An Effective Guide For Hiring A Texas Mortgage Lender

10 Important Questions To Ask Your Mortgage Broker Or Lender In Texas

Are you planning to get a mortgage loan? If so, you need to ask the right questions from the mortgage broker or lender before committing to the loan. You need to know about the type of loan you are getting and whether it’s right for you. Not asking the right questions may lead to many problems after you get the loan. Unanticipated and hidden fees are a big issue with most mortgage loans. That’s why you need to continue to shop for the right mortgage broker or lender until you feel confident about the answers you are getting.

Having a solid relationship with the broker is important to get the best deal in town. You will get better assistance, advice, and accurate information from the broker the more he or she knows you. You shouldn’t hesitate to share your personal information with the broker or lender including permission to run your credit report to build a solid relationship with the broker. Here are 10 questions to ask the broker or lender before committing to the loan.

1. Which Type Of Mortgage Loan Is Best For You?

A good lender will want to know more about you and your goal before placing different loan options in front of you. You wouldn’t want a doctor to suggest surgery before knowing your medical condition and history. Likewise, the broker should gather sufficient information before offering the best type of loan for you. Ask the lender or broker to explain the pros and cons of adjustable-rate loans, fixed-rate loans, negative amortization loans, and interest-only loans. Check out how each option would fit in with your personal situation.

2. What Is The Annual Percentage Rate & Interest Rate?

The annual percentage rate (APR) of a mortgage loan is a complex calculation. It adds the interest rate and other related lender fees and divides the sum by the term of the loan. But all brokers don’t compute the APR correctly. On the other hand, you cannot accurately compute the APR rate for an adjustable loan. The APR won’t account for early payoffs either. Ask the lender about the adjustment frequency if the interest rate is adjustable. Also, don’t forget to ask about the highest rate or cap, the margin, index, and the maximum annual adjustment.

3. How Much Down Payment Is Needed?

The 20% down payment is not always mandatory. For example, if you are well-qualified for the loan, you can get away with a down payment of 3% for some types of loans. But there are pros and cons to a lower down payment. Make sure you ask the lender about all the options you have.

One disadvantage of a low down payment is you will have to pay for private mortgage insurance if you put less than 20% down. You will have to pay an increased monthly payment and more closing costs under such circumstances.

4. What Are The Origination Fees & Discount Points?

Each point will be equal to 1% of the loan amount. For example, two points on a $100,000 mortgage will cost you $2,000. The more points you pay, the lower your interest rate will be. Points are also tax-deductible. Most lenders have origination fees in addition to points. They are also known as lender fees. You should ask about lender fees when you are trying to get information on a lender’s or broker’s policy.

5. What Are All The Costs?

Mortgage lender fees also include third-party vendor fees such as credit reports, appraisals, pest inspection reports, title policy, taxes, recording fees, and escrow where applicable. The loan estimate should include an estimation of all these fees. Federal law requires that the broker or lender gives you a loan estimate when getting a mortgage loan. The lender should deliver the loan estimate when the loan application has been completed.

6. Is It Possible To Get A Loan Rate Lock?

Interest rates can change or fluctuate on a daily basis. If you believe that the interest rates are moving up, you should ask the lender if it’s possible to get the loan rate locked. A lender should charge zero to one point to lock the loan rate. Ask if the lender charges a fee for the service and whether the lock-in protects all the loan costs. Are they giving the loan lock-in writing and for how long will they lock the rate?

7. Are There Any Prepayment Penalties?

Some states don’t allow prepayment penalties. So, you need to ask about this. A prepayment penalty will allow the lender to collect an additional 6 months of unearned interest if you decide to pay off the loan early – ether by selling the property or through a refinance. If your state permits prepayment penalties, make sure you ask the lender how much it is. Get to know about the terms of the prepayment since some are in effect only during the first 2-5 years of the mortgage loan.

8. Will The Lender Approve The Loan In-house?

Make sure you get to know if the lender can handle its own underwriting or it’s assigned out. Underwriters will review the loan and issue certain conditions before rejecting/approving the mortgage. FHA and VA loans would take longer to process. But some lenders will automatically approve or disapprove a loan without sending it to the FHA or VA.

