Category: House Buying

Is It The Perfect Time For You To Purchase A Texas House? Pt 2

Ideas To Know If You’re Now Able To Buy A Home In Texas

Part 2

4. Your Credit Score Is More Than 500

If you have a credit score that’s not lower than 500, it’s another indication telling you that you’re financially ready to get your own home.

Aside from having enough money in your bank account and a good DTI, lenders largely take into consideration one’s credit score in terms of deciding whether a person is approved for a mortgage loan or not. The exact score needed to get approved greatly depends on the type of house and loan that you’re applying for. Generally speaking, having a credit score of 620 will get your conventional pre-approved immediately. However, there are exceptions for first-time buyers that they may get an FHA loan and get approved even with a credit score of 500.

5. The Market Is Leaning Towards Your Favor

How will you know? If the mortgage rates are showing a decline, then it’s a great indication that it’s the right time to make a home purchase.

After taking into consideration your financial capacity and stability, another important factor to look into is the market condition. Don’t forget to check the market’s interest rates. If you’ve noticed that there’s a decline in the trend, then it’s a good sign for you because it simply means that you’ll have to pay less when you apply for a house mortgage.

Another factor to look into is the home’s area – does it fall under the seller’s, or the buyer’s market? Remember, you want to purchase a house that’s within the buyer’s market.

6. You’re Ready To Set Some Roots

According to some studies, it’s worth buying a home if you intend to stay in that house for at least five years. Recent research has found out that it takes at least 4 years for homeowners to breakeven on the cost of the house – and an additional year to consider the home as a smart investment.

Buying a home is for those people who are decided that they wanted to live in that city and state for a minimum of five years. If you have a soaring career and if you’re still thinking of moving to another area, then it might not be the right time to make a house purchase.

7. You’re Not Taking Care Of Other Larger Expenses

If you’re paying for big expenses or planning on getting one – then don’t get a house just yet

At this point, it should be clear to you that it requires a lot of thinking, financial stability, and settling down before one can buy a house. It isn’t a simple decision that can be made on a whim. It’s a financial decision that needs to be thought of carefully. If you have other big expenses lined up such as education, wedding, or even having a new baby, now might not be the right time to consider buying a home.

Instead of rushing things, wait for the right time to buy your home. Wait for you to become financially stable, and wait until you’re comfortable on taking larger monthly expenses. Once you’re comfortable taking that additional expense, then you’re ready.

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. Click here to go to the first article in this series.

Is It The Perfect Time For You To Purchase A Texas House? Pt 1

Ideas To Know If You’re Now Able To Buy A Home In Texas

Part 1

The “perfect” timing in buying a home varies depending on one person to another. Is the time right for you?

In general, there’s no specific answer to questions on when the perfect time is in buying home. It simply means that it all depends on one’s personal decisions, along with several factors to be taken into consideration.

Consider these five indications below in helping you decide whether you should pursue buying a home:

1. You Have A Stable Source Of Income

If you’ve been working for a company for at least two years, it might be a good indication that you’re ready to make a house purchase.

The majority of lenders will want to make sure that you can pay your mortgage and that you can do so, not just within the year, but in the near future as well. One proof for these lenders is that you have a stable source of income, coming from the same employer.

Typically, lenders will ask you to submit your W-2s for the past two years. For those who are self-employed, make sure that you are prepared with your records of tax returns over the past two years. Additionally, lenders may also require you to present any 1099s that you acquired over the course of 2 years.

2. You Have Little To No Debt

Another factor to take into consideration is if have a DTI that is not more than 45%. Another factor that lenders check before they approve your mortgage loan is your DTI, also known as your debt-to-income ratio. Your DTI simply shows your capacity of being able to handle an additional loan, considering all your current debt payments. This is compared alongside the additional income and money you have left after settling the monthly debt payments.

If you have a current DTI that’s more than 45%, you have to work on improving on that ratio before you even consider making a house purchase.

3. You’ve Saved For The Rainy Days

How much is the total cost of the house you’re planning to get? If you have more than 5% of that amount in your savings, it’s a good indication that you’re ready to purchase a home.

