Knowing The Types Of Texas Conventional Loan

6 Conventional Loan Types That All Texas Home Buyers Need To Know

Conventional loans are a common mortgage option, that even works for first-time home buyers. Yet you may not know that there are different types of conventional loans.

Here is more information about the primary conventional mortgage product types, and how they differ and what they might mean to you.

1. Conforming Conventional Loans

If conventional loans are under the maximum loan amounts that the Federal Housing Finance Agency has set and it matches the other loan standards that the Fannie Mae or Freddie Mac have set, it is known as a “conforming loan”. Because Freddie and Fannie are both government-sponsored enterprises, these are also known as “GSE loans”.

2. Nonconforming Conventional Loans

When conventional loans exceed the FHFA loan limit or it has used underwriting standards which differ from the ones set by Freddie Mac and Fannie Mae, it is known as a “nonconforming conventional” loan. The Jumbo loan is one of the common non-conforming conventional loans. You might require a Jumbo loan if you need finance for something that exceeds $484,350, in most of the counties in the U.S.

3. Fixed-Rate Conventional Loans

Whether they are nonconforming or conforming, every mortgage comes with interest that you have to pay back. With fixed-rate conventional loans, your interest rate will remain the same for the duration of the mortgage. Most buyers prefer the 30-year fixed-rate conventional loan since it translates into affordable monthly payments. There are also shorter terms made available.

4. Adjustable-Rate Conventional Loans

This is an alternative to fixed-rate mortgage as these loans offer an ARM or adjustable-rate mortgage. The conventional loan linked with an adjustable-rate is also called hybrid ARM, which has a rate that might go down or up over time. ARM rates typically adjust annually, from the initial fixed-rate period which is usually 3, 5, 7, or 10 years.

5. Low-Down-Payment Conventional Loans

There was once a time where obtaining conventional loans would require a 20% down payment. Since borrowers that match these requirements only need 80% of the value of the home, this is also known as the “80/20 conventional loan”. However, the requirements for down payments have become a lot more flexible.

  • 3% Down Payment: Home Possible and HomeReady are two conventional-mortgage options that require low down-payments, sometimes as little as 3%. This is also known as a “3-down conventional loan”. Borrowers that qualify for the 3% down payment, have to obtain finance for the remaining 97%.
  • 5% Down Payment: The borrowers that have a low credit score may have to put down a 5% down-payment or more to obtain one of the conventional loans. This means that they would have to finance 95% of the value of the home.
  • Zero Down Payment: If you wanted to know if you can get 100% conventional-loan financing, the answer would be yes. However, these are not always easy to find. Certain lenders which are usually credit unions provide in-house, non-conforming conventional programs for mortgages that offer 100% financing, yet specific qualification requirements usually apply.

6. Conventional Renovation Loans

It can be difficult to find the ideal home within your budget. Investing in a fixer-upper is one of the ways to own a home when move-in ready inventories are low or the price of properties is too high.

You can use any of the interactive features on our website or call us anytime to speak to a seasoned mortgage expert directly. We hope to work with you soon! 

Importance Of Having Your Own House In Texas

7 Amazing Benefits Of Owning A Texas Home

It is everyone’s dream to own a home at some point. The thought of having a space you can truly call yours is simply out of this world, and a goal worth working towards. While many people want the fulfillment that comes with owning a home, some people only see a nightmare from the same. The process of owning the house or saving up for the same can be a lifelong affair, which, to many, is nerve-wracking. The satisfaction of knowing the home is yours is, however, worth any pain. Here are some of the advantages and benefits of owning a home.

1. Social Benefits

Owning a home in a certain community makes you want to belong. You even start feeling attached to its people and the city in general. This is the reason you will want to be involved in any community event around your neighborhood. You even get to have a lasting relationship with other homeowners in the neighborhood.

2. Freedom

Owning a home gives you the freedom to do anything you wish with space and surroundings. You can choose to renovate the house, make a few additions, or even have a garden at the back. This is unlike living in a rented apartment where the landlord has the final say. In addition to this, you can choose what fixtures and amenities you wish to have in the house, and make it happen.

3. You Can Be Proud Of Your Achievement

Many people will be beside themselves with pride after making the last installment for their homes. You have not only achieved a life-long dream but are also sure your family is secure with a home. The security that comes with owning a home, and building up equity from the same, means you can work towards owning a nicer home in the future. You are also sure your family will always have a roof over their head

4. A Home Is An Investment

A home is one of the most significant investments anyone can make. A house, unlike some assets, appreciates with time. This is to say; your home will be worth a lot more in a few years, hence one of the best decisions you ever made. In addition to this, your debt goes down as you pay down the mortgage while its value appreciates significantly.

