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!

FHA Loan In Texas: How Much Can You Qualify For & Afford?

Factors To Determine The Texas FHA Loan Amount You Qualify To Borrow Or Can Afford

Many of the questions that we get from your potential applicants of FHA (Federal Housing Administration) loans and readers tend to touch on issues related to ‘how much’. We get tons of frequently asked questions (FAQs), and some of the most common inquiries include:

• What minimum income level do I need to qualify for the FHA loan?

• What kind of house can I afford once my FHA loan is approved?

• What mortgage amount can I get with the FHA loan?

The goal of this post is to answer these frequently asked questions. We will start by going over the official application guidelines for an FHA loan as stipulated by the HUD (Department of Housing and Urban Development) of America. Next, we shall examine how financial institutions and mortgage lenders implement these guidelines when offering mortgage loans. We also will delve into other factors that these lenders consider to determine the FHA loan amount you qualify to receive based on your income.

FHA loans are offered at 43% debt to income ration. That means your combined debts after taking the loan should not exceed your gross monthly income by more than 43%. Fortunately, there are exceptions to this rule. For instance, you can get an FHA loan approved if you have a DTI (debt to income ratio) of up to 50% if you have a significant amount of savings in your bank account, or numerous sources of income.

What Mortgage Amount Can You Take With An FHA Loan?

In as much as there are directives regulating what amount you can get when applying for an FHA loan, the lender does have some substantial prerogative in decide the mortgage amount to offer. In short, the lender can determine how much of the FHA loan to give you based on your gross monthly income, the HUD withstanding.

The lender will first review the official HUD Handbook 4000.1 to examine the FHA loan guidelines when determining the much you qualify to get for the FHA loan. The HUD handbook is commonly referred to as the Single-Family Housing Policy Handbook.

Section II-A-5 of the handbook stipulates the “approvable ration requirements” in which the term “ratio” is used in reference to the DTI (debt to income ratio). The DTI is based on a comparison of the cash amount you can get from your income in relation to what you spend on servicing your recurring debts.

As such, the DTI is one of the most crucial factors that influence the mortgage amount you qualify to borrow or receive when applying for an FHA loan. It also determines the type of house you can afford to buy. The DTI might be one of the influential elements used to calculate the much you can borrow when purchasing a home or property, but it is not the only decisive factor that lenders consider.

You should be aware of two essential rations when acquiring an FHA loan; these are:

  • Total Mortgage Payment to Effective Income Ratio (PTI)

It indicates the much from your gross monthly income that can be used to service your housing costly – primarily meeting your mortgage loan obligations. The PTI ratio is also referred to as the ‘front-end debt’ ratio.

  • Total Fixed Payments to Net Income Ratio (DTI)

It indicates the much from your gross monthly income will go towards the servicing of your monthly debts, such as your credit card payments, mortgage payments, or car payments. The DTI is also known as the ‘back-end’ debt ratio.

To have your loan application approved, you must meet the 31% – 43% threshold. That means your mortgage payments will have to take up less than 31% of your gross monthly income while the total monthly debts should consume less than 43%. You should use this rule when trying to determine the FHA loan amount to borrow. It is one of the determinants mortgage lenders will use to calculate the FHA loan you qualify to receive.

For Example:

An individual applying for an FHA loan has a gross monthly income of $6,000. The applicant should have total debts (inclusive of credit card expenses, car payments, mortgage, and other recurring expenses) that are less than $2,580 each month. That figure is determined by the following calculation (gross monthly income X 0.43). And the total mortgage payments should be less than $1,860, which is a figure reached using the following calculation (gross monthly income X 0.31).

Keep in mind that the applicant can qualify to get the FHA loan if the lender determines that the borrower has a Total DTI of up to 50%.

