any mortgage lender is to keep up-to-date with all of the loan programs that are currently available. Going with the right type of loan can make a big difference in how much you have to put down on the property, how much interest you pay over time, and how much your ongoing payments are. Some loan programs may even help you negotiate more effectively on the purchase price of the home.

3. Choose a lender who is willing to give you a preapproval letter rather than a prequalification letter.

Even though prequalification and preapproval sound like the same thing, there are key differences between the two. Before issuing a prequalification letter, a lender will review your finances, including looking at your income and expenses, debt, assets, and credit score. As long as you meet certain qualifications, they will grant you a letter. To get prequalified, you can usually self-report these figures without needing to provide any documentation. Preapproval, on the other hand, takes things one step further. With this process, you actually provide financial documentation to the lender. Having a preapproval letter in hand lets sellers know that you are ready to go through with the purchase, which may improve your chances of having your offer accepted.

4. Working with an experienced loan officer can mean the difference between success and failure when purchasing a home.

The lending process is usually completed in about a month and involves approximately 10 steps. The loan officer manages a variety of different tasks, ranging from gathering and verifying data from the borrower to learning more about the property. Behind the scenes, a wide range of mortgage professionals is communicating with one another. This includes the loan officer, the real estate agent, the appraiser, the underwriters, and the home inspector. The borrower’s finances and credit history are carefully examined. The home is also inspected to make sure that it is in good enough condition to purchase. Experienced loan officers generally do a better job of managing communications between all of these different parties. This can improve the chances of the loan being approved.

5. Choose a mortgage lender that you can trust.

Mortgage lenders need to carefully examine all of the details of your life, ranging from where you work to how you spend your money and how well you manage your credit. Professionals in the mortgage industry are legally required to keep your information confidential. It is important to understand, however, that you will be taking over a lot of personal details with the loan officer. That is why it is important to choose someone trustworthy.

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

What Are The Things To Avoid When Applying For A Texas Mortgage

6 Things You Must Never Do When Applying For A Mortgage In Texas

Applying for a mortgage is never an easy process. Although you might have been pre-approved or have all the documents ready to make an application, it is never a done deal until you have signed the closing papers. Whether looking for refinancing for your current home, or wish to buy a new one, specific actions can give the underwriter the impression that you aren’t in a position to repay the loan. This is one of the reasons you need to be careful right before and after applying for a mortgage. Here are some of the things you mustn’t do:

1. Avoid Making Large Withdrawals Or Deposits

Making large deposits and withdrawals from your account a few weeks too and after applying for the mortgage could raise a red flag, causing the application to be denied. Recent bank statements are a standard requirement when applying for mortgage loans. If for one reason or another happen to make a large withdrawal or deposit, you then should discuss the same with your mortgage office when submitting the application. Although such deposits/withdrawals may not be a deal-breaker, the nature of the deposits and the source of the funds should be discussed before the application is made. This will help avoid red flags when the application is being processed.

2. Don’t Change Jobs

You also need to provide proof of income (steady) for the mortgage to be approved. That said, you should avoid jumping from one job to another until the mortgage has been processed, approved/closed. If you must, then ensure the new job is within the same industry/niche as the previous one. Switching to a different industry might raise red flags, costing you the mortgage.

3. Don’t Make Large Purchases On Credit

As tempting as it is fighting the temptation to buy a new car or furnish your new home on credit. For starters, making such large purchases on credit means the company will have to pull your credit report, which again could hurt your credit score. Most lenders will see such a large purchase on credit as a risk hence avoid lending you.

4. Avoid A Home Equity Line Of Credit

As earlier mentioned, don’t make any large purchases on credit or even put your home as equity for the same. Although you are free to use your home as a line of credit, the lender may think you rely too much on credit, hence consider you a high-risk customer. As a rule of thumb, show the lender you are capable of living comfortably with your income flow and don’t depend on loans or credit lines. Wait until the loan is closed before using such lines of credit.

5. Avoid Closing Credit Accounts

Avoid the temptation to close any (or all) credit accounts you might have (even if you no longer use them) several months or days before and after applying for a mortgage. Closing these accounts will only lower your available credit, raise your DTI (debt to income ratio), and other chain reactions. Closing these accounts will only put your mortgage at risk, hence not recommended for the moment. Be sure to talk to a financial advisor if thinking of closing one or two of these credit accounts.

6. Don’t Make Payments On Old Collection Accounts

Making payments on old collection accounts could hurt your chances of getting the mortgage approved as well as your credit score. Making payments to these accounts also revives their collection status, meaning the creditor can start pursuing you for debt. Although this depends on the state you are in, creditors can only pursue you for payment for up to 10 years after the last payment.