Aside from making sure that you have enough money to pay for your mortgage every month, the majority of lenders will also take into consideration how much you currently have in your savings. This amount will go towards the upfront costs such as:

  • Down payment: Most houses require a 20% down payment – although you may find some realtors that may require a little bit less than 20%.
  • Closing costs: These are miscellaneous fees that the home purchaser will need to settle to close the home. There’s no specific amount, and the overall cost will be shouldered both by the seller and buyer. Typically, closing costs range from 2-5% of the overall house price.
  • Reserves: This refers to the total amount of money that will be left to your bank account after the down payment and closing cost deductions. Lenders are most likely to approve your mortgage if you have enough money in your bank, at least 2 months’ worth of your mortgage. There’s no harm in having a larger amount for a buffer, as it increases your chances of getting that mortgage approval.

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. Click here to go to the next article in this series.

A Perfect Guide To Choose An Adept Mortgage Broker In Texas

Does A Texas Mortgage Broker Really Matter?

Purchase a house in Texas is more straightforward if it is all cash, but having money in cash is easier said than done. Therefore, a mortgage is the next best thing to consider.

As you consider the mortgage, you also must contend with finding a reputable broker. Some are more skilled at facilitating a purchase, and some inadvertently hinder the process. But all the same, a broker is an inevitable element when seeking a mortgage. You want to work with one that can facilitate a smooth transaction as you would want the same thing when it comes to a realtor.

Finding and working with the right mortgage lender or broker is imperative when you want to get value for your money. Pick a professional with considerable experience with the kind of property you want to better the chances of making the process move smoother. With the right broker or lender on your side, you will have access to the information needed and the necessary help for finding the best loan with favorable terms through a process devoid of unnecessary delays.

Getting The Job Done Vs. Doing It Well

Remember that blunders result in wasted time, and time will be money lost. Therefore, as you search for a licensed mortgage broker, keep in mind that having the license does not imply dealing with an experienced broker. Some brokers are armed with the knowledge of navigating the co-operate questionnaires, some have mastered customize solutions that suit each borrower, and others are aptly armed to transact.

We have an experienced team that can, in seconds, discern if a mortgage broker will be a screw-up or push for the best deal. Therefore, we can help you know if you are working with a professional that will cover you with grace and efficiency as you seek financial help in purchasing your dream home.

Different Clients, Diverse Needs

Some mortgage brokers do not rely on an income verification program to provide financing. Conversely, others offer quick turnarounds, in roughly 2-3 days. If a client needs money ASAP or is going to auction, we can recommend mortgage lenders that can help. We know that some people prefer transacting in cash, and we can help them get the financing they need.

Work The Network

The most prudent thing you can do is head your agent’s advice regarding the broker to use. Most agents have worked with different mortgage lenders and brokers; thus are well vast with their performance, professional reputation, and how they relate with clients. Those who are closest to underwriters can move things along faster, and most of them have been in the business for a considerable time, moving up their profession. Therefore, that is the kind of pull you need backing you.

Strive for such connections and build on those relationships that continue long after signing the contract. They are agents with an impeccable professional standing, which can give some leverage as you approach a broker for financial assistance.

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 or call us today!

 

You’re A Seasonally Employed? Here’s A Guide To Get A Texas Mortgage

Getting A Texas Mortgage When You Have A Seasonal Income

If you are a professional who works part of the year or is seasonally employed, you might have a tough time qualifying for a mortgage. The job can be available depending on the season, such as snow removal, landscaping, or a side hassle. It is a type of employment known as sporadic.

While the nature of your profession might not disqualify you from getting a mortgage, it could make the process somewhat tricky.

The Required Documentation

You must prove to the mortgage lender you have a reliable income even though you have seasonal employment. For VA and FHA loans, you should provide the necessary paperwork that shows you worked for the same employer for at least two years or have been in the same profession for the same period. Moreover, your employer will provide the documents that prove you still be hired in the upcoming season.

However, if you have worked for less than two years, your incomes might not qualify you for the mortgage. Similarly, you might not be eligible even if you have been working for two years, and your employer cannot prove that you will be hired in the season that follows.