9. How Long Will You Take To Disburse The Loan?

The average time to process a loan is between 21 to 45 days. You should know about the closing date when writing a purchase contract. You should coordinate with the lender to get this date. Ask about the obstacles to closing the loan and how long the final application approval will take.

10. Do You Guarantee On-Time Closings?

Closing the transaction on time is important. Your lender should be able to give you a closing date with committing to the loan. You will have to face problems if the lender can’t disburse the loan on time. Ask about any increases in interest rates if the lock-in expires. What if you have to pay movers to reschedule? You need to ask all this from the lender before committing to the loan.

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

Is It Okay For Non-Married Couples To Purchase A Texas House Together?

Buying A Home With Your BF Or GF Might Just Be A Smart Move In Texas

Some of you may think that it’s a crazy idea, but it has numerous benefits too.

Traditionally, couples would wait to tie the knot before deciding they’d purchase a property together. These days, it has been found out that around 25% of serious couples now consider buying a home even before marriage.

When it comes to real estate and its laws, they rule in favor of married couples. However, this doesn’t mean that unmarried couples don’t have legal rights – they do, but they have to perform certain legal steps. If you’re thinking of buying a residential property with your partner, here are some things that you should always remember:

You Get To Qualify For Better Loans

The lender, whether it be a third party lender or a bank, will take into consideration not just one person’s credit score – but they will look into both applicants separately. This means that there are higher chances that you could both get a larger loan amount, as compared if you’ll be applying for a loan individually.

Expenses Are Split Into Two

This is one of the best things about this – you split your expenses into two. This means that you get to save a couple of bucks here and there, making it easier to save money for your future. This could also be beneficial when we’re talking about your down payment since you don’t have to shoulder everything by yourself.

The Risks of Buying A Texas Home Together

If there are benefits, there could also be a couple of downsides when buying a home if you still aren’t married, and some of these are:

  • The Possibility Of A Breakup

Of course, no one wants to think that they would be breaking up. However, a simple mistake and some misunderstandings can make things a little bit complicated. This is why it is important that you have a legal agreement prior to buying a home to make things less complicated.

  • Could Damage Your Credit Score

During the application process, your name and your partner’s name will also be listed in the mortgage forms and the title as well. Your credit will then rely on your partner’s actions such as them forgetting to make a payment. If you two break up and your ex-partner stops paying, then both of your credit scores will be affected.

  • How To Protect Your Investment

While we’re saying that there’s nothing wrong with buying a home with your boyfriend or girlfriend, there are steps that you can take on your own to make sure that your investment is protected. There’s no denying that this is a great way for you to save money for your future, and there’s no perfect time to start investing in the home of your dreams. However, this decision can also damage your finances just in case the relationship goes south.

With that being said, always seek legal help and talk with an attorney for a legal agreement before you start the purchasing process. You should have at least a contract that outlines how the homeownership works, what happens if the relationship turns sour, or if one of the partners dies. This is the first and the most important step that you shouldn’t skip if you’re planning to buy a house with your boyfriend or girlfriend.

Apply For A Home Loan From The Texas Mortgage Pros

When applying for a home loan, it is important that you go with the right company that consists of a team of experienced and reliable mortgage professionals within Texas. The Texas Mortgage Pros not only has this team of experienced professionals, but they are committed to making sure that they provide their clients with services that will put their interests first before anything else. Not only that you’ll get multiple loan programs available, but they also offer the lowest rates within San Antonio, The Woodlands, Spring, Tomball, Austin, Dallas, and Houston, TX. Our team of impeccable mortgage professionals who’ve been working with us for years will make sure that they will personally handle your case and meet with you in person to make sure that you’ll get the home loan that is well-suited for your needs. 

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

Helpful Guide For Buying Your First Home In Texas

7  Steps To Take Prior To Buy Your First Texas Home

One of the most significant milestones in many people’s journey into adulthood is buying a home.

1. Credit

One of the things that you should start off doing is checking your credit. If you have a credit card, you might be able to check through your provider. If not, you can always get a free credit report. When checking, if you find issues that hinder your score, you will be punished with having a higher interest rate. If you find any inconsistencies or wrong accounts linked to your credit, you will want to get full documentation to dispute it. Mortgage companies will always take this into account when they are looking to decide whether or not to provide you with financing. If you don’t have a favorable rating, you want to look for ways to improve it prior to even getting started with the buying process. By raising your credit even a few points, you will be able to drastically improve your rates.