Attaining a total DTI of up to 50% is something that is possible based on several exceptions applied to the 31% – 43% rule. A mortgage lender can do checks and find ‘compensating factors’ that indicate the applicant is an excellent candidate for the FHA loan. The then lender can give some leeway for a higher back-end ration that can be as much 50% in some situations. Some of the ‘compensating factors’ considered by mortgage lenders include:

• Residual income

• Significant additional income not reflected in gross monthly income

• Minimal increments in housing payments

• Documented and confirmed cash reserves

Keep in mind that the mortgage lender will also take into account many other factors before determining if you qualify for the FHA loan and the amount to offer. Therefore, if you are thinking of applying for an FHA loan, you should contact a lender that has the recognition and approval of the HUD (Department of Housing and Urban Development) of America. Ask them to be upfront about your prospects of qualifying for the loan. Answering this question will be a matter determined by doing background checks on your income level, debt situation, and credit history, among other things.

Which Kind Of House Can I Afford To Buy?

At this point, we hope that you have enough knowledge about the amount of mortgage you can get with an FHA loan. But it only is half the picture. You must know what type of house you will be in a financial position to afford when applying for an FHA backed mortgage. You do not need to rely on an expert to figure this out.

Always remember that it is possible for an FHA mortgage to be too huge for you to service or it can become affordable as time passes depending on how your financial situation fluctuates. In some cases, loans become a financial burden in the long that many people cannot afford and thus they face foreclosures.

That is why we highly recommend that you create a basic housing budget so that it helps you avoid getting yourself in a financial crisis. It will help you know the kind of house you can comfortably afford based on the much you qualify to get when you apply for the FHA loan.

The wisest investment decision you can make when purchasing a home is to ensure that you can comfortably finance the mortgage. That means you able to make the monthly mortgage payments and meet other recurring monthly expenses while also managing to save some money.

How Can You Determine The Type Of Home You Can Afford?

Below are a few expert tips on how you can determine the best kind of house to afford with the FHA loan comfortably

• Compare net monthly income and overall expenses

Your net monthly income is the total payments you receive at the end of the month. So, the goal is to figure out your total expenditure which means knowing the costs your accrue each month on your housing-related expenses including gas, food, electricity bill, car payments, credit card payments, entertainment, and your savings contributions.

• Subtracting monthly expenses from the net income

Once you have determined the much you spend on your monthly bills, you then need to deduct that amount from the net monthly income. What you are left with is what you go towards servicing the mortgage.

Keep in mind that you do not have to put all that money into that basket meant for repaying the FHA loan. You also need to set up an account for emergency funds. Overall, once you have deducted what you need to cater to your monthly expenses, you will then assess what is left to know what you can save for a rainy day and the much that will be for mortgage payments after you have purchased your new home.

You will be expected to honor your loan obligations. But that does not mean that serving the mortgage should strain your pockets. You also should ensure that you have some bit of money left at the of the month for a rainy day. You never know what tomorrow has in store for you; thus, you should have some cash lying around to cater for the unexpected expenses, such a car repairs and hospital visits. Exercising financial prudence dictates that you sort your income to ensure that it caters to your expenditures, debts, and you also manage to set something aside for emergencies.

When you implement the tips discussed above, you will be able to determine which is the ideal type of house you can afford using the FHA loan or any other kind of mortgage.

Which Other Things Do I Need To Get An FHA Loan Approved?

First and foremost, you should have enough monthly income. Mortgage lenders will examine your level of income and consider this when determining if you qualify for a loan and which type and amount to offer you.

Besides having a dependable monthly income, you also must take into account other factors that influence your chances of getting the loan request approved. Some of these things include:

• Down Payment

When you are looking to get an FHA loan, you will need to provide 3.5% of the price of the house you plan to buy, or its appraised value. That is why you must consider this when you are researching the kind of home you can comfortably afford if you will be relying on an FHA mortgage program to help finance the acquisition of the property.

