A Step-By-Step Guide On How To Find A Professional Texas Mortgage Lender

Understanding How To Find & Finance Your Home In Texas

Buying a house can be a bit of a complex process, but by keeping to the following 10 steps you will the process of finding and financing your future home easy and manageable.

Step 1: Begin Your Research Early

You will want to begin your search early by going through newspapers, classifieds, magazines and other sources with good listings. Take note of the types of houses you are interested in, what prices they are typically asking for and how long they usually stay on the market. Notice if there are any changes in the prices during the time on the market that could be an indication of housing trends.

Step 2: Determine How Much House You Can Afford

You will want to make a decision based on your own financial capacity. But, lenders ill typically advise homebuyers to look for a house that is three to five times what they can put aside for household incomes. This is if they are calculated to pay a 20% down payment and may have other debts on the side.

Step 3: Get Pre-qualified for Your Mortgage

Before you actually begin to look for the home for you, it would be good to know exactly how much cash you will have to work with. You will need to provide your mortgage bankers with some financial information so that you can see what amount you will be eligible for. Once you know how much financial support you can expect from your mortgage lender you will have a better idea of what price range you can begin in.

Step 4: Find The Right Real Estate Agent

A real estate agent is a powerful tool when attempting to buy or sell the house. A real estate agent can add value to your purchase by helping you find a home with the best value you can receive for your money. A good real estate operates on extensive information that is not readily available to the public and this can be extremely useful in finding a good option in your price range. Finally, a real estate agent has extensive experience in the buying process and how to negotiate a sale successfully.

Step 5: Shop For Your Home And Make An Offer

Now you can begin scheduling some appointments to see the homes you are interested in. Because you will improve your chances of landing the best house for you’re with the more options you see you will want to take as many pictures as you can and plenty of notes so you can remember what you like and dislike about the homes you visit.

Be sure to check out the smaller details of each house. For example:

  • Check the plumbing by testing how strong the water pressure is and how long it takes for hot water to begin flowing.
  • Try out the electrical outlets by turning switches on and off and trying out the plugs.
  • Open and close the windows and doors to make sure they are properly functioning.

It’s also important to take a look at the neighborhood and make some notes on details like:

  • What are the conditions of the other homes in the area?
  • What is the traffic on the street like?
  • Is there enough parking if you have a large gathering with family and friends?
  • How convenient is the location in relation to other places you will want to go like shopping centers, schools, parks or restaurants?

Take as long as you need to find a home you are sure about, then you can work with your real estate agent to prepare the perfect offer and negotiate a fair price based on the prices of other homes in the area. Once you and the seller have found a price you can both agree upon the home is then in escrow until all the remaining detail for the house have been completed.

Step 6: Get A Home Inspection

Most often a home inspection is included in the process of coming up with a fair price for a home. This is because your real estate agent will want to be sure the home is structurally sound and not in need of heavy maintenance work. Your real estate agent will arrange for this inspection to take place within a few days of your offer being accepted. This is important as it allows you to renegotiate the deal you have made if the inspection turns up anything that would make you feel uneasy about going through with the deal.

Both the home seller and buyer will receive a report of what was discovered in the home inspectors’ revision. This is when you can choose to stay with the offer as it stands, withdraw the offer or renegotiate. Before the sale is concluded you will have a chance to walk through the house and make sure that all the changes you had mentioned were made.

Step 7: Work With A Mortgage Banker To Select Your Loan

You will find many lenders and a good portion will be offering very competitive loan rates and excellent customer service. You obviously have many questions during your home buying process and it is good to know that our experienced mortgage bankers are on hand to assist you and make this process much easier.

Homebuyers all have their own specific priorities when looking for a mortgage. Some people want to keep the monthly payments as low as they can and others are more interested in keeping their payments from increasing. Others will want a loan based on the understanding that they will be moving again in a few years.

Step 8: Have The Home Appraised

The mortgage lenders will arrange to have an appraiser come by to provide an estimate of the home worth. This appraiser will be a third party company and associated neither with the lender nor the borrower. The figure provided by the appraiser will let all parties know the fair value of the home.

Step 9: Coordinate The Paperwork

Once the financial matters have been concluded there will still be a considerable amount of paperwork that needs to be completed before a home is purchased. Your lender may have a title company that handles all the paperwork.

Step 10: Close The Sale

The deal is closed once the last of the document has been signed, which also includes the papers for the loan. It will usually take a few days for the loan to be funded once the paperwork has been submitted to the lender. Once the seller has received their check, the process is complete and you can move into your new home.

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

Mortgage Lender Shopping: How To Get An Adept Home Loan In Texas

How To Find A Good Texas Mortgage Lender & Get The Loan You Need

If you would like to purchase a home, you need to find a good mortgage lender to work with. Instead of rushing into selecting a mortgage lender, you should take some time to find out more about these lenders and the different ways they can benefit you. When choosing to purchase a property, you should expect to deal with that property for quite some time. In fact, you will likely need to make monthly mortgage payments for several decades until you have officially paid off the cost of the home. Because you need to make payments regularly, finding the right lender is essential.