5. Gain Equity

Equity and investment are directly linked. The more you make payments for your mortgage, the more money you will have for reinvestment. Much of the money paid towards the mortgage goes to paying the principal and the rest to paying the interest off. The principal amount becomes equity that you can use for home upgrades.

6. Tax Benefits

The government uses tax incentives as a way of encouraging citizens to own homes. You thus get to enjoy tax benefits when you make your mortgage payments. This comes particularly in handy when making the initial mortgage payment.

7. Put A Stop To The Need To Move

One thing about renting a house is that you are never really sure how long you will be there. This, however, isn’t the issue when you are a homeowner. Homeownership means you can plan your future even better, hence some form of financial relief. You can thus make gradual improvements to your home to make it more functional and better.

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!

How To Become Eligible For A Texas USDA Loan

Applying For A USDA Loan In Texas? Here’s A Perfect Guide For You

Part 2

Income Limits For USDA Loans

For the loan guarantee, a maximum adjusted annual income amount is set by the USDA. This is a limit to prevent anyone outside of the low to the moderate-income bracket from being a recipient of the loan.

historic Fort Worth home bought with an FHA mortgage loan moderate incomeThe following income limits are set by the USDA:

  • A household with 1-4 members: $90,300
  • A household with 5-8 members: $119,200

There are regional differences that must be accounted for, and the USDA deals with these differences by using household sizes and locations to make limited variations. 115% of the median household income of an area is the base limit that the USDA sets on income. To determine if you’re eligible, they’ll compare the regional median to your qualifying income.

USDA Repayment Income

For the USDA, repayment income and qualifying income carry huge differences. Repayment income shows the ability of a borrower to pay back the loan, which is different from the ability for income requirements to be met by borrowers.

A DTI, or debt to income ratio is used by lenders to figure out just how creditworthy an applicant really is at the time of the application process. USDA loans have a 41% DTI standard. This means that 41% is the maximum amount of a monthly income that can be spent on debts by a borrower.

Although 41% is the standard, a USDA loan can be obtained with a higher DTI. The lending requirements will generally be tougher when applying with a DTI higher than 41%. Each lender has their own guidelines related to this.

Location Requirements For USDA Loans

Homes in rural areas are where USDA loans are intended to be used. The term rural can encompass many locations, and suburbs can often fit the USDA’s definition in many cases.

An open country that is away from an urban area is considered to be a rural area by the USDA. Depending on the area, a maximum population of 35,000 may be required for the designation of rural.

Nearly all of the land available in the U.S is eligible to receive a loan for rural development because of the USDA definition, with 100 million people living across the land.

Any income producing property can’t be purchased with the help of a USDA loan. There is a loophole to this, as properties that aren’t being used for commercial purposes anymore can still be purchased. This includes silos, barns, livestock facilities, and greenhouses.

Properties that can also be eligible:

  • Newly constructed properties
  • Modular and manufactured homes
  • Townhouses and condos
  • Homes that have been foreclosed and subjected to short sales

Thousands of people have benefited from the loan program available from the USDA, and for anyone who wants to become a homeowner, it stands as one of the top options.

In The State Of Texas, Get Your USDA Loan By Going With The Texas Mortgage Pros

We want to give our clients the best service possible and building a foundation with them that will last for years. We will use the utmost security with your information and keep it private, which is more than other companies can say. We are a leading company that many people trust.

Use the tools on our website or call us to speak with a mortgage professional that has the necessary experience to guide you. We can’t wait to work with you.

Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the first article in this series.

How To Become Eligible For A Texas USDA Loan

Applying For A USDA Loan In Texas? Here’s A Perfect Guide For You

Part 1

Anyone who applies for a USDA loan must meet the USDA’s requirements for eligibility. Income, home location, credit, and property usage are all taken into account for eligibility.

The USDA wants to give families with low and moderate incomes clean and safe housing, and these facts are important in making this possible.