What Next If You Cannot Prove This?

If you cannot give evidence that shows you have a reliable income for a period not less than two years, you will not qualify for the mortgage. However, you can re-apply once these changes, and you have the necessary documentation to back it. But if your situation is wanting, you can consider other options even when you opt to wait and reapply.

Provide all your income sources. If you receive Social Security Benefits, have a second or third job, receive unemployment benefits, or some interest income, consider using them to bolster your chances of qualifying for the mortgage.

For instance, you can apply for the mortgage with a close friend, spouse, or family member. You may increase the chances of being eligible for the loan if you add another person, especially one with a good credit score. Keep in mind that lenders will consider both parties’ incomes and credit scores when qualifying the borrower. For better chances of qualifying, consider splitting the homeownership costs and seeking another person’s assistance through the process, which is some of the top benefits of co-owning a home with someone.

Proper documentation can make the difference between being eligible for a mortgage and buying that dream home. But before starting the application process, you should ensure that you sort the W2 forms and have proof of compensation, both covering the last two years. Furthermore, you need your employer to verify you will be hired the next season.

Choose The Texas Mortgage Pros

If you are confident you qualify, begin the process as soon as possible. Texas Mortgage Pros are here to help make things simple for you to have a fast approval. If you are uncertain of your eligibility, get in touch with us today to discover other viable options that you can consider.

Knowing The Right Time For Home Purchase In Texas Pt 2

Important Things To Consider When Buying A Texas House

Part 2

What’s the most important thing that you should be remembering? You want to be certain you are in the right financial position in order to purchase a home irrespective of what is going on in the world. Consider these 3 things.

1. The Stability Of Your Income

First and foremost, you should be looking at this. Consider how likely it is that you are going to continue to have a stable income for the entire duration of the global pandemic. You want to consider whether or not your position is going to be safe in the current climate. Consider whether or not you have enough funds set aside in order to make the much-needed payments if you were to lose your income. If you are currently in a career that has a lot of uncertainty and that is prone to a lot of changes, you will want to hold off on purchasing a home until that changes.

2. Your Budget

You will need to pay a lot more than the down payment in order to purchase a home. You will need to pay for everything from the inspections to the appraisals to the loan origination costs, and more. Therefore, if you find yourself in a position where you are feeling unable to pay for everything, you will want to avoid purchasing a home.

Another big-budget consideration: Don’t necessarily allow your pre-approval status and amount to determine the total cost of a home you are wanting. A lot of prospective homeowners get pre-approved for a much higher mortgage than you can actually afford. Because of this, you should look at several things including your spending to ensure that you are figuring out the right budget. From there, you will be able to speak with your lender in order to translate that to a mortgage payment. You want to be able to afford the home you purchase.

3. The Reason For Buying A Home

You want to consider why you are looking to purchase a home. Maybe it’s because you just got married. Perhaps you are adding to your family. Or you might be looking to downsize prior to retirement. There are plenty of reasons you might be interested in purchasing a home. If your why isn’t necessarily good enough, perhaps you should hold off.

It’s important to understand that purchasing a home will effectively allow you to experience many of the highs and lows that come with it. If that doesn’t sound like something you want to deal with, it might be best to hold off.

While there is certainly no harm that can come from browsing the market, there is a big difference between looking to see what’s out there and buying. If you are looking to eventually buy a home, now is a fantastic time to begin looking for your next dream home.

The Texas Mortgage Pros

The Texas Mortgage Pros consists of some of the best professionals in the state of Texas. We are fully committed to providing the highest level of service to all of our clients. You will be able to take advantage of the best rates and multiple loan programs that are available in your area. We have mortgage professionals with years and years of experience who will be willing and able to work directly with you in order to guarantee that you are able to get a home loan that is curated to meet your needs and expectations. No matter if you are purchasing your dream home or your first home, we have the professionals on staff in order to ensure you get the best rates and the right program.

In order to speak with one of our friendly and experienced professionals, give us a call right now. We look forward to assisting you to find the home of your dreams. Click here to go to the first article in this series.