Starting The Search For A Good Lender

While you do want to get a decent interest rate on your mortgage loan, there is a lot more to it than that. You are going to need to find a mortgage company with caring and experienced professionals that can assist you with the home-buying process. You can follow some of the helpful tips below when you are trying to find the best lender.

Start to Work on Improving Your Credit

Some people do not have the ability to get approved for a mortgage loan because they have such bad credit. You need to know that there are certain requirements you must meet before a lender is going to approve you for the mortgage loan. The reason that people with bad credit are often denied is that the lenders view them as risks. It is hard to believe that someone with such bad credit is going to make payments each month on time.

Some lenders are willing to work with people that have lower credit scores, but they will charge much more interest. If you can start improving your credit score little by little, you can get approved for a decent mortgage loan with very low-interest rates, which will help you save some money over time. You can even negotiate better terms with the different lenders until you find something that is perfect for you. Work on getting your score above the 580 range because it does make such a difference.

Check the credit report to see if the information on your report is accurate. Work on paying off your credit cards at a faster pace, even if it means putting down much more than the monthly minimum. If you start to get your debt lowered, your credit score is going to start going up and you will see a massive improvement.

Understand Your Options

Different types of lenders are available for those looking to obtain a mortgage loan to purchase a home. You need to know of these options before you decide where you are going to get your mortgage loan from.

Credit Unions

Unlike traditional banks, credit unions are owned by the members. They tend to provide mortgage loans with lower interest rates because they are all about helping the people. If you are not a member of a credit union, you can always look for one to join before you start applying for a mortgage loan.

Traditional Bank Loans

Mortgage loans are often provided by some of the leading banks in the industry. If you are banking with a company that does provide these loans, you may even have a better chance of getting approved for the mortgage loan.

Correspondent Lenders

You do have the option of applying for a loan with correspondent lenders. These lenders do have the funds available to provide you with a loan. However, once they do give you the loan, they may choose to sell it to a different financial institution that you would then have to deal with in the future when making your payments.

Savings & Loan

If you are saving with a specific institution, you could potentially get a loan for your mortgage from that institution. Savings and loan institutions regularly offer mortgage loans, but they are not as easy to find as they once were. Even so, they are such a suitable option, so it helps to look around to see if you can find one.

When you are thinking about working with a specific lender, you should check the Better Business Bureau website to get more information on them. You can find out what other people are saying about these lending institutions, too.

Receive A Pre-approval Letter

Getting a pre-approval letter for a mortgage could improve your chances of getting the loan you need. By having the pre-approval letter, lenders will realize that you likely have a decent credit score with a good track record of paying off any debt you might owe. It shows different lenders that your information has been pulled and it is quite possible for you to afford the cost of paying down on your mortgage each month.

If you can get the pre-approval, you can avoid wasting valuable time. The process of receiving a preapproval letter is quite simple. You would simply need to supply some importation information about yourself, including your full name, your social security number, details on any debt you owe, and details on the income you earn. You would need to have copies of your tax returns to provide proof of your income.

Make Some Comparisons

Go online to start getting more information on some of the different mortgage rates that are offered. Although you can get rate quotes, those quotes are subject to change, so you should keep that in mind. The only way to know your exact rate is to provide the lender with your specific information while completing an application for the loan.

After you have obtained a few different quotes, you can start comparing them to figure out which one is best. Doing as much research as you can is ideal. Remember that it is always possible for you to negotiate the rates, too.

Have Questions Ready To Ask

You might want to speak to loved ones about the companies that have worked with when getting mortgage loans. Some of the people you trust the most, such as your siblings, parents, or best friends could have some great advice and recommendations based on their own experiences. When reaching out to different lenders, you should have several questions that you are ready to ask them. These questions include:

  • How can clients reach you when they need to discuss certain matters?
  • How long does it take, on average, to get approved for the mortgage loan?
  • Are there lender fees that I will need to pay after purchasing a home?
  • Are certain fees waived?
  • How much money will I need to have for the down payment to get the loan?

It helps to know more about the costs that come along with purchasing a home. While you know that you will need to make mortgage payments, there are some other expenses that you will have to deal with, such as the cost of closing the deal and the cost of specific transaction fees. You might even need to make a deposit of a certain amount of money to get the process started. If you receive documents from a lender, read through everything before agreeing to anything and signing the documents in front of you.

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

Texas Mortgage Brokers, Mortgage Lenders & Banks: Which Will You Prefer?

Knowing The Role Of Mortgage Brokers, Mortgage Lenders & Banks For Owning A Home In Texas

If you have been looking for a mortgage company then you will have noticed that there are large mortgage companies and banks, and also mortgage brokers. So is there actually a significant difference between them?

What are the pros and cons involved in using a mortgage broker versus going through a bank?

In this article, we will be explaining all of the major differences between Mortgage Brokers and Banks, along with the pros and cons of each so that you can make an informed decision on which is the best option for you and your situation.

What Is A Mortgage Broker?

This professional is an individual who acts as the middle man between the mortgage lender and the homeowner. A broker is able to prepare your financial documents, loan applications and provide you with mortgage pre-approvals just like lenders are able to do.