USDA Loan Minimum Requirements

Dallas texas brick home bought with assistance paymentsThe USDA requires that these minimum guidelines are followed:

  • Have permanent residence or U.S citizenship
  • Have a credit score that is at least 640 or some way to prove that you’re creditworthy
  • Income that is dependable and stable
  • Mortgage payments for 12 months without being late or any collections taken
  • Less than or equal to 115% of the median income of an area for the adjusted household income
  • The location of the property must be in a rural area that qualifies, and it must be the primary residence

The Rural Development program from the USDA isn’t the only one to have requirements, the lender can have its own set that must be met.

Credit Requirements For USDA Loans

A proper credit history that shows that an applicant can actually pay the loan back, and a steady income are things that an applicant must have.

The USDA loan doesn’t require a specific minimum credit, but applicants can use the automated underwriting system if they have a credit score of at least 640. Those with a score lower than 640 can still apply for the loan but have to deal with more strict guidelines because they must use the manual underwriting option.

The following will be reviewed by a lender to determine your creditworthiness:

  • Patters of repayment
  • Your credit history length
  • Your credit score
  • How your credit is utilized

If an applicant doesn’t have credit, they can still be eligible for the loan, but in order to verify them, the lenders may enact their own policies. They may check insurance payments, utility payments, rent payments, and other sources for credit verification.

Income Requirements For USDA Loans

To determine whether a borrower has the right income for a loan, the USDA uses four calculations that are unique:

  1. Household Income on an Annual Basis
  2. Adjusted Household Income on an Annual Basis
  3. USDA Qualifying Income
  4. Repayment Income

Verifiable and stable income with no signs of stopping is the minimum of what is required of applicants by the USDA. Pay stubs and income taxes from as far back as two years are generally used to check the employment status and income of a person respectively.

The total of all income made by everyone in a home is considered the annual household income. The household limit includes all adults with income, even if they aren’t the loan applicants.

When acceptable deductions are subtracted from the annual income, the adjusted annual income is calculated. Whether a person meets the income restrictions of the loan program is determined by this figure.

Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the next article in this series.

All You Need To Know About Texas VA Loans Part II

Helpful Ideas To Understand VA Loans In Texas

Part 2

What Are The Benefits Of VA Loans?

By applying for a VA loan, you can enjoy the following benefits.

1. No Down Payment

No down payment is required when buying a home with a VA loan. It is one of the loans where you don’t need a down payment. In 2018, 50% of homes purchased using a VA loan didn’t require a down payment.

2. No Limits On Borrowing

With a VA loan, there is no limit on the amount you can borrow. However, there is a limit on the amount of liability for the VA. In 2019, the VA can guarantee a maximum amount of 25% (up to a maximum of $121,087) for a home loan. It matches a maximum loan of $484, 350. If you apply for more than that, the extra amount will not be guaranteed by the VA.

3. No Private Mortgage Insurance

With a VA loan, you are not eligible to pay for a Private Mortgage Insurance because the loans are backed by the government. Note that, with a regular mortgage loan, PMI can vary from 0.5% to about 2.25% of the total loan amount. Therefore, if you took a loan amount of $200,000 and the PMI rate was 1%, you would be forced to pay an extra $166 every month for your mortgage payment.

4. No Minimum Credit Score Requirement

With a VA loan, there is no requirement for minimum credit scores. However, loan lenders give loans to people with a credit score of 620 and more. Having a lower credit score will definitely worry the lenders when it comes to giving you a loan.

5. Assistance For Possible Foreclosure

If you qualify for a VA loan, you will get assistance if you are on the verge of getting a foreclosure. The loan technicians will negotiate with the loan lenders on your behalf if you are having issues with meeting your mortgage payments.

6. No Prepayment Penalties

If you have the money to pay off the loan early, you will not be charged for it.

7. No Limit On The Times You Can Borrow

You don’t necessarily have to be a first-time homebuyer to get a VA loan. If you pay off the loan every time, you can apply for it as often as possible.

8. Bankruptcy & Foreclosure Are A Non-Issue

Have you ever filed for bankruptcy? Have you ever gone through a foreclosure? They are non-issues when it comes to VA loans. You can still qualify in both cases but after 2 years from the date of foreclosure or filing for bankruptcy.

That’s what you need to know about VA loans and how you can benefit when buying a home.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the first article in this series.

All You Need To Know About Texas VA Loans Part I

Helpful Ideas To Understand VA Loans In Texas

Part 1

Are you finally ready to buy your first home? Are you a veteran or active military personnel looking to buy a home? Well, there are challenges involved in buying a home. However, there are a few mortgage options available for veterans referred to as the VA loan. Here’s what you need to know about the VA loan, how it works, and whether you are eligible for it.