Contact our expert mortgage professionals, call us today or use our interactive tools that are on offer on our site. We cant wait to meet you.

A Guide When Applying For A Texas Mortgage This Year 2020

Minimum Texas Mortgage Requirements For 2020

If you want to purchase a home this year and wondering how to qualify for a mortgage, you can find the right loan program by learning the minimum borrowing guidelines. In 2020, mortgage options will be available at relatively higher loan amounts that indicate the increasing home prices across the U.S.

By going through the guidelines for the most popular loan types, you should know the amount of mortgage that you can qualify for.

Conventional Loan Requirements

Undoubtedly, conventional loans are the most common mortgage option, but no government agency guarantees them. Compared to the borrowing requirements for government-insured loans, Freddie Mac and Fannie Mae set conventional loan standards, which are stricter.

If you want a mortgage for a more expensive home, it’s much easier to qualify this year since loan limits are increasing up to $510,400 for a majority of the country in 2020. For conventional lending, below are the latest minimum mortgage loan requirements.

A Conventional Loan’s Current Minimum Requirements

  • Down payment. For conventional loans, the minimum down payment is usually 3% and can come as a gift from a family member or simply your money.
  • Mortgage insurance. The lender needs security with private mortgage insurance (PMI) for conventional loans that have less than 20% down in case you default. Each year, you’ll pay anywhere between 0.15% and 1.95% of your loan amount; however, the premium can even exceed 2.5%, especially if you have a small down payment and a low credit score. Typically, you pay the premium as part of your monthly payment, but you can also pay in a lump sum upfront during closing.
  • Employment. Since lenders need proof of your steady income, they’ll review your income and employment history from the past two years. Those with variable incomes and self-employed borrowers alike will need to present extra paperwork to verify income.
  • Credit score. For a conventional mortgage, the minimum score is 620. Most likely, you’ll receive a more favorable interest rate offers with higher credit scores.
  • Income. There are no income limits with many conventional loans. Freddie Mac’s Home Possible loans and Fannie Mae’s Home Ready, however, demand that borrower’s incomes should fall within that area’s income limits.
  • Occupancy. Generally speaking, conventional financing can be useful in purchasing a primary residence, an investment property that you can rent out, or a second home (also called a vacation home).
  • Debt-to-income ratio. The measure of your overall debt divided by your specific gross income is your debt-to-income ratio (DTI). A DTI of 45% or less is much preferable to most conventional lenders but might extend it to 50% with considerably higher credit scores, along with additional cash reserves. Mostly, borrowers with DTI ratios exceeding 45% might be needed to have a minimum credit score of 740 by private mortgage insurers.

FHA Loan Requirements

One of the most accessible home loans to obtain is a mortgage-backed by the FHA or the Federal Housing Administration. Since the FHA insures the mortgage, there are more favorable terms and rates available with FHA-approved lenders, particularly to first-time homebuyers.

Borrowers trying to qualify for a mortgage for high-priced homes will have some relief in 2020. In most parts of the country, there has been an increase in the FHA loan limits to $331,760 in 2020. Affluent areas might receive even more FHA bang for the buck since the maximum loan amounts can stretch up to $765,600.

An FHA Loan’s Current Minimum Requirements

  • Down payment. Whether it’s from your funds or as a gift, FHA demands a 3.5% minimum down payment. With a credit score ranging from 500 to 579, the down payment goes up to 10%.
  • Mortgage insurance. There are two kinds of mortgage insurance when it comes to FHA loans. The upfront mortgage insurance premium (UFMIP) can be rolled into your particular loan and is often 1.75% of the loan balance due. As part of your monthly payment, you’ll also incur an annual mortgage insurance premium (MIP), and those costs vary between 0.45% and 1.05% of the loan amount. Regardless of credit score, FHA mortgage insurance premiums are similar.
  • Employment. Typically, FHA loan requirements focus on the consistency of employment and earnings for the last two years. Job hoppers must explain gaps or changes in employment.
  • Credit score. With a 10% down payment, you can have a low credit score of 500. Homebuyers will require a minimum score of 580 if they make a 3.5% down payment.
  • Income. FHA loans have no income limits. In most parts of the country, the maximum FHA loan is, however, capped at $331,760 as opposed to $510,400 for conventional loans.
  • Occupancy. Whether it’s a single-family or multi-unit property, the property must be your primary residence for a minimum of one year after buying it.
  • DTI ratio. FHA loans have a front-end DTI ratio of 31%, while the back-end ratio is often 43%. Only housing-related costs matter with the front-end ratio, such as your insurance, property taxes, and monthly mortgage payment. Meanwhile, the back-end ratio considers credit card payments, car loans, mortgage payments, and other recurring debt payments. With proof of extra cash reserves or strong credit scores, higher DTI ratios might be approved.