A mortgage broker will work with several different banks and mortgage lenders and submit your loan files to these financial institutions for them to issue you a loan. The broker’s commission is paid by the lenders for completing your documents and mortgage application.

How Do Direct Lenders & Banks Work?

A direct mortgage lender or Bank is the company that is funding the loan. The loan officer is the person you will be working with and they work for the Bank. Banks are usually licensed in all or most of the 50 states.

Who Can Provide You With A Better Deal, A Mortgage Broker Or A Mortgage Company?

There are important things to take into consideration when choosing whether you want to work with a Bank/Lender or a mortgage broker. Although it might seem like working with a mortgage broker will save you money due to the fact that they have access to numerous lenders and programs, that is actually not always true.

The mortgage company pays the broker’s commission and some lenders pay higher commissions than others. In some cases that can generate a conflict of interest.

One lender might pay a small commission but offer the best deal. Another loan company might pay brokers a higher commission but be more expensive for borrowers.

Which Lender Is The Broker More Likely To Choose?

When you work with a Bank, your loan officer will only have access to the mortgage rates and mortgage programs that their Bank offers. You could potentially get a better deal from a different Bank.

Just be sure to shop around at all times, whether you are working with a Bank or a mortgage broker. You always should speak to at least two lenders or brokers and compare their loan offers. That way you can ensure that you really are receiving the best deal on a home loan.

That is how you save money on your mortgage.

How To Shop For A Mortgage

When you are shopping around for a mortgage loan it is a good idea to talk to both direct lenders and brokers. Mortgage brokers do have access to many different loan programs and hundreds of lenders.

They can shop for interest rates on your behalf and help you with comparing different terms like 15-year and 30-year terms, adjustable-rate mortgages vs. fixed-rate mortgages, and provide you with advice on other things so that a loan can be tailored that is ideal for you.

Using a broker instead of a direct lender can be advantageous if you have imperfect credit since there will be more programs available that you might qualify for.

Pros & Cons Of Both

Advantages of Working with A Mortgage Broker:

Working with an independent mortgage broker does have several advantages associated with it compared to going through a mortgage banker or bank. Brokers have the ability to submit your loan application to several different lenders. That can make them a very attractive option, particularly for borrowers who have a hard time getting a loan due to issues having to do with their income or low credit scores.

In these situations, there are several lenders that the broker has access to that might have programs with lower requirements. That can save you money and time in having to apply with multiple lenders in order to find one that will provide you with a loan.

  • Access to multiple lenders for finding the lowest fees and rates
  • Usually more knowledgeable
  • More options available for individuals with bad credit
  • A majority of brokers work for or own a small company which can make it easier to get in touch with them than a loan officer who works for a large bank or lender.
  • If the mortgage broker is located nearby, then you can meet with them in person

Disadvantages of Working With a Mortgage Broker:

There are some drawbacks as well to working with a mortgage broker instead of with a direct lender. The broker, in some cases, might charge a higher origination fee. They are not actual lenders, so it might take longer to get your loan processed sometimes when you go through a mortgage broker.

Independent mortgage brokers often do not have an in-house underwriter that they have direct communication with, so they will need to submit your loan application to the lending institution’s underwriter. That can delay closing since it causes additional overlays.

They charge higher fees sometimes.

You might not get the best deal (they could have a preference for lenders that pay the highest commissions)

Delays In Closing

Advantages of working with Direct Lenders and Banks:

When you work with an actual lender instead of a middleman you will be able to avoid some of the fees you would need to pay to a mortgage broker. Your loan officer will get paid a commission when they close your loan.

On the other hand, mortgage brokers might not be that interested in finding the best deal for you, and instead, choose to work with the lenders that pay the highest commissions.

  • Loans might not have as many overlays since it is a completely internal process
  • If you use a Local Bank you might know the banker already who is processing your loan, which allows you to speak to the lender directly without having a middle man.
  • A conflict of interest is not created by the commission that is paid
  • You can save on fees that are charged by a broker

Disadvantages of Working with a Direct Lender or Bank:

Directly working with a lender does have some disadvantages. The loan programs with a Bank tend to be more rigid and come with higher requirements. If your credit score is low many local lenders and banks might not be able to assist you unless you have a 620 credit score at least.

Since the loan agent will not have multiple companies that can be compared, you cannot be sure you are receiving the best interest rate on your mortgage.

  • Fewer mortgage options
  • Sometimes the loan officer might be inexperienced
  •  You might not get the lowest rate
  •  Requirements are less flexible

To speak with one of our experienced mortgage professionals directly, just call us anytime or use any of the interactive tools that we provide throughout our website. We look forward to meeting and working with you.

If you have any questions, please feel free to contact us today!

Shopping Around For Texas Mortgage Rates

A Perfect Guide To Finding A Suitable Mortgage In Texas 

For most people, a mortgage will be the largest long-term debt they will ever have. This is why you need to take the time to get the best possible mortgage rate. Doing so will help to minimize the overall costs of owning your own home. If you are unsure about how to start shopping around, there are some tips that you can use to unlock the best rates possible.