2. Budget Analysis

Understand the numbers. You want to factor in the total amount you have available to spend. Think about everything from how much you are spending on rent, debt, and other fixed costs that you have. While you might believe you can pay for a mortgage, it’s important to go into the process knowing you can. By examining your paycheck and where it is going, you will be able to see where you can improve your budgeting and you will be able to make adjustments to correct issues.

3. Debt Percentage

When you are examining your debt percentage, you want to look to see if you meet the qualifying criteria. A mortgage company is likely going to require that you have 33 percent of your monthly income that you can devote to the cost of the mortgage. Whereas, 38 percent can include consumer debt. If you aren’t within this range, you are likely not going to qualify.

4. Your Down payment

The mortgage company will look very closely at your down payment and its source. They will look at everything from bank statements to money being transferred in and out of your accounts. Because of this, you want to ensure that you are not spending money gifted from friends or family instantly. Rather, you will want to wait for it for a long period of time. The company will also want to be certain that you have the funds available, but also that you are able to cover any and all of the closing costs associated with the sale.

5. Know The Other Costs

When you are looking to purchase a home, you want to be familiar with the other costs that are involved with the home buying process. It’s important that you have considered them. While you might have been paying rent on a monthly basis, you will be taking on a lot of additional costs including but not limited to real estate taxes, a potential association maintenance fee, utilities, homeowner’s insurance, and annual maintenance and repair costs. These costs are likely to be brand new to you have never been a homeowner.

6. Interest Rate & Mortgage

When you enter any mortgage site, you will be presented with so many choices it will make your head spin. Not only will you see different types of rates, but you will also see varying lengths and more. Along with this, you will have to figure out whether you want to lock the rate in or allow it to float throughout.

7. Local Market

You need to understand your local housing market in the area where you are looking to buy. If homes are at an all-time high and the bids are skyrocketing, be wary of jumping in. Housing prices are in a constant state of flux and by purchasing at the wrong time, you can be costing yourself thousands.

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

Why Buying A Texas Home Is The Next Best Thing

Benefits Of Owning A Home In Texas

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

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

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

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

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

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

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

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

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

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

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

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

Discovering & Identifying A Great Mortgage Lenders In Texas

Useful Advice For Finding The Best Possible Texas Mortgage Lenders

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

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

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

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

How Do You Find Mortgage Lenders?

1) Check Out Your Credit Score

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

2) Identify Credit Report Errors & Dispute Them

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

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

3) Collect All The Require Documents

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

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

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

5) Ask Trusted Sources For Suggestions

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

6) Figure Out What Matters To You

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

7) Compare Every Lender Based On Your Most Crucial Criteria

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

In Conclusion

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

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

Knowing Why Purchasing A Texas Home Right Now Is So Important

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

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

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

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

2. You Will Pay Less Tax

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

3. Sell Your Home Whenever You Want

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

4. You Have Your Own Home

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

5. Low-Interest Rates

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

6. Peace Of Mind

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

7. Forced Savings

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

8. Pride

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

9. Pets

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

10. Buyer’s Market

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

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

The Characteristics Of An Adept Mortgage Lender In Texas

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

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

1. Look for a lender that specializes in mortgages.

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

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

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

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

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

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

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

5. Choose a mortgage lender that you can trust.

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

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

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

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

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

1. Avoid Making Large Withdrawals Or Deposits

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

2. Don’t Change Jobs

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

3. Don’t Make Large Purchases On Credit

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

4. Avoid A Home Equity Line Of Credit

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

5. Avoid Closing Credit Accounts

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

6. Don’t Make Payments On Old Collection Accounts

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

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

A Guide When Applying For A Texas Mortgage This Year 2020

Minimum Texas Mortgage Requirements For 2020

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

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

Conventional Loan Requirements

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

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

A Conventional Loan’s Current Minimum Requirements

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

FHA Loan Requirements

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

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

An FHA Loan’s Current Minimum Requirements

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

VA Loan Requirements

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

A VA Loan’s Current Minimum Requirements

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

USDA Loan Requirements

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

A USDA Loan’s Current Minimum Requirements

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

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

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!