DFW Mortgage Guide - The Blog

"Home Alone" House For Sale - Only $2.4 Mil!

2011-05-06T11:29:00.000-05:00

I've always said that when I finally get rich enough to spend millions of dollars on a house I will buy the one from Ferris Buellers Day Off, but now I'm not sure. Why, you ask? Well, the home used in the movie Home Alone is officially on the market.

Listed at $2.4 Million, the property is located in Winnetka, Illinois (which is a suburb of Chicago) and was built in 1920 and boasts a whopping 14 rooms. Marissa Hopkins, the listing agent (lucky) with Coldwell Banker Residential Brokerage firm in Winnetka, says that they are only showing the home to qualified borrowers. So if you would like to buy the house please let me know. I would absolute LOVE to do the mortgage on this place. :) Here's some pictures to appease the masses:

Source: http://thechive.com/2011/05/06/home-alone-house-for-sale-lets-take-a-peak-inside-25-photos/

NAMB Lawsuit Fails…Compensation Rule Becomes Law April 1

2011-04-07T09:47:00.007-05:00

The dreaded Loan Officer Compensation Law, which is a very heated debate right now in the Mortgage Industry, officially went into effect yesterday. This new rule will change almost everything about mortgage lending, so if you are looking to buy a house please don't hesitate to call us for more information.

We can walk you through the new mortgage process and get you into a home you love, and a loan you can afford. Call 817-527-3164 or email mpate@wewalkyouhome.com for more details.

Click the link below for even more information:

NAMB Lawsuit Fails…Compensation Rule Becomes Law April 1

I think this is cool. Now we can spend money at baseball games 4 times faster!

2011-03-29T13:19:00.000-05:00

Forensic Mortgage Audits: For Real or For Fraud?

2011-02-28T13:23:00.000-06:00

Back in 2008, as the United States and millions of homeowners faced the real estate crisis, a multitude of new companies across the country came out of nowhere offering loan modifications and “foreclosure rescue services”, which aimed at helping consumers that were behind on their home loans. On the verge of default and foreclosure, desperate homeowners flocked to these companies hoping to keep themselves out of trouble, and also hoping to keep themselves inside their homes. Sure, some of these companies were legitimate, but many many more were not, and in turn they ended up ripping off literally thousands of Americans across the country that were struggling helplessly.

Then, in 2009, the government stepped in and for the most part shut down many of the firms that were fraudulently offering these loan modifications to the public. All was well (for a while) until a new scam recently came about……Forensic Mortgage Audits.

Just like the Loan Modifications of the past, these loan audits claim to help consumers out of their mortgage troubles by identifying any illegalities performed by your lender, broker, or other parties in conjunction or associated with the mortgage you obtained. Thus, in theory, forensic mortgage audits should be very helpful to homeowners.

Unfortunately (and regrettably) not all of these companies that make themselves available to you are actually qualified to provide audits. In fact, most loan audits these days are offered or performed by people without any legal training or attorney backing at all. These fraudulent businesses exploit consumers by selling mortgage loan audits that require you to pay a large upfront fee in exchange for a review of your mortgage to see if your lender complied with mortgage lending laws. They claim that if it turns out your loan was funded unlawfully you might end up being entitled to compensation, a refund of all interest and principal payments made for the last three years, all non-recurring closing costs, legal fees, or a renegotiation or modification of the terms of the loan.

But here’s the kicker. The FTC says it has found no evidence whatsoever that forensic loan audits will help you get a loan modification or any other foreclosure relief. In fact, the FTC even goes as far to say on their website that:

“Nothing could be further from the truth…according to its law enforcement officers:

•    there is no evidence that forensic loan audits will help you get a loan modification or any other foreclosure relief, even if they’re conducted by a licensed, legitimate and trained auditor, mortgage professional or lawyer.
•    some federal laws allow you to sue your lender based on errors in your loan documents. But even if you sue and win, your lender is not required to modify your loan simply to make your payments more affordable.
•    if you cancel your loan, you will have to return the borrowed money, which may result in you losing your home.”