Know Your Credit Score

Your credit score will be used by potential lenders to determine if you qualify for a loan and the interest rate you will pay. The higher your credit score, the better the terms of your mortgage will generally be. This is why you need to be proactive and scrutinize your credit report at least 6 months before you start applying for loans. This will give you time to identify and correct any errors.

Consider The Mortgage Types

When you are shopping around for a mortgage, you need to know which loan type is best for you. There are 2 types that you need to consider.

The first is conventional loans which make up around 65% of all the mortgages which are issues. These loans will be offered by private enterprises such as mortgage companies, commercial banks, and credit unions.

The second is government-backed loans. While these loans are obtained through private lenders, they will be fully or partially insured by the American government. These loans will often have less-rigid requirements, smaller down payments, more flexible income requirements, and low credit expectations. The one thing with these loans is that the property will need to be owner-occupied and not an investment or rental property. Low-income individuals and first-time buyers should consider this type of loan.

After looking at the type of mortgage you can get, you need to consider the financing category that the loan falls into. There are two categories that you need to be aware of.

The first is the fixed-rate mortgage. As the name suggests, this mortgage will have a set rate that does not fluctuate throughout the loan term. This is ideal for borrowers as you have predictable payments for the entire mortgage term.

The second option is adjustable-rate mortgages which are also known as variable rate. These mortgages will have interest rates that change periodically and in relation to an index. The introductory rate for these loans is usually lower than the fixed-rate mortgages, but this will change after a set period of time. These loans can be favorable to buyers as the interest rates could decline.

Contact Several Loan Providers

It is important to note that loan officers are not all-knowing. This is why you need to do some homework and understand what the pros and cons of the different mortgage products are. You can hire a mortgage broker to help with this as they source mortgages from lenders and help to facilitate the transaction.

However, these brokers will take fees from lenders in exchange for sending customers to them even if the mortgage product does not suit the customer. Any recommendations you get from a broker should be considered carefully. Never blindly trust the recommendation provided by a broker.

Include The Additional Costs

Borrowers are often distracted by the low advertised interest lenders advertise and overlook the many fees which can increase the overall costs of the mortgage product. This is why you need to take the time to consider all of the costs such as appraisal costs, application fees, underwriting, loan-origination and broker fees. There could also be settlement costs to look out for.

Linked to the interest rates are points which are fees that are paid to lenders and brokers. The more points paid, the lower the interest rate will be. A single point could cost 1% of the loan amount and reduce the interest rate by 0.25%. To fully understand what you will end up paying, you will need to ask that the points be quoted in dollars.

Negotiate

All lenders have to legally provide a three-page loan estimate which details the costs associated with the mortgage you want to get. This has to be provided within 3 days of application. The information on this estimate will include the monthly expenses, the total closing costs, and the estimated interest rates. It is important to note that this is not a loan offer, but it does obligate the lender to accept the listed terms if you have the available finds and meet the required credit approval.

Get It In Writing

If you are happy with the terms proposed, you need to ask for a written rate lock or lock in on the estimate. This needs to include the agreed rate, the term of the loan and the number of points that have to be paid. The majority of lenders will charge a non-refundable fee for locking the terms, but this is generally worth paying as there are a lot of issues that can occur on the road to approval.

Once you have chosen a lender, you will get a pre-approval letter. This is a legally binding agreement to lend the money after income verification, credit checks and funding is secured.

Choose The Best Rate

Completing some online searches and using mortgage rate calculators can help you get a better idea of what is on offer. However, it is important to note that interest rates fluctuate and different lenders could have offers on certain loan products.

Choose The Best Lender

When it comes to choosing the lender, you need to consider the customer service on offer. Loan applications require a lot of paperwork and information which is why you need a reliable point of contact. This contact will answer any questions that you have and will make the entire application process easier. Good customer service also ensures that the approval schedule stays on track and that all the documentation is signed in an efficient and timely manner.

The Online Option

Human interaction is generally preferred, but you can save some money by choosing a mortgage with online lenders. These lenders will theoretically have lower overheads and can offer better rates and lower fees. However, if you would prefer more hand-holding through this process, a traditional lender might be better.

Shopping around for the best mortgage rate is important and you need to be focused. You need to understand the terminology used and choose the right type of mortgage. Your mortgage is something that you will live with for many years to come and it is vital that you choose correctly.

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! 

Shopping For The Best Type Of Texas Mortgage

The Different Types Of Mortgages In Texas: Which Is The Right One?

A potential homeowner who approaches a lending institution for a mortgage loan should be knowledgeable on the different kinds of mortgages that exist. Furthermore, they have to understand the advantages and disadvantages of each type of mortgage facility. This article takes a deep dive into the following mortgages: fixed rate, adjustable rate, 2-step, 3/3 and 3/1 adjustable rate, 10/1 adjustable rate, 5/25 mortgages, 5/5 and 5/1 adjustable rate and balloon mortgages.

Fixed-Rate Mortgages

As the name indicates, a fixed-rate mortgage has the same interest rate throughout the entire loan period. These mortgages are quite popular accounting for 3 out of every 4 home loans taken. The period of the loan agreement can be 10, 15 or 30 years. The 30-year mortgage is a favorite of many people. Though the 30-year mortgage is the preferred choice for a lot of people, it builds up equity very slowly. The 15-year option provides the fastest equity accumulation.