• A Good Credit Score

According to the HUD guidelines for FHA loans, borrowers seeking the maximum amount on an FHA loan should have a credit score of 580 or more. They also should be able to make a 3.5% down payment for the loan. Note that some mortgage lenders will require loan applicants that want the maximum amount to have a higher credit score.

• Manageable Debt

Lastly, you should not overlook the DTI (debt to income ratio) for the FHA loan. It is one of the crucial determinants that lenders consider when approving a loan request.

And there you have it; we have sufficiently answered the two most essential questions, namely:

1: How much of an FHA loan can I get based on my monthly income?

2: What type of house can I afford to buy with the FHA loan?

The above are the pertinent questions you need to think about when applying for this loan. Most importantly, you should come up with a basic housing budget before you start the application process for the FHA mortgage.

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!

Understanding The Main Types Of Texas Mortgage Lender

Mortgage Lender Categories & Types In Texas

Finding the right lender isn’t always easy when searching for a home loan. There are a lot of different kinds of mortgage lenders out there, which can make it difficult to know which option is best. One way to simplify the decision-making process is by learning more about the various types of lenders that are available.

While it is important to search for the best loan terms, it is equally as important to choose the right lender. A good lender simplifies the borrowing process as much as possible, reducing your expenses and helping you get your money quickly. Comparing all of your options is essential. Some of the different types of lenders you may encounter include mortgage brokers, direct lenders, correspondent lenders, retail lenders, and wholesale lenders. Some types of lenders cross over between several of these categories.

The Difference Between Mortgage Brokers & Mortgage Lenders

When researching home loans, you probably have encountered both mortgage lenders and mortgage brokers. It is important to understand the difference between the two. A mortgage lender is a bank or organization that lends money. Before agreeing to give you a loan, lenders require you to meet certain predefined borrowing standards. This includes checking your credit and verifying that you have the financial capacity to pay the loan back. They determine the interest rate, the schedule for repaying the loan, and other terms or conditions of the loan.

A mortgage broker, on the other hand, acts as a go-between, working with both you and the mortgage lender. Brokers don’t have any control over the terms of the loan or the approval process. Their job is to help their clients apply for mortgages. Along with working with their clients to put together the necessary documentation, they also provide advice about credit problems or other financial issues that could negatively impact their chances of getting approved. Mortgage brokers frequently are employed by independent companies, which means that they can compare loans from more than one lender to ensure you are getting the best deal. In most cases, the lender pays the broker once the loan closes. Sometimes, however, the commission is paid by the borrower at closing.

Mortgage Brokers

Mortgage brokers have relationships with many types of lenders. As a borrower, you should have a thorough understanding of the various available products. Remember, brokers, don’t work with direct lenders. Consider contacting several direct lenders yourself in addition to working with a mortgage broker. That way, you can be sure you are getting the best possible deal.

How Mortgage Brokers Are Paid For Their Services

Mortgage brokers usually charge a fee for their services that fall somewhere in the range of 1% of the total amount of the loan. Lenders also sometimes charge a similar fee. Depending on the broker, the commission is either paid by the lender or the borrower. If you take out a loan at the par rate, you generally don’t have to pay an origination fee for the loan and the lender will handle paying the broker. Remember, however, that the interest rates charged by mortgage lenders are usually higher. With brokers, you may be able to agree on a flat fee ahead of time. Always find out more about how a particular broker handles their fee before agreeing to work with them.

The Benefits Of Using A Mortgage Broker

Mortgage brokers can compare loans from multiple lenders, making it faster and easier to find a loan that is a good fit. They also are an excellent choice if you have credit blemishes or if you don’t have a very large down payment. Brokers usually maintain relationships with many different lenders, often numbering in the hundreds. Usually, at least some of these lenders are willing to work with borrowers who have unique challenges. Brokers generally go above and beyond to help their clients find a loan since they only earn a commission if the loan actually closes.