Knowing The Right Time For Home Purchase In Texas Pt 1

Important Things To Consider When Buying A Texas House

Part 1

Because of mortgage rates being so low because of the uncertainty caused by the pandemic, you may be thinking it might be the right time to consider buying a home. However, experts say you might not want to rush into such a decision. Below, we will be going over why according to real estate experts.

The Housing Market State

While the current market does offer inherent benefits for anyone looking to purchase a home. After all, in March the median list prices were up at around 2.2 percent annually. However, a month later, that number went down to less than 1 percent. This ultimately represented the least amount of growth in the last 7 years. As such, mortgage rates have been at a record low with the average 30-year fixed rates sitting at 3.4 percent for the week leading up to May 1.

Buyers are currently looking for 30-year mortgages and rates are very low. Because of this, it has become an opportune time to effectively purchase a home and take out a mortgage due to the historically low rates effectively outweighing the potential uncertainty that the pandemic has led to.

However, you shouldn’t simply be basing your real estate purchasing decision off this respective price drop. While the home prices in the market are expected to continue to fall around 2 to 3 percent just this year, you will find these prices fluctuating all of the time. You will pretty much always see properties that are priced outside of the market falling. Whereas, you will find properties that are competitively priced in the current market changing in prices very little.

What you really need to look at isn’t necessarily the decrease in home prices, but the increased demand for viable buyers. After all, your home could be competitively priced but you wouldn’t have any demand if there is no one that is capable of affording the home in the current conditions.

What If You Are Able To Find A “GOOD DEAL?”

While you may be tempted to simply jump on the first good deal you are able to find, you don’t want to get fixated on it. For one, you won’t necessarily be limited to finding ‘good deals’ in the midst of a crisis. Ideally, you want to try to identify a home that sits in the spot of being currently undervalued in the market and one that sits in a good neighborhood that has a lot of higher valued properties. This is what we refer to as a ‘diamond in the rough.’ You will certainly be able to find some good deals in the marketplace. However, all of the great deals are usually purchased before they even hit the open market.

Your timing is more important than anything. Even more so than being able to find a good deal. This will usually indicate how well you are able to do on the market. Generally, you will find buyers paying around market value for the homes they purchase, no matter what the circumstances lead to. While it’s certainly true that markets have both peaks and valleys, the real estate market is usually one of the more predictable markets and investments that usually have a steady upward trend. The timing will usually dictate how well you fare in any 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 second article in this series.

A Helpful Guide For A Texas FHA Loan Qualifications

8 Things You Need To Know To Qualify For A FHA Loan In Texas

Part 2

6. Choosing The Right Type Of FHA Loan

Different types of FHA loans are offered by lenders and the most common type remains 30 years fixed interest loan. There is also the option of an FHA loan with a fixed interest rate for a period of 10 to 25 years and you also have the option of an adjustable-rate FHA loan. With an adjustable-rate FHA loan, you will benefit from fluctuating interest rates at particular time periods.

For instance, a 3/1 adjustable rate FHA loan allows a fixed interest rate for the first 3 years but the interest rate is reset every year after that. You can get an adjustable loan with different periods of a fixed-rate term such as 3/1, 5/1, 7/1, or 10/1 with the 30-year loan. However, the FHA loans with fixed interest rates are more popular as adjustable-rate loans are deemed riskier by buyers.

7. Understanding FHA Loan Costs

An FHA loan also comes with the mandatory cost of private mortgage insurance. It is the insurance that protects the lender in case the borrower defaults and as a borrower, you need to pay an upfront fee as well as a monthly fee. It is essential for everyone who opts for less than 20% down payment.

8. Starting The Application Process

If you have checked everything and you think you will qualify for an FHA loan, and it is now time for you to apply, you should first try to get pre-approved with your chosen lender. It could be a credit union or local bank or an online mortgage lender or an independent mortgage broker.

Start the process with multiple lenders and ask for quotes for payments, fees as well as rates. Keep in mind that there is huge competition in the mortgage lending business even with an FHA loan, and even a slight difference in the closing costs or interest rates can help you save thousands of dollars.