So what can you legitimately do for help if you find yourself behind on your mortgage and facing the possibility of foreclosure? The best thing you can do is stay in touch with your loan servicer or lender. Whoever holds the note to your home would definitely rather work with you than have the property foreclosed upon. Many lenders will even offer you the chance to negotiate a new repayment schedule to get you back on track. The FTC also tells us that if you do decide to pursue a mortgage audit or any foreclosure relief system, make sure to BE CAREFUL, and avoid any business that:

•    guarantees to stop the foreclosure process – no matter what your circumstances are
•    instructs you not to contact your lender, lawyer or credit or housing counselor
•    collects a fee before providing any services accepts payment only by cashier’s check or wire transfer
•    encourages you to lease your home so you can buy it back over time
•    recommends that you make your mortgage payments directly to it, rather than your lender
•    urges you to transfer your property deed or title to it
•    offers to buy your house for cash at a fixed price that is inappropriate for the housing market
•    pressures you to sign papers you haven’t had a chance to read thoroughly or that you don’t understand.

Also, if you think you’ve been in contact with a foreclosure fraudster, contact:

•    Federal Trade Commission – www.ftc.gov
•    Your state Attorney General – www.naag.org
•    Your local Better Business Bureau – www.bbb.org

Resources: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt177.shtm

Fort Worth News: Cafe Brazil is coming to town!

2011-01-04T09:48:00.000-06:00

Per the company's website (http://cafebrazil.com), the famous Dallas restaurant Cafe Brazil is opening up a new location in Fort Worth come mid march! This is great news, as this place is just plain delicious!

The website says that the new location will be "on TCU campus" but the address they give would put it right down the street from Fuzzy's, on Berry. I guess we will find out which one is correct soon enough. Keep tuned in for further details, or you can keep checking the companies website for more information.

http://cafebrazil.com/2010/12/cafe-brazil-is-coming-to-fort-worth/

How would you make real estate investments in the United States easier?

2010-12-17T10:14:00.002-06:00

This week, our guest blogger Daisy joins us to talk about real estate investments in the United States. Enjoy!

The real estate business is not for everyone. It is a highly volatile market. There are constant fluctuations in the industry and prices rise and fall at regular intervals. It is not really that easy to plan an investment in, lets say, the San Jose real estate industry, or even here in Fort Worth. Individuals normally use agents to take care of their real estate needs. How would it be if someone makes it easier for you to manage your real estate issues?

Generally, a typical real estate investment is divided into 3 main issues. You may want to follow the basic steps in order to make your estate investment a successful venture, even if you happen to find yourself in San Jose instead of Fort Worth. Registration may be easier for landowners that have rights of ownership on land. You or any investor may like to follow certain simple steps in order that your investment becomes worth it. An investment in San Jose real estate is perhaps the greatest investment anyone in the state would make., just like Fort Worth, TX. It is probably an investment for a lifetime. If you are a visitor from another land, then you may find it a little difficult to buy land in San Jose or Fort Worth, but with few simple steps you could make it worth a try. When you are from a foreign land, language can become a barrier. In addition to this, you may also be unaware of the laws that govern the San Jose real estate market. You must first find out the rules and regulations before buying any kind of property in the state.

As a buyer, it is very essential that you understand the detailed process of buying. So, get some professional help if needed and learn the ropes of San Jose andFort Worth real estate buying and selling to make things smooth. There may be different types of properties like house, time shares, condominiums and others. If you want to buy property then you must have good knowledge about the type of property you want to invest in. In addition to this, the rights related to the property must be known. You must also be aware of the detailed process of purchase and the fees that may be payable. You may also want to assess the strategies for protecting your investments.

Stop throwing away your money! Use NWBO to sell your home!

2010-10-04T15:44:00.000-05:00

HOW YOU ARE GETTING OVERCHARGED FOR ANTIQUATED SERVICES

One of the most little known facts about the real estate market today has to do with realtors themselves and the insane commissions they make from selling houses. The fact is, 20 years ago realtors served a quality purpose. They found houses for buyers, sold houses for sellers and made offers on both sides behalf.