The Downside To Using A Mortgage Broker

After the broker connects you with a lender, the rest of the process is out of their hands. The lender controls everything from processing the loan to determining whether or not you are approved. If the closing is delayed, this can be quite frustrating. If you opt for a loan at par pricing, you may also have to pay a higher interest rate to the lender to cover the cost of the broker’s commission. This could increase the amount of money that you have to spend.

Mortgage Bankers

This category includes the vast majority of mortgage lenders in the United States. Direct lenders and retail lenders both fall into this category. This includes credit unions, Internet-based lenders, and traditional banks.

Organizations like these obtain money for the mortgages that they provide by borrowing from warehouse lenders at short-term rates. Once the loan closes, the banker sells it to independent investors or to an agency that backs mortgages in the United States. They then use that money to repay the warehouse lender.

Retail Lenders

Lenders in this category work with borrowers directly rather than with organizations. Some common types of retail lenders include mortgage bankers, credit unions, and traditional banks. Lenders like these also provide other financial products along with mortgages including car loans, personal loans, and checking or savings accounts.

Direct Lenders

Lenders in this category either use the money of their own or money that they borrow from someone else to originate loans themselves. Portfolio lenders and mortgage bankers both are sometimes direct lenders. The difference between a retail lender and a direct lender is the fact that they specialize only in home loans.

Retail lenders have a variety of financial products available for their customers. They also have strictly defined rules regarding underwriting. Direct lenders, on the other hand, have a little bit more flexibility when it comes to helping borrowers qualify for mortgages since they work exclusively with home loans. Similar to retail lenders, direct lenders don’t work with mortgage brokers. That means that you need to apply directly with them if you want to compare rates. Direct lenders are usually based primarily online. If you like the idea of being able to meet in person with your lender, this may not be the best option for you.

Portfolio Lenders

Lenders in this category use their own funds to provide loans to borrowers. Since lenders like these don’t work with other investors, they are free to set their own terms or standards regarding borrowing. This may make them more attractive to some types of borrowers. For instance, people who are purchasing investment properties or who require jumbo loans often find that portfolio lenders are a lot more flexible to work with than other types of lenders.

Wholesale Lenders

Wholesale lenders don’t work with borrowers directly. Instead, they provide loans through credit unions, traditional banks, or mortgage brokers. These lenders fund, originate, and occasionally service the loans. Since the wholesale lender is responsible for establishing the terms of the loan, their name is the one printed on the loan documents – not the name of your mortgage broker. Mortgage banks frequently have two different divisions – one in charge of retail lending and one in charge of wholesale lending. Loans like these are typically sold after they close on the secondary loan market.

Correspondent Lenders

Correspondent lenders usually fund and originate their own loans. In some cases, they also service them. Usually, however, they turn around and sell the loans to sponsors or investors. These investors then sell them to other investors through the secondary mortgage market. When a loan closes, correspondent lenders take a fee for themselves. They then attempt to sell the mortgage to an investor right away. This allows them to earn money while at the same time eliminating the risk of having to deal with borrowers who default. If they can’t find an investor to purchase the loan, they have to hold it themselves or find another sponsor to buy it.

Warehouse Lenders

These lenders provide short-term funding to other lenders so that they can fund loans for borrowers. Lenders who use lines of credit like these typically repay them as soon as they sell the mortgage to a buyer on the secondary market. Warehouse lenders don’t work directly with borrowers. The mortgages are held by these lenders as collateral until the correspondent lenders or mortgage banks repay the short-term funds they have borrowed.

Hard Money Lenders

These lenders are either individuals or investment companies that have a lot of cash on hand. They lend money to people who have a hard time qualifying for loans through portfolio lenders. They also work with borrowers who fix up properties and flip them for a profit. Hard money loans typically have to be paid back within several years. Usually, loans from hard money lenders close right away and have flexible terms. However, the origination fees and interest rates are usually quite high – sometimes climbing to anywhere between 10 and 20%. Borrowers also have to provide a significant down payment. The property is typically used as collateral for the loan. If the borrower fails to repay the money, the lender will then take them home.