What Is A VA Loan?

It is a loan offered by private lenders and guaranteed by the U.S Dept of Veterans Affairs. The VA loan is available to active duty service people, veterans, and their families when they want to buy a new home. It was introduced in the GI Bill in 1944 but has become very popular in the last few decades.

In the early part of 2019, at least 8% of house purchases were backed by a VA loan. It is a very attractive option when buying a new home. Even better, it’s easy to qualify and there is no down payment required for it.

How Does A VA Loan Work?

VA loans are part of the government (non-conventional) loans available in the market today. They don’t work like regular mortgage loans issued by banks or financial lenders. These loans are guaranteed by the government. It means that the government will repay part of the loan to the bank if you default your payments or in the event of foreclosure. In this type of loan, banks have less risk. As such, a lot of people can qualify for it. By 2018, the VA had guaranteed 610,513 loans for purchasing and refinancing homes.

What Are The Requirements To Qualify For A VA Loan?

To qualify for this loan, you must be current or former military personnel and looking to buy a home. You must also meet the following VA service requirements.

  • You must be an active duty service member. You must have been honorably discharged after serving for consecutively 181 days during peacetimes or 90 days during a war.
  • You must have served for more than 6 years in the Selected Reserve or the National Guard.
  • You must be the spouse of a serviceperson who died in the line of duty.

For the application process, you need a certificate of eligibility (COE) to show the loan lenders that you are eligible for a VA loan. The COE should be applied on the VA website, the lender, or through the mail.

You can use any of the interactive features on our website or call us anytime to speak to a diligent mortgage professional directly. We hope to work with you soon! Click here to go to the second article in this series.

 

First-Time Homebuyer In Houston? These Loans Are Available For You

10 Houston First-Time Homebuyer Loans & Programs

As a first-time homebuyer, you must be navigating one of the toughest real estate markets in the economy. It’s very hard to find the right house to buy since most people are buying any available houses to flip for profit. On the other end, builders are now focused on high-end homes because of the escalating costs so they can boost their own profits.

The Benefits Of Loan Programs For First-Time Homebuyers

Are you thinking about buying your first home? Well, there are first-time homebuyer programs, loans, and grants available to you. These are financial assistance programs given to qualified buyers, especially if they meet the set income restrictions and have high credit scores. Here are some of the ways you can benefit from these programs.

1. Grants

You might be eligible for a grant to cover costs related to buying a home such as down payment or closing costs.

2. Assistance With Closing Fees

You can get a loan that puts a cap on the total amount you can be charged for closing fees.

3. Deferred Payments

With these loans, you will not be charged interest or be forced to repay the loan until you sell the home or pay off the mortgage.

4. Savings On Interest

Some loan lenders will pay the interest or subsidize it. You can also get help with qualifying for a loan with reduced interest rates.

5. Loan Forgiveness

If you stay in the home for a predetermined period, a portion of your loan will be forgiven.

6. Assistance With Down Payment

With this program, you will put down a small down payment and the lender covers the rest. Also, in some cases, you will not pay the down payment at all.

10 First-Time Homebuyer Loans & Programs

1. FHA Loan Program

It is a loan for buying a home guaranteed by the Federal Housing Administration. It is the best loan program if you have low credit scores and a little amount of money as a down payment.

2. USDA Loan Program

It is a loan program guaranteed 100% by the U.S Dept of Agriculture. It is applicable to low-income loan borrowers in rural areas.

3. VA Loan Program

It is a loan program guaranteed by the U.S Dept of Veteran Affairs. Here, any military personnel will not pay any down payment. It’s also applicable to veterans and their families.

4. Good Neighbor Next Door Buyer Aid Program

It is a program offered by HUD (the U.S Dept of Housing and Urban Development). It is a housing program for people in law enforcement, emergency medical technicians, firefighters, and teachers.

5. Freddie Mac Or Fannie Mae Loans

They are conventional loans that are backed by Freddie Mac or Fannie Mae. They require a 3% down payment. It’s the best loan for people with strong credit.

6. HomePath Ready Buyer Program

Here, you will get 3% assistance with closing costs if you are a first-time homebuyer. To qualify you must complete an educational course and also buy a foreclosed Freddie Mac or Fannie Mae property.

7. Energy Efficient Mortgage Program

It is backed by VA or FHA loan programs. Here, buyers can combine the total cost of energy-efficient upgrades and apply for loan upfront.