For doing so, realtors usually charged around 3% of the sales price in commissions to both parties (that's 6% total). The problem with this is that it was 20 years ago, and since then, the internet and technology has changed the real estate game in unimaginable ways.

Nowadays, if you are selling your home, you will be paying a realtor 3% of your hard earned equity (the money you have in your home, built up through your mortgage payments) to a real estate agent who really isn't doing anything at all. Why would you do that? What alternative do you have?

WHAT ELSE CAN YOU DO?

That's where NWBO comes in. Nation Wide By Owner (NWBO) takes a flat fee (usually around $399) and lists your home on the internet, gives you one of our BRILLIANT YELLOW SIGNS for outdoor exposure, and even ASSISTS YOU WITH THE PAPERWORK. In fact, they even have ON SITE MORTGAGE PROFESSIONALS that will do all the financial work once you find a buyer for your home.

By doing this, you can save up to 6% of your total equity. How much is 6%? Well here's an example. Let's say your home sells for $200,000. You can do one of two things. You can either sell your home with NWBO for $399, or you can pay $12,000 out to realtors for doing the same job. That's right. $12,000. You can keep it or you can throw it away. The choice is yours.

SO the question is, why WOULDN'T you use NWBO to sell your home?

HUD Offers Homes in DFW for 50% Off List Price

2010-10-04T15:36:00.000-05:00

Today’s real estate market represents one of the most affordable time in history to purchase a home, due to low mortgage rates, discounted prices and government incentives. Add in the recent rise in foreclosures, and it is not uncommon to see buyers get up to 20% off the purchase price when they make an offer on a new house.

Some fortunate buyers, though, are getting up to 50% off the purchase price due to a new incentive called the Good Neighbor Next Door Program, which offers qualified borrowers the opportunity to buy HUD homes in approved neighborhoods for half off. That’s right, half off. To make these HUD homes even more affordable, buyers can apply for FHA-insured mortgages that require down payments of only $100.

WHO GETS THE DISCOUNT?

So who exactly qualifies for this excellent (and almost too good to be true) opportunity? HUD tells us:

“Law enforcement officers, pre-Kindergarten through 12th grade teachers and firefighters/emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a discount of 50% from the list price of the home.”

Why would they do this? The purpose, is “to strengthen communities by encouraging employed, professional law enforcement officers, teachers and firefighters/emergency medical technicians to live in the community.”

ARE THERE ANY STIPULATIONS?

So what’s the catch? The main requirement for the discount is a guarantee that you will occupy the home as your primary residence for at least 3 years. After the 3 years have passed you are free to do whatever you want. In fact, after you buy the home and live there for the full time period, you can legally sell it. All of the profit and equity from the sale are yours to keep! This means that not only is the program a great way to break into homeownership for people who otherwise couldn’t afford it, but it is also a great way to build up equity and make some money in the process. Oh, and you can even refinance the mortgage down the road if it happens to be to get a lower rate or even to make repairs.

The other main requirement for the program has to do with the house itself. Qualifying properties must be located in HUD approved neighborhoods, meaning you can’t just go out and find any house you would like. Don’t worry though, qualifying neighborhoods are located all across Texas, including many areas in DFW.

Want to find out if you qualify for this type of loan? Are you interested in seeing which properties qualify as approved neighborhoods? Feel free to CONTACT US and we will get back to you as soon as possible. The department of Housing and Urban Development updates the areas which are eligible quite frequently, so if you can’t find something you like immediately just give it some time. You can also visit HUD’s website for more information.

Obama to Bail out Homeowners in Dallas Fort Worth?

2010-10-04T15:34:00.001-05:00

News from Washington is that very soon President Obama might order Fannie Mae and Freddie Mac (who are government controlled) to bail out homeowners who currently owe more than their property is worth. This is an astounding development, as there are literally millions of Americans in this position right now. As a matter of fact, a total of (approximately) 15 million mortgages in the United States are currently in a state of "negative equity" which equates to about 1 in 5 homes. Wow.