The major edge of the fixed-rate mortgage is that the homeowner is certain on the principal and interest payments throughout the term of the loan. Certainty on payments allows the homeowner to plan their finances with ease as they are sure that the repayment amount is constant.

Due to their predictability, fixed-rate mortgages are favored by homeowners. The interest rate is fixed, the percentage agreed upon on commencement of the loan term does not vary. Payments are constant hence the homeowner knows the exact amount to pay each month. This provides for better insight during budgeting. A borrower who takes up a mortgage during a high-interest rate environment can refinance the mortgage when the rates move lower. However, for refinancing to occur closing costs have to be paid.

The table below provides a comparison of the current interest and the corresponding monthly installments for the different types of home loans.

One Year Adjustable Rate Mortgages

These have adjustable rates. This means that the interest rate for an ARM (adjustable-rate mortgage) changes based on a predetermined periodic schedule after the fixed-rate period at the beginning of the loan elapses. It is a risky alternative as the payments fluctuate significantly from one period to the next. To compensate for the excessive risk taken by the homeowner, a lower interest rate than that of the 30-year fixed rate is applied. Simply put when one borrows using a one year ARM they will have acquired a 30-year loan where the interest rate is reset each year on the loan commencement anniversary date.

Using the one-year adjustable-rate option allows the homeowner to be approved for a higher loan limit, therefore, affording them the opportunity to acquire a higher value house. Homeowners with substantial mortgages can use ARMs and then refinance each year. Lower rates provided under the option will enable them to purchase more valuable homes. Also, they make lower monthly repayments as long as rates remain low.

10/1 ARMs

For the 10/1 ARM, the interest rate for the first ten years of the mortgage is fixed. Once the ten years are over, the rate changes after every year for the remainder of the loan period. The life of the loan is thirty years, so the customer will have the stability of a 30-year fixed-rate mortgage for the first ten years at a lower cost than that of a fixed mortgage loan with the same tenure. However, the adjustable-rate mortgage is not the top option for individuals keen on owning the same house for more than 10 years unless they are accelerating loan repayment through extra payments with the intention to clear their loan in advance.

2-Step Mortgages

A 2-step mortgage is an ARM that has a constant rate for a fraction of the loan and another rate for the remaining section. The interest rates are aligned or changed with respect to the prevailing market rates. The customer might be accorded the chance to choose between a fixed interest rate and a variable rate on the variation day.

Borrowers who choose a two-step mortgage carry the risk that the rate on their mortgage loan will be adjusted upward once the fixed-interest rate stretch is over. Customers who use two-step mortgages usually have intentions of refinancing in the future or are likely to move out of the house before the loan period comes to an end.

5/5 And 5/1 ARMs

5/5 and the 5/1 ARMs are variations of adjustable-rate mortgages where the interest rate and the monthly installment remain constant for five years. The interest rate is usually adjusted at the beginning of year six. Henceforth, for the 5/1 ARM, the interest rate is adjusted after every year while for the 5/5 the change is effected after every 5 years. These ARMs work best for homeowners who intend to stay in the home for more than five years and are open to fluctuations in payments later on.

5/25 Mortgages

This mortgage is also referred to as a “30 due in 5” where the interest rate and the monthly installment remain constant for a period of five years. After the end of the five years, the interest rate is changed to correspond to the prevailing current rate. This means that over the remaining mortgage tenure the payment will not vary. This is an excellent option if the customer is comfortable with a single variation of the payment over the mortgage period.

3/3 And 3/1 ARMs

3/3 and 3/1 ARMs are housing loans where the interest rate and the monthly payment remain constant for 3 years. Changes to the interest rate only occur after the end of the third year. At the start of year 4, the interest rate is changed, for 3/3 ARM the change is after every three years. On the other hand, the 3/1 ARM’s rate changes each year. If a homeowner is considering an adjustable-rate after three years this type of mortgage is a perfect solution.

Balloon Mortgages

They are similar to a fixed-rate mortgage on the way they work and last for a short duration. Usually, monthly installments are significantly lower due to the large lump-sum payment at the end of the mortgage. Basically, only interest is being paid on a monthly basis hence the lower payments. Balloon mortgages are highly suitable for responsible customers who plan to sell their home prior to the expected date of the balloon payment. This is a risky option. If homeowners are unable to meet the balloon payment on the due date they might be necessitated to refinance the balloon payment from the initial lender of the 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!

Acquire A Fabulous House In Houston Texas With The Help Of Texas Mortgage Pros

How Long Does It Take To Buy A Home In Houston Texas?

new Dallas home bought with an FHA mortgage loan moderate incomeAre you planning to purchase a house in Houston, Texas for the very first time? If you are then over the years you might have heard “rumors” about how long it can take to purchase a house.

Some individuals might have told you it is 30 days and others will say it is 60 days. However, in reality, every individual’s experience is solely based on things such as the state of the Real Estate market when it was purchased, real estate demand, and whether or not a buyer could get pre-approved before looking for a house to buy.