8. FHA Section 203 (k) Loans

Here, you can borrow the money needed to pay for any home improvement projects. You will roll the costs into an FHA loan with the primary mortgage.

9. Local First-Time Home Buyer Programs & Grants

Various cities and states offer first-time buyer grants and programs for a down payment on a new home or assistance with closing costs.

10. Native American Direct Loan

It is a program backed by the VA that offers loans to Native American Veterans. They can buy, build, or renovate homes on their federal trust land.

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!

First Time Home Buyer In Texas? FHA Loan Can Clear The Path For You

Why An FHA Loan Is Ideal For First Time Home Buyer In Texas

It is every American’s dream to own a home. However, homeownership is becoming increasingly expensive with each day. Real estate prices have spiked in many parts of the US, and aspiring homeowners are finding it much harder to put down a down payment and afford the monthly payments. This is not to mention the upkeep and maintenance costs. For some people, renting appears to be the more favorable option.

However, while renting isn’t necessarily a bad thing, you will be pleased to learn that, in a bid to make housing more affordable, US government offers some home loan programs. This is particularly beneficial for those with poor credit. One such loan program is the FHA loan offered by the Federal Housing Authority, and it can prove to be more beneficial than you think.

The Advantages Of FHA Home Loans

There are three key reasons why you should consider the Federal Housing Administration loan program- easy credit requirements, reduced down payments, and low closing costs. While in the case of a conventional home loan you may be required to put a downpayment of 5% or more, with an FHA loan, you are allowed to put down as little as 3.5% or $3,500 per every $100,000 you borrow.

Besides lowered down payment requirements, you don’t need to have a perfect credit score to qualify. People with a credit score as low as 580 can be approved for an FHA loan. It is worth noting that you can also be approved even with a lower credit score but you will have to put a downpayment of 10% or more.

The Federal Housing Administration has made it even easier to qualify as you can be approved even if you have other types of debts. As opposed to conventional mortgage lenders who require that you have a debt-to-income ratio_(your total amount of debt compared to your total income as a percentage) of below 36% including housing, you can be approved for an FHA loan with a debt-to-income ratio of up to 43%.

Should You Get An FHA Home Loan?

While the benefits and downsides discussed above will help you to determine whether you are a good candidate for an FHA loan, you should consider speaking with several lenders before making a final decision. By consulting a mortgage expert, you will be able to find out which loan will be ideal for your financial situation and needs.

Ultimately, FHA loans are suitable for first-time homebuyers who are still struggling to build their credit and save up enough money to invest in a home. With the easy credit requirements, reduced down payment requirement, and higher debt-to-income ratio, the FHA has made it easier for almost everyone to afford a home. However, this is only so if you are looking to buy a home within FHA loan limits.

Even though an FHA loan is favorable to buyers with less-than-perfect credit, the conventional mortgage offers a better deal to those with a good credit score and have enough money for a sizeable down payment. Additionally, if you’ve saved up 20% of your home’s purchase price, a traditional loan will definitely be your best option as you will avoid mortgage insurance costs altogether.

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!

Decided To Have A Texas House? Here’s Initial Payment You Should Prepare

The Down Payment You Should Pay When Purchasing A House In Texas

Down payments are initial payments made when buying something under some form of hire purchase This means that a buyer first pays the initial installment, usually the highest amount of money, after which they can pay the rest in intermittent installments. When it comes to purchasing a house, the down payment you set aside is critical.

Lenders consider the amount that you pay upfront to be the stake you’re willing to put on your new home, hence it will influence the loan amount. The down payment also determines the probability of private mortgage insurance (PMI) as a requirement by the lender. As a rule of thumb, most, if not all lenders will require PMI if the downpayment is less than 20% of the house’s value. It also affects the interest quota. Without a doubt, the higher the down payment, the lower the rate of interest.

Evidently, there’s a lot to think about with regards to making down payments when purchasing a new home. Primarily, the amount to pay initially depends on the cost of the home and the loan program you’re working with. Normally, the amount will be anywhere from 5% to 20%, but lenders vary, and so do their percentages. Some key aspects to consider include:

1. The Loan-To-Value Ratio

The initial installment is used by your lender to calculate the loan-to-value ratio (LTV) of the home. This is one of the factors a lender considers in extending a client’s credit. They also look at debt to income ratio as well as personal credit scores in relation to the LTV. This makes the LTV an important consideration when deciding the amount of down payment to make.