What does this mean for Fort Worth and Dallas? It means that if you are in this situation, your neighbors (and pretty much every taxpayer) may soon be footing the bill for your mortgage. It also means that if you are currently waiting to refinance your loan, or if you are in the process of getting a new home, you might want to speak with your loan officer and see if they advise locking in your interest rate. Some analysts are predicting a massive jump if this bill ends up getting passed.

As always, we will keep you updated on the progress of this situation as details come available to us. If you have any questions about it, or if you are interested in getting a mortgage, don't hesitate to CONTACT US and we will get back to you as soon as possible.

USDA Rural Development Loans ARE BACK!

2010-10-04T15:33:00.001-05:00

As of yesterday, the US House of Representatives passed a new bill (HR 4899) which includes additional funds for the Rural Development Loan Program. This is HUGE news, as many many of these loans have been put into suspense over the past several months, or have been waiting for "subject to" commitments, which has been keeping them from closing, and not coincidentally, people from moving into their new homes.

These additional funds will also be available for consumers looking to purchase new homes, although there is one small change to the previous requirements for qualifying. People are still eligible for the ever popular 100% financing the USDA RD loan offers, but the up front Funding Fee has been increased from 2% to 3.5%. This is small potatoes considering that this funding fee can be rolled into the loan amount, so you don't have to pay for anything out of pocket at closing (theoretically).

If you have questions about the USDA Rural Development loan, or what properties in Fort Worth or Dallas qualify, don't hesitate to CONTACT US and we will review your situation. Don't miss out on this great opportunity!

Time is Running Out to Refinance in Fort Worth-Dallas

2010-10-04T15:32:00.001-05:00

This is going to be short and sweet, but I figured it is worth noting that this refinance boom we have been experiencing lately could be coming to an end very very soon. Why? Well, if history is to be our guide, we could be at the apex right as we speak. And you can't get any better than the apex.

For example, from April to July rates have been dropping quite steadily, but for the last several weeks they have leveled out, and don't seem to be dropping again. In fact, all signs point to rates going back UP before we see any type of drop again.

What does this mean to you? It means that if you are on the fence about refinancing your mortgage you should take advantage of these low rates NOW before they go back up. This is the best we have seen since 1972, and if you don't feel like waiting another 40 years you should CONTACT US as soon as possible.

We can get your loan refinanced faster than you could even imagine. OK maybe not faster than you could even imagine, but I can guarantee you it's quick.

Buying HUD Homes - A Simple Guide

2010-10-04T15:30:00.000-05:00

The following information is provided in effort to give you an introduction on HUD homes, and how they can be purchased by you as a consumer.

WHAT IS A HUD HOME?

In its most basic sense, a HUD home is a one to four unit property (residential) that is foreclosed upon and then acquired by HUD, who in turn offers it for sale to recover any loss it may have incurred on said foreclosure claim. The houses are then sold to the public through internet listing sites that are ran by property management companies who are under contract from HUD. CLICK HERE for local Dallas-Fort Worth HUD home listings.

HOW DO I GET ONE?

If you find a property you like, just notify your real estate agent who can make an offer for you on your behalf. HUD will even pay the real estate agent’s commission (if it is included in the purchase contract). If you need a real estate agent just contact us and we will find the best one for you!

WHAT ABOUT PRICE?

Based on the most recent appraisal, HUD homes are offered for sale at fair market value. In general, HUD homes are put on the market and sold during a particular time, which is known as the “offer period.” Many different borrowers or investors may submit their offer during this time period, at the end of which the most desirable offer is accepted. If none are accepted then the property will be continued for sale on an indefinite “extended” basis. In the end, the mortgage broker or real estate agent will be notified within 48 hours of HUD’s acceptance of any offer.

WHAT ABOUT GETTING FINANCING?