The Texas Mortgage Pros

Here at The Texas Mortgage Pros, our team has mortgage professionals all over Texas. We are dedicated to helping our clients get the highest quality service for all their mortgage needs. We are committed to get our clients the lowest rates and to help them choose the best from multiple loan programs in The Woodlands, Tomball, San Antonio, Spring, Houston, Austin, and Dallas, Texas.

Our team of mortgage professionals has multiple years of experience and we will work with you to make sure that you get a customized home loan that is exactly right as for your situation and meets your expectations. Whether you are buying your first home or buying your dream home or refinancing a loan or consolidating debt, our team of highly experienced loan officers will make sure you are able to find the right loan at the lowest possible rate.

We strive to create a lasting relationship with our clients to allow us to serve our clients for many years in the future. We are different from other mortgage companies that operate nationwide. We promise that all your information will always be safe and private. We have a well-earned reputation in the lending community for trustworthiness and reliability.

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. Click here to go to the first article in this series.

A Helpful Guide For A Texas FHA Loan Qualifications

8 Things You Need To Know To Qualify For A FHA Loan In Texas

Part 1

With the help of FHA loans, you can now fulfill your dream of owning a house with a low payment or limited credit. Here is what you need to know about qualifying for an FHA loan and things you can expect.

The FHA loan program allows you to buy a home with just 3.5% of the property value as a down payment even when you have a credit score that is lower than as required by traditional mortgage providers.

It is also important to understand that the FHA loan program is not limited to low-income applicants or first-time homebuyers. Here is what you need to know about FHA loan qualifications.

1. Verifiable Income

One of the biggest factors that affect your qualification for an FHA loan is your ability to repay the loan. Here is a rough criterion you need to meet in terms of income:

The mortgage payment should be below 35% of your income before taxes and all your monthly debt payments including your mortgage, credit cards, car loan, or any other loan should be within 48% of your income.

If all these things sound confusing, feel free to use our home affordability calculator to figure out the maximum amount you can afford to spend on a home. If your dream property costs more than what you can afford now, you should try to pay off as much debt as possible before applying for an FHA loan.

2. Down Payment – 3.5%

The minimum down payment you need to make for an FHA loan stands at 3.5%. However, it is close to 6% of the purchase price of the home in reality as you also need to pay the closing costs. This closing cost also includes the upfront mortgage insurance premium which is equivalent to 1.75% of your home’s value. You can bring this insurance premium down to 1.25% when you undergo an FHA approved credit counseling program before you close the deal.

3. Credit History

Established credit history is a must and you need to have at least 2 lines of credit such as a credit card and a student loan in order to qualify for an FHA loan.

4. FICO Score Range 580 to 640

The minimum FICO score you need for qualifying for an FHA loan program is 580. However, you should know that FHA is not the lender but it acts as an insurer and the minimum credit score requirements are set by the lender. This minimum score is often around 640 when it comes to FHA loans. Keep in mind that conventional mortgages usually require a FICO score of around 700.

You can check your credit score for free if you don’t already know it. If your score is above 640, is completely safe to apply for an FHA loan. If your credit score is below this limit, get in touch with the chosen mortgage lender and inquire about their minimum scores to process FHA loan applications. Keep in mind that you should do all this before making an official application.

5. Remain Within FHA Loan Limits

You cannot borrow as much as you want with an FHA loan as there are federally set limits that depend on your state and county. However, in most cases, the limits aren’t low enough to prevent you from buying a home that is expensive.

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. Click here to go to the next article in this series.

Applying For Mortgage In Texas? Here Are The Pre-approval Requirements

5 Necessities For Texas Mortgage Pre-Approval

Part 2

3. Good Credit

For Conventional Loans and some Federal Housing Administration loans, a 620 or more FICO score is needed by most lenders before approval can begin. 760 or higher credit scores will usually result in customers getting lower interest rates from lenders. According to FHA guidelines, a borrower can pay as low as 3.5% down if their score is 580 or more.

new San Antonio home bought with an FHA mortgage loan moderate incomeA larger down payment is required of borrowers with lower scores. Borrowers with low scores can often get assistance from lenders and can get score improvement suggestions.