How Long Does Buying A House Take?

Say you know the kind of house in Houston Texas you want to purchase all the way down to the specific area, as well as features and amenities inside of the house.

If that is the case, after you have found a house, and have submitted an offer for it, it can take 30 to 60 days from contract to closing.

Why Does The Process Take So Long?

That’s a good question. Every lender has its own process they follow when it comes to the home appraisal process it can take as long as 30 days for the lender to get their appraisal process completed.

While the lender is undergoing through the home appraisal process, as a buyer you can help yourself by hiring a house inspector on your own to have the house checked from the top to the bottom and also you should review the property disclosure statements to ensure there isn’t anything wrong with the house.

If You Are Just Beginning The House Buying Process

If you just getting started with the house purchasing process, then you should take the time at first in order to identify what you are looking for in a house before hiring a Realtor since that will make the job that your agent is to do help you a lot easier.

Once you know what you want in a house, then you should get pre-approved to get a mortgage loan so that you can move forward with purchasing a home without having any questions regarding the financing of the property.

About Us

The Texas Mortgage Pros

The team at Texas Mortgage Pros is comprised of experienced mortgage professionals all across the state of Texas. We are fully committed to providing the highest quality service to all of our clients for all of your mortgage needs. Multiple loans programs from your local area – San Antonio, Tomball, Dallas, Austin, the Woodlands, Spring, and Houston, Texas are combined with the lowest interest rates. Our excellent mortgage professionals have years of experience and will work closely together with you to ensure you get the home loan that is specifically tailored to meet your expectations and specific situation. So whether you are buying your first house, your dream home, consolidating your debt, or refinancing a loan that you currently have, our highly experienced loan officers can assist you with finding the best loan program for you at the lowest possible rate.

The ultimate goal that we have is to create long-lasting relationships with all of our clients so that we can continue providing outstanding service well into the future. Unlike many big national mortgage companies, we will keep all of your information secure and private. We are a trusted name within the lending community that you can rely on.

To speak with any of our experienced mortgage professionals directly, just give us a call or use any of the interactive tools that are located on our website. We look forward to assisting you. Visit our blog for more related articles on how to execute the best SEO in Houston!

A Closer Look At 2019’s Minimum Requirements For A Mortgage In Texas

2019 Minimum Texas Mortgage Requirements

With interest rates on the rise, you might want to seriously consider purchasing a house sooner instead of later. The next thing that you might be thinking about is whether you can qualify to get a mortgage or not given where interest rates are currently.

Although lenders have somewhat relaxed their standards since the height of the financial crisis that started ten years ago, there are certain minimum standards that you will need to meet in order to qualify for certain mortgages.

Specific financial documents, a decent debt-to-income ratio, and good credit scores are a few things that you will need for applying and qualifying for a home loan.

The specific requirements will mainly depend on the kind of loan you apply for. Therefore, in this guide, we have broken the lending requirements down for several different kinds of loans.

Requirements of FHA Loans

One of the easiest types of home loans to obtain is a mortgage from the Federal Housing Administration. Because insurance is provided on the mortgage by the FHA, quite often FHA-approved lenders can offer terms and rates that are more favorable.

Also, lenders are more comfortable with borrowers who are potentially more riskier given that 90 of the mortgage is backed up by the FHA. FHA mortgages have lower downpayment requirements which make them good for first-time homebuyers who might not have enough money in saving to make the regular 20% downpayment is when buying a house.

For FHA-approved mortgages, the following are the current minimum requirements:

Down Payment

A minimum 3.5% downpayment and credit score of 500 at least. A 10% downpayment may come from your personal bank account, a local downpayment assistance program, or gift from one of your relatives.

Debt-to-Income Ratio

The debt-to-income ratio on FHA mortgages is set by the Department of Housing and Urban Development (HUD). The front-end ratio currently is 31% with a 43% back-end. The front-end ratio only considers housing-related costs, like the monthly mortgage payment, insurance, and property taxes. The back-end ratio considers all monthly debt, which includes housing costs, credit card payments, car loans, and any other forms of recurring debt.

Residence

The house must be your primary residence for the first year at least. That includes whether you are purchasing a single-family house or a four- or two-unit property.

Employment

You are required to have proof of employment and steady income for the past two years, along with explanations if you have frequent employment changes.

Mortgage Insurance

On an FHA loan, you are required to have mortgage insurance no matter how much your downpayment is. On FHA loans you need to pay two different mortgage insurance premiums – an upfront mortgage insurance premium payment and your monthly mortgage insurance payments that are paid each month for the entire life of your loan. The upfront mortgage insurance premium that must be paid is 1.75% of the balance of your loan. It is due at closing and normally financed as part of your loan. Once you make your 3.5% minimum downpayment, then you will need to pay a yearly 0.85% fee of the total amount of your loan. That amount is divided by 12 and then is part of your monthly payments for the life of your FHA loan.

Requirements On Conventional Loans

A conventional 15-year or 30-year mortgage as requirements that are slightly stricter compared to an FHA loan. However, it does come with some longer-term benefits and flexibility.