VA Loan Requirements

Generally speaking, the U.S. Department of Veterans Affairs makes it much easier to qualify for a mortgage loan, especially for active-duty military personnel, eligible spouses, veterans, and reservists. There are no longer loan limits with VA mortgages in 2020. That implies that VA borrowers may be in a position to purchase homes with VA financing instead of a jumbo loan, or perhaps financing for loans that surpass conventional loan limits.

A VA Loan’s Current Minimum Requirements

  • Certificate of eligibility. If you want to qualify for a VA loan, a VA loan certificate of eligibility (COE) will be necessary since it proves you satisfy the military service requirements demanded by a VA loan. Most lenders can acquire a COE online; however, veterans and military personnel can apply for one online.
  • Mortgage insurance. No PMI is needed since the VA guarantees loans given to eligible borrowers.
  • Down payment. For a VA loan, no down payment is needed. Lenders might, however, demand a down payment, especially if the loan surpasses standard loan limits. The source of your down payments can be your funds or simply a gift from an employer, a close friend, a relative, charity, or government agency.
  • Funding fee. Many VA loans have this fee to defray the program cost to taxpayers. Generally, the amount varies depending on the down payment amount, the VA loan benefit usage, and the type of service. If military borrowers have service-related disabilities, they might be eligible for a waiver. VA funding fees jump to 0.15% for those borrowers who come up with 10% or less of the buying price. That sums up to an additional $1,500 in funding fee costs per $100,000 borrowed.
  • Employment. Proof of two years of employment is necessary, and the only exceptions are recently discharged veterans.
  • Credit score. Although there’s no credit score requirement with a VA home loan, VA-approved lenders need a 620 score.
  • DTI ratio. 41% is the preferred DTI ratio. VA-approved lenders might approve higher DTIs, especially if the borrower has additional money leftover after-tax deductions, or has residual income, and there’s a subtraction of monthly maintenance costs. Generally, the amount required varies depending on your family size and location.
  • Occupancy. Primary residences are fundamental to VA loans.

USDA Loan Requirements

Typically, the U.S. Department of Agriculture (USDA) provides a mortgage program made to allow low- to moderate-income families to purchase homes in rural areas. Apart from restrictions on the home location, USDA mortgage loan requirements include income limits.

A USDA Loan’s Current Minimum Requirements

  • Down payment. For eligible USDA buyers and properties, no down payment is needed.
  • Home location. The location of the home should be within one of the USDA’s assigned rural areas if you want to be eligible for a USDA loan.
  • Mortgage insurance. Mortgage insurance isn’t a requirement with USDA loans.
  • Guarantee fee. A 1% upfront fee is often charged, as well as an annual fee of approximately 0.35% of the loan amount. Like the mortgage insurance fee charged on an FHA loan, the annual fee is rolled into the monthly mortgage payment, and the upfront fee financed.
  • Income. For USDA loans, it’s usual to have proof of income history and two years of job. Considering all household member’s income is required, irrespective if or not they apply for the loan. Income limits are also a thing with USDA loans, which vary by family size, county, and city. Using USDA’s map tool, find out your area’s income limit.
  • Credit score. A minimum credit score of 640 is needed with USDA mortgage loans for automatic approval, as long as income and employment requirements are met. Homebuyers with lower credit, however, might still be approved in case a temporary hardship impacted their scores, or if the new housing payment is less compared to the amount the borrower is paying.
  • DTI ratio. For USDA loans, 29% is the maximum front-end ratio, and the maximum back-end ratio is 41%. With higher DTI ratios, borrowers might still qualify with a stable income history, large cash reserves, and a credit score ranging around 680 or higher.
  • Occupancy. Only primary residences matter with USDA loans.

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

Knowing How To Get Your Texas Mortgage Approved

6 Tips To Get Your Mortgage Approved In Texas

When it comes to getting a mortgage, there are many people who do not know where to start. They will decide to jump into homeownership when they hear about lower prices and dropping interest rates. However, the process of getting a mortgage is different from a car loan or renting an apartment. Any applicants who do not recognize the differences will be disappointed when their applications are declined.

It is important that you learn about mortgages first and see the ways that you can avoid this rejection. Buying a house is very stressful and your anxiety will only increase when you are not prepared. There are some tips that you can use to help get your mortgage approved without any issues.