In order to buy a HUD home, you must do so by paying cash or by obtaining financing through a traditional mortgage broker or loan officer. In order to bring the least amount of money to closing, you would need to obtain financing from FHA, which (luckily) is possible on HUD homes. HUD does not provide direct financing to buyers of HUD Homes, so if you need to get qualified for an FHA loan (or any other type) just CONTACT US and we will get back to you as soon as possible.

WHERE CAN I LEARN MORE ABOUT HUD PROPERTIES?

Luckily, any single family residence available that is acquired by HUD will display a sign that should identify the company who is listing the property. You can also see internet listings HERE.

How to Find Foreclosures in Dallas-Fort Worth

2010-10-04T15:28:00.001-05:00

For the second straight month, the number of foreclosed properties across the United States jumped to a record level, according to RealtyTrac.com. The total number of repossessions is estimated to be as high as 93,000 across the nation.

This is somewhat surprising, being that April was the first month in recent history where the number of foreclosures actually fell from the previous month. Long story short, this behavior is indicating somewhat that the overall number of foreclosed properties has peaked. Only time will tell, though.

BENEFITS OF BUYING FORECLOSURES

According to the National Association of Realtors, the typical discount received from purchasing a distressed or foreclosed property is on average around 15 percent. That’s amazing, as long as the condition of the property isn’t deplorable. Why does this matter? Generally, to receive financing for a home, the property has to meet certain conditions and requirements in regard to its physical state. Bad roofs, wiring or plumbing all represent types of defects that would make a property essentially “un-lendable.” So unless you are planning on paying with cash, you’re going to have to get an appraisal or in depth inspection to see if the property will meet lenders requirements of livability before you purchase.

DIFFERENCES BETWEEN BUYING A FORECLOSURE AND A TRADITIONAL PROPERTY

The main difference between buying a foreclosed property compared to a traditional home is that the home itself is owned by the bank, or lender. Luckily for you, banks are much more eager to sell their foreclosures as soon as possible in effort to save money on taxes or other operational costs associated with home ownership, or in their case, management.

Another difference you will notice is the actual loan application process. Even though legally you can work with any lender or loan officer you choose, often the bank who owns the house will require that you get pre-approved with their institution before they will accept your offer. Overall they just want to be doubly sure that you can afford the house before they sell it to you. Luckily though, you are still free to use any lender you choose once the process gets started.

Last of all, the bank who owns the house will likely require that you put more money down when you make an offer. Known as “earnest money,” this compensation is paid at the time of closing to show that you (as the buyer) are serious about following through with your contract. With foreclosed houses, you can expect to write a check for at least $500.

WHERE TO GET STARTED

Lucky for you, the process of buying a foreclosure starts the same place as a traditional home, which is getting pre-approved. As mentioned earlier, the bank wants to make absolutely certain that you can afford to make the payments on the house before they go into negotiations with you. They start by having a loan officer see how much you qualify for, as well as giving you estimates on closing costs or monthly payments so you know what to expect in regards to money issues. This is totally normal, and will preemptively make sure that you don’t get into a mortgage that you can’t afford.

So, if you have any questions about the foreclosure process or getting pre-approved, don’t hesitate to CONTACT US and we will get back to you as soon as possible.

All About HELOC's (How exciting!)

2010-10-04T15:27:00.001-05:00

One of the good things about having a mortgage is the ability it gives you to build up equity in your home. What's equity you ask? Well, you can click here or I can tell you really quick. Quite simply, equity is the amount of money you have already paid against the value of your home, and it is an easy value to determine with a little bit of math.

HOW TO DETERMINE YOUR EQUITY

The easiest way to find out how much equity you have in your home is to subtract the amount of your mortgage balance (look on your mortgage statement for UPB, Unpaid Principle Balance, or just Principle Balance) from the current value of your home. For example, if your home is worth $100,000 and you owe $40,000, then your equity is $60,000. In other words, as you pay down the principle on your mortgage, your equity increases inversely.

HOW DOES EQUITY WORK FOR YOU?

What makes equity special? Well, equity can actually work for you if you know how to do it. Many people borrow against it and use the money they take out to pay for things such as home improvements, investments, or even paying for a child's college tuition. Other people use the money to purchase additional properties and, in turn, make even more money. Nice.