Down Payment

There are some lenders that might let you make as low as a 3% downpayment in order to qualify to get a conventional mortgage, but you will be required to have mortgage insurance. Some low downpayment programs might have income limits, so make sure you check the address on the properties along with your loan officer to find out if there are any restrictions or not.

Mortgage Insurance

On a conventional mortgage, you are not required to carry private mortgage insurance (PMI) and pay for it every month if you can make at least a 20% downpayment on the property. However, if you pay a lower downpayment, then you will need to pay 0.15 to 1.95% of the balance on your loan in FMI fees every year.

Another benefit that conventional loans offer is that after you have the principle down to 78% of the original property value, the lender is required to stop charging mortgage insurance if you make your payments on time. On an FHA loan, when you make a minimum downpayment, the only thing that you can do to eliminate monthly mortgage insurance is refinancing your loan.

Credit Score

On a conventional mortgage, the minimum score that you need to have is 620. However, there are some lenders that might require a 640 minimum score. Remember that having a better (higher) credit score will allow you to receive a better interest rate along with a lower mortgage insurance monthly payment.

Employment

Proof of regular income is required by lenders and they will look more closely at your earnings and employment history from the last two years.

Debt-to-Income Ratio

Conventional lenders, as of 2018, allow for up to 50% DTIs in certain cases. For any with a debt ratio more than 45, there is one caveat: For people with higher debt ratios, Numerous mortgage companies now require a 700 minimum credit score.

Requirements For VA Loans

The Veteran Affairs Department offers a mortgage for active-duty military personnel, veterans, reservists, and their families. Part of the loan is guaranteed by the VA, which allows lenders to offer military personnel more favorable terms.

Certificate Of Eligibility

In order to qualify to receive a VA mortgage, you also are going to need to get a VA loan certificate of eligibility. It verifies that the military service requirements are met by the applicant in order to be eligible to get a VA mortgage. Certain identification and documents. Veterans and military personnel may apply, by mail, or via a lender after the form is completed.

Down Payment

There is no downpayment that is required.

Mortgage Insurance

There are no PMI fees that come with VA loans. However, a funding fee is charged. It is charged at closing and normally is financed with the loan amount. The funding fee amount will depend on whether or not it is the first time that the veteran is using their eligibility. If an applicant has a disability that relates to her or his military service, then the funding fee might be waived.

Credit Score

There is no minimum credit score requirement on VA loans. However, a majority of lenders funding VA loans do have a minimum 620 credit score requirement. The VA loan program just requires the lender to review the whole loan profile in order to ensure that the veteran applying for the loan has the ability to repay it.

Income

No minimum income threshold must be met, although applicants do need to provide steady income proof.

Debt-to-Income Ratio

It is recommended that your debt-to-income ratio be no higher than 41% to qualify for VA loans. A higher debt ratio might be approved since a VA lender will also look a the residual income of the veteran, which is calculated based on the borrower’s after-tax income, less expense along with a monthly maintenance calculation that is based on the number of members in the veteran’s family and size of the home.

Requirements for USDA Guaranteed Loans

A mortgage program is offered by the U.S. Department of Agriculture to give low to moderate-income families the opportunity to own their own house in designated rural areas. Applicants may relocate, improve, rehabilitate, or build a dwelling that is located in an eligible rural area. 2010 U.S census data on population is used to determine the rural designated areas.

On USDA-guarantee loans, the program backs 90% of the amount of the loan, and that enables USDA-approved lenders to take borrowers into consideration that might not qualify to get a conventional home loan. A 640 minimum credit score is required on UDA mortgage loans to be automatically approved – as long as the other requirements are met as well. However, homebuyers that have lower credit scores still might be considered for a loan that is underwritten manually.

Special eligibility requirements for your state must be met in order to qualify for a USDA mortgage. The USDA online tool can be used to determine whether or not the property is in a designated rural area. You will have to enter the address, city, and state of the house into the tool. That will confirm whether or not the house you are interested in buying is in one of the USDA designated rural areas or not.

The USDA map can be used to choose your state and then determine whether you meet the income eligibility requirements. The income limits vary based on family size, county, and city.

The homebuyer must meet the following basic requirements as well in order to qualify to get a USDA mortgage:

  1. Agree to personally occupy the house as their primary residence. The home cannot be rented out or used as a second house.
  2. Must be either a qualified alien, noncitizen national or U.S. citizen.
  3. Can incur a loan obligation legally. That just means the homebuyer hasn’t been declared to be incompetent and has the ability to enter into legally binding contracts and understand what the debt obligations are.
  4. Has not been banned or suspended from participation in federal programs.
  5. Indicate a willingness to meet their loan obligations on time.
  6. Buys a property that satisfies all of the criteria of the USDA program, including being located in a rural designated area.

Debt-to-Income Ratio

For UDA home loans, the standard DTI ratio is 29%/41% of the gross monthly income of the applicant. On a UDA loan, the maximum allowable DTI is 32%/44% of the person’s gross monthly income, when all of the applications of a loan have credit scores of 680 at least. Under some circumstances, higher ratios are allowed by the USDA on a case-by-case basis. In order to get a waiver for a higher ratio, the borrower must request it from a USDA-approved lender and have it documented by them.