The loan to value ratio is the amount you’re obligated to pay after making the first deposit on the house. It is usually represented a percentage, which is, in essence, is the ratio between the principal amount, to be paid in installments at regular intervals and the estimated value of the house. The higher the initial payment, the lower the loan amount, hence the lower the loan-to-value-ratio. In detail, it is calculated as:

loan-to-value (LTV)= Loan amount/appraisal value or purchase price (The lesser amount is used)

Consider the following scenario:

Mr. & Mrs. Smith wish to buy a house whose purchase price is $200,000 while it’s appraised value is $205,000. The former, being lower will be used by the financial institution to decide the loan amount. If Mr. & Mrs. Smith decide to pay a downpayment of $40,000, she needs an additional loan of $160,000 to fulfill the asking price. In this case, the loan to value equation will be:

loan-to-value (LTV)= Loan amount/appraisal value or purchase price so,

LTV= $160,000/$200,000

LTV= 0.8 which in percentage(multiply by 100) is 80%

2. Private Mortgage Insurance (PMI)

As stated before, a down payment of less than 20% requires a backup PMI. This is because the financial institution stands to lose a lot in case you decide to default the loan, having financed an impressive 80% and above of your purchase. With an LTV as high as this, the lender is investing a tremendous amount, and to protect their risk, comes the insurance. Paying PMI, in turn, increases your monthly installment amounts.

Conclusion

Before deciding on the down payment for the property, assess the pros and cons that come with lending institutions. Would you rather pay a private mortgage insurance every month, even without knowing whether you’ll manage to be a homeowner in the long run, or does it make more sense to wait till you have a surmountable amount to pay as a down payment? With these two financial aspects to consider, the ball is in your court.

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!

Important Things To Do Before You Purchase A Texas House Part III

What Do You Need To Do To Buy A House In Texas

Part 3

7. Find The Right Home

The initial process of finding the perfect home is to know exactly what you want. Write down your needs and your wants and give them a score on how important they are. This usually includes the size of the yard, the number of rooms, or how close the house is to a school district or your workplace.

Dallas texas brick home bought with assistance paymentsTo refine your search, look for the homes that are advertised online. When you check on the online listings, it will give you an idea of the houses currently available for sale and prescreen the homes in your preferred price range. This will ensure you only visit the homes you are actually interested in.

If you are finding it difficult to find homes that you like, speak to a realtor. Real estate agents are experienced in helping buyers to find homes, and they are knowledgeable about the housing market in your area. They can also assist you when it comes to setting expectations that are realistic and they can keep you confident and motivated when you feel like you will never find a home that you really love.

8. Make An Offer

As soon as you find a home that you see yourself living in, do not hesitate. Your realtor will assist you with the details on how to make an offer. You need to decide on the amount you are prepared to pay. If the market is hot, negotiations may not be an available option, which means you might have to pay for the asking price in order to secure the sale. In a cold market, you may be able to negotiate down to a lower price or specific seller concessions. Ask your realtor for advice when working out each detail of the offer.

Your offer has to state the terms linked to the sale, which needs to include any contingencies. A contingency will mean you can cancel the deal if a circumstance has not been met. This could include an inspection of the house that reveals that the home requires costly and significant repairs.

9. Prepare To Close

The next step is to ensure your mortgage is approved. The lenders you are dealing with might ask for updated or additional documentation. If the pre-approval expired, your lender will probably assess your credit score again.

The lender will then arrange an appraisal. This includes a professional that will evaluate the home and then compare the property to other properties that are similar in that area and then make a decision on the value of the home. This is a process that protects the lender and the buyer from overpaying for a property. You should also arrange for a home inspection during this time.

If the appraisal price is less than what you offered to pay, the seller may need to lower the asking price or you would need to cover the shortfall from your own pocket to close the deal. On approval of your mortgage and every detail is worked out, you are now ready for closing day.

Final Thoughts

Find out what is needed for the closing, and whether you need to pay the down payment in advance. You will usually need your passport or driver’s license, a certified or cashier’s check that covers the closing costs. You might also need to prove that you have insurance along with any other supporting documents.

When it is time to sign off the deal, you need to take your time to read over all the paperwork. Read over everything carefully as this is a really large purchase. From here you will be given the keys and remotes to your house. Enjoy every moment, and feel relieved that your buying process is finally over.

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