Long story short, having a lot of equity in your property is a great thing, especially if you are all of a sudden in the need for cash. But how do you actually get the money out to pay for things? Well, that's where the HELOC comes into play.

HOW DOES A HELOC WORK?

Opening a HELOC (which stands for Home Equity Line of Credit) allows you to access the built up equity in your house for when you need a quick influx of cash (without having to refinance your entire mortgage). Let's say you fall and break your arm, or your daughter needs braces. Or maybe your car broke down and you need a few thousand dollars to pay for repairs. A HELOC can give you the cash you want (your cash) to pay for the things that NEED to be paid.

The HELOC you take out functions basically like a second mortgage on your home. Because of this, the interest rate you pay will be a little higher than that of your first mortgage. This is common, being that second mortgages are traditionally more risky from the point of view of the lender. Different factors can determine how much interest you pay, though. Quite simply, the rate you get is also mostly determined by the amount of equity you are cashing out. The more equity you take out, the higher your interest rate, and vice versa.

A LITTLE MORE INFO

Fortunately for you, there are quite a few different types of HELOCS available to you as a consumer and homeowner. Just like a traditional first mortgage, you can get a HELOC with a fixed or an adjustable rate. You can do it as a regular line of credit, or you can take out the entire amount in a lump sum. You can also do a bit of both. You can write checks from the HELOC (like a bank account) and some lenders will even grant you a debit or ATM card to use to make withdrawals too. You've got lots of options is what I'm saying.

In conclusion, whatever your particular needs may be, there is more than likely a HELOC out there for you. They can really help out in times of need, and the more people that are educated on their benefits the better.

If you would like to see if you qualify for a Home Equity Line of Credit, don't hesitate to CONTACT US and we will get back to you as soon as possible.

FNMA Won't Secure Loans On Foreclosed Properties Still In Redemption Period

2010-10-04T15:26:00.000-05:00

On May 27th, FNMA released a new guideline that will make it a bit harder for people to purchase foreclosed properties. The new rule states that FNMA will not buy or accept a loan on a foreclosed home that is still in its "redemption period," the length of which is specified by each particular state. For example, the redemption period in California is 12 MONTHS LONG. Wow.

WHAT DOES THIS MEAN?

Long story short, certain states have laws on the books that provide tenants with a "redemption period" that starts after a foreclosure or tax sale has occurred. During this time period the tenant or owner can reclaim title/ownership to the property if they pay all the amounts they owe. This new rule mandates that the house cannot be sold to FNMA during this time period. How are they doing this? Well, FNMA is declaring houses that are still in the redemption period to be specified as having "unacceptable title defects."

Furthermore, any loan with an unacceptable title defect is deemed ineligible for delivery or sale to FNMA until after the redemption period has officially expired. Whew.

FYI, loans are still ineligible for delivery to FNMA if you purchase additional insurance or a redemption bond. Nice try, though.

WHAT ABOUT TEXAS AND DFW?

Luckily, (for our sake) Texas doesn't have an officially mandated redemption period we have to follow. This means that FNMA will still buy and deliver loans that were recently foreclosed here. That being said, if you are planning on relocating from the Metroplex to out of state (and looking to purchase a foreclosure) it would be worth researching how long exactly the redemption period is for where you're moving. CLICK HERE for a list of each State and its applicable laws regarding foreclosure.

HOW DO I GET AROUND THIS NEW LAW?

The best way to bypass this requirement is to get a home loan with either FHA, VA or even Freddie Mac, for as of now they haven't adopted any new guidelines regarding the redemption period. This could change though, so we will keep you posted if we hear anything.

In the meantime, if you have questions about the foreclosure process, or even just getting pre-approved for a home loan, don't hesitate to CONTACT US and we will get back to you as soon as possible.