Requirements For HomePossible & HomeReady Loans

HomeReady Loans

The HomeReady mortgage program is offered by Fannie Mae, which is a government-sponsored agency.

Income

The programs are designed to assist prospective homebuyers with low and moderate incomes and limited funds for a downpayment on a house.

Down Payment

A 3% downpayment is required from a gift or the borrower’s own funds.

Credit Score

A minimum 620 credit score is required.

Credit History

For homeowners lacking a credit score due to not having a credit history, a HomeReady loan can be a good solution. They can offer financial statements as a substitute such as on-time rental payments for 12 months or other types of monthly payments such as utility bill payments that don’t appear on a credit report.

Debt-to-Income Ratio

The HomePossible and HomeReady programs may be approved with up to a 50% debt-to-income ratio with strong credit along with other compensating factors like retirement funds or extra savings for reserves.

HomePossible

This program is managed by Freddie Mac.

Income

The HomePossible mortgage is similar to the HomeReady one, but there is one key difference between them. The HomePossible programs allow a borrower to include a non-borrower’s income into the financial calculations – which is income from another individual or individuals who are living in the house to count towards the total monthly income, even when those people are not on the mortgage loan. That can frequently benefit a homeowner who is taking care of a family member who lives in their home who receives Social Security or disability.

Credit

A minimum 620 credit score is required.

Down Payment

There is a 3% minimum downpayment required, and additional flexibility in terms of what the source is for the downpayment. The HomePossible guidelines allow the total downpayment now to come from sweat equity, meaning that the borrower can contribute handyman skills rather than money towards their downpayment.

Debt-to-Income Ratio

There is a 43% maximum DTI, but there are exceptions up to 50% depending on how strong the borrower’s credit and income are, and whether or not they have any extra money in their bank account (reserves) for making future mortgage payments.

Key Mortgage Documents

Before you apply for a mortgage, the process can flow a lot smoother if you organize all of the paperwork and financial documents that are typically required by lenders on the loan application.

They may include:

  • Pay stubs for the past 30 days
  • W-2’s for all jobs that go back two years
  • A signed purchase agreement with the home’s seller
  • Tax returns dating back two years
  • Bank statements for the past 60 days
  • If you are self-employed, 1099 forms
  • Homeowners insurance proof
  • Documented sources of income such as stock earnings and dividends
  • Pension statements
  • Proof of any bonus income
  • If applicable, disability or Social Security income award letters
  • Securities documents like life insurance policies, bonds, and stocks

Some lender might require written verification of your position and salary, printed on the company letterhead of your employer. The might send a form for verifying employment to the human resource department of your employer to complete.

Get Preapproved For Your Mortgage

Before shopping for a house, it is wise to find out the amount you potentially will qualify to borrow. This means you don’t have to waste your time looking at houses that are outside of your price range. When you have a mortgage pre-approval, that means that the lender has examined your current finances, income stability, and credit history, and is prepared tentatively to provide you with a loan on a house.

You will need to provide the following in order to obtain a pre-approval from your lender:

  • Your social security number and identification. 
  • All of the banks on your bank statements from the two most recent months.
  • Employment verification, which consists of either W-2’s for two years (or if you are self-employed tax returns) or a month’s worth of pay stubs.
  • Your credit report will also be pulled by the lender.

Usually, a mortgage pre-approval is good for a maximum of 90 days. Once that time has passed, a creditor will normally want to review your fiance again to see if there have been any changes.

You don’t need to worry about having several inquiries on your credit report if you obtain pre-approval from several different lenders. All of them will count as just one hard inquiry when they are done within a short period of time (typically 15 to 45 days).

Purchasing a house is a major financial commitment and culminates a lifelong dream for many people. Texas Mortgage Pros can assist you with comparing mortgage offers and products. It might be a long road to homeownership, but it doesn’t need to be a rocky one. If you arm yourself with the necessary information ahead of time about various loan programs that are available and what the minimum requirements are for each of them, and the financial documents that you will need to have, then you will have taken the important first steps towards smoother mortgage processing.

About Us

The Texas Mortgage Pros

Our team at the Texas Mortgage Pros is comprised of mortgage professionals all across the state of Texas. We are dedicated to providing all of our clients with the best service possible for all of your mortgage needs. When combined with the lowest interest rates and the multiple loan programs that are available in your local area – Houston, Austin, Dallas, the Woodlands, Tomball, San Antonio, and Spring, Texas. Our mortgage professionals have years of experience and will work personally with you to ensure that you receive a home loan that is specifically tailored to meet your expectations and situation. Whether you are consolidating debt, refinancing your existing loan, buying your first house or dream home, our highly experienced loan officers can assist you with finding the best loan programs at the lowest possible rate.

Our ultimate goal is to develop a lasting relationship with all of our clients so that we can continue providing them with outstanding service for many years into the future. Unlike many large nationwide mortgage companies, we will keep all of your information private and secure. Throughout the entire lending community, our name is a highly trustworthy one.

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