Know Your Credit Score

Pulling your credit report will take a few minutes and you can easily order your credit score. This is something that a surprising number of potential home buyers never review before they submit their mortgage application. They assume their score is high enough to qualify for the mortgage they want. Many people also never consider the possibility of identity theft. The problem is that credit fraud and a low score can stop your mortgage application very quickly.

Your credit score and credit activity is one of the major factors that lenders look at. A lot of mortgage lenders require a credit score of 680 as the minimum. If your score is below this, lenders will deny your application for a conventional mortgage.

While a high credit score is important, you also need to look out for missed payments and frequent lateness which will stop applications. This is why you need to pay your bills on time, lower any debts you have and stay on top of your credit report. Taking the time to clean up your credit history and fixing any errors is key to a good credit score and successful mortgage application.

Save Your Money

The requirements for getting a mortgage often change and if you think you might want to apply for one in the near future, you need to have cash on hand. When you apply for a mortgage without any cash, you are going to be rejected. Mortgage lenders have become cautious over the years and will no longer approve any zero deposit mortgages. You need to have a down payment.

The minimum down payment will vary depending on the mortgage and other factors. Each lender has its own requirements, but the average is to have a 3.5% down payment. It is better to have more than this if you can. A 20% down payment will reduce the loan amount and will reduce the chances of rejection as well as mortgage insurance. Lenders will generally require this insurance if you do not have 20% equity. Having a higher deposit will reduce the monthly costs of a mortgage.

It is important to note that the down payment is not the only cash expense you have to think about. When you get a mortgage, there are other fees you need to consider such as home inspections, closing costs, title searches, application fees, and credit report fees. Closing costs will generally be 3% to 5% of the mortgage balance and needs to be paid before the deal is sealed.

Stay At Your Job

When you stick with your employer throughout the home buying process, everything will be better. If there is a chance your income or employment status will change, it can delay or stop the mortgage application.

Lenders will approve your loan based on the information that you provide. If you take a low-paying job or quit to become self-employed, you will be throwing a spanner into the works. Lenders will generally re-evaluate your finances to determine if you still qualify.

Pay Down Existing Debt

While you do not have to have a zero balance on your credit cards, the less you own the better. Your existing debts will determine whether you can get a mortgage as well as the amount the lender is happy to provide. All mortgage lenders will look at your debt to income ratio before they approve your application.

If you have a high debt ratio because of credit card debt, the mortgage lender is likely to reject your application or offer a lower loan. This is due to the fact that your monthly debt payments should not be more than 36% of your gross income. However, if you pay down your other debt before you apply, your ratio will be better and you could get a better mortgage rate.

While it is possible to get a mortgage with consumer debt, you should avoid new debt while you are going through the mortgage process. Lenders are going to recheck your credit before closing. Any new debts could stop the mortgage or delay the closing.

Get Pre-Approved

Before you start looking at houses, you should get pre-approved for a mortgage. This is a financially and emotionally responsible move. When you do this, you know what you can spend before you start looking and you can avoid falling in love with a house that you cannot afford.

The process for pre-approval is fairly simple as you have to contact the mortgage lender and submit your personal and financial information. Pre-approvals will generally tell you how much you can afford and the interest rate of the loan. A pre-approval letter will be provided for your records and the funds will be available when the seller accepts your offer. Of course, it might not always be this simple.

Know What You Can Afford

You should never let the mortgage lender dictate the amount you should spend on the loan. Lenders generally determine the pre-approval amount using your credit report and income. However, they will not factor in other costs such as insurance, groceries, and fuel. Instead of buying a property for the full mortgage value, you should be smarter and keep your expense within your means.

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

The Qualities Of A Qualified Mortgage Broker In Texas

6 Characteristics Of A Capable Texas Mortgage Broker

Mortgage brokers are the middleman between the borrower and the lender. They have to be knowledgeable about the terms and conditions of mortgage financing to provide the best service to their customers. In certain areas, mortgage brokers will have to be licensed before they can legally work. When looking for a mortgage broker, there are other characteristics that you need to look for in a good mortgage broker.

Having Your Best Interests At Heart

If you have found the house you want and it has passed the home inspections, you need to look for a new mortgage. A broker will be able to help you with this and help you secure the loan for your new home. Their knowledge and expertise will help them simplify the mortgage process and make it less confusing for you. However, you will need to be careful of any brokers who are desperate to close the loan. These brokers do not have your best interests in mind and only want to close as quickly as possible for their own needs.