Now Is The Time To Refinance In DFW

2010-10-04T15:25:00.000-05:00

I know I mentioned this last week, but it really is worth noting another time that interest rates here in DFW are at record lows. So, actually how low are we talking? Well, some people are claiming that this is the lowest we've seen rates in over 30 years. That's right, 30 years. To top it off, just last month home sales went up almost 8%, and the average home price also increased in the amount of 4% from last year. Obviously this change is being driven by something, but what exactly is it?

CONTRIBUTING FACTORS TO HOME SALES

The most obvious answer to this question would be the ever popular $8000 tax credit, which actually expired earlier this year. Experts agree that this credit pushed first time homebuyers into purchasing a home before the credit was gone. In order to qualify, buyers had to sign their real estate contracts by April 30 -- and they still have to close on their home by the end of this month, June 30th. So we could still see figures rise as we reach the full expiration of the tax credit.

CONTRIBUTING FACTORS TO LOW INTEREST RATES IN DALLAS-FORT WORTH

Would you believe that the financial status of Europe would have an effect on your interest rate? Well it does, as surprising as that may seem. Experts claim that the overall financial ailment in Europe is actually providing unexpected benefits to the United States economy, as foreign investors are putting more of their money into our Treasury Bonds (which are historically a safe haven when it comes to investing). Long story short, treasury bonds are directly related to mortgage interest rates, and this burgeoning demand has driven up the price of bonds, and inversely, interest rates.

WHAT DOES ALL THIS MEAN FOR YOU?

Overall, this means that if your interest rate is over 6% it might be a good time to refinance your loan and get a lower payment. This can save you a substantial amount of money over the long run. The easiest way to find out if a refinance would benefit you is to determine what is known as the "BREAK EVEN POINT."

HOW TO DETERMINE YOUR BREAK EVEN POINT

The easiest way to find out if you should refinance is to take your closing costs (everything you need to pay to actually do the refinance) and divide it by amount of money you will be saving each month with your new lower payment. The end result of this will represent the number of months you will need to stay living in your home in order for the refinancing to make sense financially. If it takes you 5 years to make up the savings, but you don't plan on living there more than 3, then the refinance doesn't make sense, and vice-versa!

If you would like us to do a FREE BREAK EVEN ANALYSIS don't hesitate to CONTACT US and we will get back to you as soon as possible.

Interest Rates in DFW at Record Lows

2010-10-04T15:24:00.000-05:00

As a loan officer, I hate it when I hear commercials on the radio every day blabbing about how low interest rates are, knowing that these companies are really just using the old "bait and switch" technique through their advertising. The truth is, you're not going to get a ridiculously low rate unless you have very perfect credit or if you pay for it (doing a "buy down"). The rest of the United States gets a more average rate, which just happens to be VERY low right now.

WHY RIGHT NOW?

These low rates can be attributed to stock prices falling, which in turn made more people start purchasing treasury bonds (which is what investors do when they need a safer place to put their money). The result are rates that are dipping extremely low for almost anyone with a solid job and a credit score over 640.

HOW LOW?

For example, Freddie Mac reported in their latest report that the average interest rate for 30-year fixed mortgages was 4.84 percent, which is easily the lowest its been all year. As for 15-year fixed mortgages, the average is 4.24 percent, which is the lowest it's been since 1991, which is when they initially tracking this type of data. WOW.

What's surprising is that this is the exact opposite of what everyone was predicting a couple of months ago when the FED stopped purchasing mortgage-backed securities. Some "experts" even claimed that we would see rates jump as high as 10%, which LUCKILY didn't (or hasn't) happened.

WHATS NEXT?

So what exactly is the point of all this? Well, obviously, lower rates make it MUCH cheaper to purchase a house, and you can save literally thousands of dollars over the life of your loan. Furthermore, it actually IS a great time to buy a house right now!

If you would like to get a free rate quote, or if you would just like some information about getting a home loan, don't hesitate to CONTACT US and we will get back to you as soon as possible.