A payment of $1,288 each month would be required for a $250,000 loan and a FICO score in the range of 620-639. $1,062 would be paid by a homeowner who has a score in the range of 760–850. The difference between these two each year is $2,712. The rates that are offered today would give a buyer a score in the range of 620-639 an interest payment of $213,857 and $132,216 for the 760-860 range buyer. This presents an $81,000 difference.

4. Verification of Employment

Borrowers will need to be able to show lenders that they have a stable job before they can be approved. The buyer’s employer will likely be called to verify that they actually work for them and provide them with a salary. Previous employers may be contacted if any job changes were done recently.

When a buyer is self-employed, there is a lot more paperwork needed to verify the income and business of the buyer. Stability of the income of the borrower, the nature and location of the business the borrower has, any demand for the business’ services or products, the business’ financial strength, and the business’ ability to generate income are all factors that will be considered when self-employed borrowers try to get approval for a loan.

Recent tax returns from the past two years and the right schedules will need to be provided by self-employed borrowers.

5. Other Documentation

A credit report must be allowed by the lender for mortgages, along with the signature and Social Security number of the borrower and a copy of the driver’s license of the borrower. Additional paperwork may be needed by the lender, and you will need to have these documents ready to provide them to the lender.

The mortgage process will be easier if you can cooperate.

You will have an easier time buying a home if you talk to a lender before making any decisions. Before you head for a pre-approval appointment, get your paperwork ready and don’t hunt for houses until you get pre-approved.

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.

Applying For Mortgage In Texas? Here Are The Pre-approval Requirements

5 Necessities For Texas Mortgage Pre-Approval

Part 1

While there may be some excitement in looking for a home to buy, anyone who really wants to buy will delay the open house visit and start at the lender’s office. Pre-approval letters are expected by most sellers, and a buyer having one will show an ability to get financing, giving them a better chance of negotiation.

There are five things that buyers need – employment verification, good credit, proof of income and assets, and some important documents for a mortgage pre-approval.

Pre-approval vs. Pre-qualification

A pre-approval has more value than a mortgage pre-qualification, but pre-qualifications have their use in showing the amount a buyer can afford to spend. Under the pre-approval, both documentation has been verified and the buyer’s credit has been check by the lender. Positive checks will result in a loan amount being approved for 60 to 90 days.

Talking with a lender and getting a letter of pre-approval gives many benefits to potential buyers. Budgeting and loan options can be discussed with the lender after pre-approval. Any problems with the buyer’s credit will be found when the lender checks for them. The price range will also be set and the home buyer will figure out their maximum borrow amount.

After an appraisal is done for the buyer and property has a loan applied to it, the final loan approval will be done.

Pre-approval Requirements

Good credit, employment verification, proof of income and assets, and more documents are needed by a lender in order to get mortgage pre-approval. Here you’ll find more information about how to obtain the necessary things to be pre-approved for mortgages:

1. Proof of Income

Year to date income and recent pay stubs indicating income, W-2 wage statements given through the most recent two years, bonuses or alimony, and tax returns from the most recent two years are needed by buyers to prove their income.

2. Proof of Assets

In order to show that they have down payment money, cash reserves, and money for closing costs, the borrower will have to provide investment account statements and bank statements.

Depending on the loan, the down payment, which is a percentage determined by the selling price, can be different. Unless 20% of the home’s purchase price is being put down, the buyer will have to either pay a funding fee or mortgage insurance premium or pay for PMI or private mortgage insurance, as required by the loan. Depending on the loan that is being pursued, other factors, such as the FICO credit score of the buyer and DTI or debt-to-income ratio, will be needed along with the down payment for pre-approval.

Loans conform to enterprise guidelines that are government-sponsored, with one exception in the form of jumbo loans. First-time buyers and buyers with low or moderate-income are perfect for Home Possible and HomeReady loans, which are provided by Freddie Mac and Fannie Mae respectively.

U.S. veterans, spouses that aren’t remarried, and service members can get VA or Veterans Affairs loans. No money down is required with these loans. In order to prove that certain funds aren’t loans, a gift letter may be needed if a buyer obtains assistance money for the down payment from a relative or friend.

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.