Comparing Mortgages On The Internet

The majority of mortgage brokers and lenders offer online applications. This makes it easy to compare loans, even for people who are extremely busy with their jobs or families. Many lenders also have modern tools like apps available that allow you to apply for, keep track of, and manage your mortgage using your phone or another mobile device.

If you search for mortgage lenders on Google, you will get close to 72 million results. In addition, you will also be bombarded with ads for lenders who claim to be the best. With so many options out there, trying to decide which lender to work with isn’t easy. Spend some time looking at websites from a variety of lenders. This will give you a chance to familiarize yourself with the different types of loans that are available as well as the borrowing process and the current rates. Lenders who only provide loans through the Internet are a good option if you don’t want to meet in person with a banker. You can also check to see what options are offered by your current credit union or bank. To find the best deal, it is important to compare all of your options.

When browsing through your options online, you probably will see different websites recommending certain lenders. Remember that these sites typically only have relationships with a small group of lenders. In many cases, they also earn commissions for referring borrowers to the lenders that they feature. It is always best to look around on your own rather than relying solely on recommendations.

Key Takeaways

You can make the process of choosing a lender a little bit less intimidating by learning as much as you can about the different types of lenders ahead of time. To accurately compare loans, you may need to submit applications with several different lenders. Gather together your documentation ahead of time. If you have any problems with your credit report, income, or finances, mentioning these issues upfront will improve your chances of finding a loan that will work for your specific 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!

The Difference Between Mortgage Broker & Direct Lender In Texas

Mortgage Broker & Direct Lender In Texas: An Analysis

If you have found the perfect house after a long search, then the next step is to secure a mortgage. A majority of people are usually stressed by this process. First, your finances must be in order, then you have to check your credit rating, and choose where to get your loan from. Typically, you have two options, a mortgage broker or a direct lender.

  • A broker is usually an intermediary, assisting you to determine the best lender for your circumstances and assembling all the information required for the mortgage application.
  • A direct lender, as the phrase states, is a financial institution such as a bank that will assess whether you are eligible for the loan, and if you are, provide the financing.

Mortgage Brokers

A mortgage broker is useful in assisting you to compare alternatives. They will collect different quotes from various financial institutions and present them together to you.

A competent mortgage broker must have the ability to pool more details together, like which lenders provide loans in your location, which provide a specific kind of mortgage that is beneficial to you, and which accommodate or reject applications on mortgages for specific home types such as condos, co-ops, or multi-family homes.

Some financial institutions work only with mortgage brokers, offering borrowers access to mortgages that they would have difficulty coming across.

Thus, rather than submitting an application to every lender separately, you are served through one individual, the broker, to receive information on the type of loan you may qualify for. After you choose your facility type, the broker will liaise with you to submit your application.

Normally, the broker receives a commission, usually a percentage of the mortgage amount. This can sway his research and recommendations. Similar to some fee-based financial planners, some brokers partner with particular lenders which affects the options they present to you.

Direct Lenders

A direct lender is a financial institution that provides mortgage facilities. A majority are saving and loan associations as well as banks.

If you elect to use a direct lender instead of applying through a broker, you might need to apply to different lenders. It’s similar to a college application. Submit an application to the one with the most favorable terms, then have a backup if your best option is not successful.

You might receive your top offer from a financial institution where you are an existing account holder or from one where you fully repaid a debt from previously.

The direct option can be quicker since there is no intermediary and you are dealing with the bank directly and getting immediate feedback on your queries.

Custom Considerations

It is not a must that you stick to using only one of the two. You can contact both direct lenders and mortgage brokers to compare their terms and then evaluate them before choosing your approach.

A broker is a right choice for you if you do not want the inconvenience of contacting different lenders. On the other hand, if you have an existing cordial relationship with your bank, you can work directly with them.

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.  Contact us today Or Call Us @ (866) 772-3802

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!

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!