Attention To Detail

The mortgage process can be very complex as you deal with various programs and financial transactions. The problem is that important details can get lost even when you work with a broker who is not on top of everything. When you meet with the different brokers, you need to check for an eye for detail and the ability to close the loan quickly.

The broker should also be friendly and easy to contact via emails and calls. You should get a list of references from past clients and vendors to see what they have to say. They will be able to tell you more about the service you are going to get.

Market & Industry Savvy

The mortgage market is always changing and a good broker will stay on top of this. They will know what the latest trends in the local area and industry in general are. It is important that you have a broker that is market savvy as this reduces the chances of deals falling through or the loan is canceled.

Honest & Straightforward

Desperate brokers will under-deliver and over-promise. The good news is that you do not have to work with a broker that pull a bait and switch. The only way this broker is able to secure the loan is through hiding fees and changing the rate at the end before you close. To avoid this, you have to look for a broker that is honest and straightforward. A good mortgage broker will be upfront about what you qualify for, particularly if you have bad credit or high debt.

Competitive Rates

Interest rates are still at all-time lows. If you are getting a mortgage through a broker, you should not be afraid to ask them to compete with other brokers who offer low rates. The worst that could happen is that your request is declined. The best result is that your broker will be competitive and you get the rates that you want.

Upfront About Fees

There are a lot of brokers who work hard for every cent they get. If your broker is honest and trustworthy, they will be upfront about all the fees they will get from your mortgage. Any brokers who are unwilling to provide this information should be avoided. It is best to ask about this when you first meet with the broker.

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

A Guide For Looking A Motivated Mortgage Lender In Texas

Top 5 Things To Consider When Looking For A Texas Mortgage Lender

Are you searching for a reputable mortgage lender to help you secure the money you need to purchase your new home? Below are the top five factors worth keeping in mind that signify the best mortgage professionals and lenders in your area to approach for a home loan:

1. Work With A Mortgage Lender Who Is A Home Loans Specialist

Starting off the list is the need to work this a professional that has in-depth knowledge and understanding of mortgage finance. You can get the money you need from your bank as well as a mortgage company. What you should keep in mind is that the distinctions between the two grow ever so apart. Banking institutions have, since the last economic turmoil, face significant regulatory hurdles from the government. As a result of this, specialized niche and opportunity cropped up for mortgage lenders.

The borrowing scene regarding people and businesses needing mortgage finance, the regulatory hurdles have seen many mortgage lenders restructure their services to ensure they continue to bridge the gap for those looking for home loans. They specialize in this while working closely with appraisers and underwriters to help borrowers ensure they close deals.

2. Knowledgeable Of All Available Loans & Finance Programs For The Desired Property

Work with lenders that are informed of ongoing and new releases of loan programs as well as qualification requirements for borrowers. The lender will help you get the best finance program that will see you buy your dream property while also taking into account the interest, down payment, and the monthly payments. The mortgage lender and assist with the negotiations for purchase.

3. A Lender That Provides You With A Pre-Qualification Letter

A pre-qualified loan request means that the application has gone through most of the necessary processes. Furthermore, the loan officer has reviewed the requirements, such as verified income, debt-to-income ratio, and tax returns.

It, thus, is a better option than getting a pre-approved letter in which case the borrower most likely only had a discussion with the lender and passed some general information needed for the loan request. Nonetheless, both documents are subject to final approval. In the pre-qualification letter, an offer is stated that signifies to the seller that the buyer is interested and ready to buy.

4. A Seasoned Loans Officer Can Better The Odds Of A Successful Deal

Lending is, in most cases, a process with ten steps and should take roughly under thirty days to complete. During that period, the loan officer will be collecting and reviewing all the borrower’s information given in the loan request. Conversely, the officer will also assess the collateral (property of interest).

Communication will be integral in the process, in which the officer will be in touch with the underwriters, real estate agents, inspectors, and appraisers. The value of the targeted property, as well as the financial records and credit score, will be taken into account when qualifying the borrower for the mortgage loan. However, the success of the request and even the purchase or sale going through significantly depends on how experienced the loan officer is with dealing with all related parties. That is why communication is an invaluable element in many tough real estate transactions.

5. The Mortgage Lender Connect With You At A Personal Level

When borrowing money, the loan officer will require you to give details of your income, credit score, work history, and spending habits. However, the law expects the mortgage professional to observe client confidentiality and protect such personal information. Moreover, an experienced lender will try and handle such data with respect, and try to make the borrower feel comfortable and be confident when sharing such private information, hence the need to connect with you at a personal level. In so doing, the loan officer will be able to understand your needs right from the beginning of the loan application process.

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