What Lenders Look for When You Want A Loan

2010-10-04T15:22:00.000-05:00

In order to avoid the perception of bias (based on discrimination) most banks and lenders these days use creditworthiness to determine if you qualify for a home loan. Of course, that doesn't mean having a good credit score automatically gets you a loan. It is, in fact, a big piece of the puzzle, but to get a totally clear approval you will need several other things in order as well. Here they are:

TOTAL DEBT CANNOT BE TOO EXCESSIVE

When a loan officer runs your information to get you pre-approved, one of the first things they get from your credit report are your total debts and anything else you are obligated to pay each month. They then factor this with your proposed monthly PITI payment (Principle, Interest, Taxes, Insurance) to get what is known as the "Debt-To-Income" ratio. This ratio represents how much you will be paying each month compared to how much money you actually bring in. Your total payments (including credit cards, student loans, car payments etc.) should not exceed more than thirty-six percent of your income.

APPRAISAL

When you get a loan, the note itself is secured by the actual property you buy. This means that if you don't pay your mortgage the bank can foreclose on you. In order to insure that the house is actually worth what you paid, the bank will order an accurate appraisal, which insures to them that they can again sell the property for the same price if this happens.

RESERVES

Lenders will often look at how much money you have in your bank account at the time you are requesting a home loan. This shows to them that you can still afford to make a payment if you end up losing your job or not making any money in a particular month. Reserves can include retirement funds or even a 401k savings plan.

PMI

PMI, which is Private Mortgage Insurance, protects the lender in case you default. This means that a portion of your monthly payment will go directly to the bank as insurance. In essence it really doesn't help you at all, and you can't ever get it back. Luckily, though, PMI goes away when you reach 20% of your total principle. (PMI is not included in your loan if you put at least 20% down)

DOWN PAYMENT

You can't make a down payment for a home loan with someone else's money, a credit card, or another loan. If you are interested in doing an FHA loan, you are guaranteed to pay at least 3.5% of the sales price as a down payment. So if you are looking to get a mortgage for $100,000 you can expect to need at least $3500 to close. That being said, there are also other closing costs that you can expect to bring as well. The point being, don't expect to get a mortgage for free these days, because it just isn't going to happen.

GOOD OVERALL CREDIT (FICO SCORE)

As mentioned earlier, the most important thing to consider when getting pre-approved for a loan is your credit score. A high FICO score will entitle you to the lowest rates, a mid level score will entitle you to average rates and a poor score will disqualify you from getting a mortgage at all in many cases. Don't worry though, as credit repair specialists can help you out to get your score up in most cases.

Lenders will verify everything aforementioned, including a re-verification of your employment before they allow you to close. It all may seem a little excessive, but it's just what happens and there is no way around it unless you have the capability to pay for the whole house in cash.

So, if you have any questions about getting pre-approved or need information about getting your credit score up legitimately, don't hesitate to CONTACT US and we will get back to you as soon as possible.

How to Get the Lowest Possible Interest Rate in DFW

2010-10-04T15:20:00.000-05:00

One of the most important aspects of obtaining a home loan or mortgage is getting the lowest possible interest rate. Society has driven it into our heads that this in itself is paramount to anything else, including the actual house you are buying. In fact, whenever I’m doing a loan for someone, literally the first thing they always ask me is “what are rates looking like today?” People want to know how much they’re going to pay, and how this will affect their livelihood.

So if you’re in the market for a new home and you are concerned about this, there are a few things you should know before you get too preoccupied with your interest rate.

IMPORTANT INFO ABOUT RATES

First of all, mortgage rates change, and they change VERY OFTEN. How often? Well, last month lenders were re-pricing (changing rates) at an average of every 4 hours. That’s right. EVERY 4 HOURS. Remember too that this is just an average, and many times rates have been known to change every 30 minutes or so. So when your loan officer seems reluctant to speak with you about interest rates, it isn’t because he is trying to mess you over. More than likely he is just scared to quote you something just to see it change an hour later. After all, getting a "great mortgage rate" could end up saving you 1/8 % on your rate and consequently a couple hundred dollars in fees.

So what do most people do to “get the lowest rate?” Society will tell you that the best way to achieve this is to “shop around” and get offers from multiple loan officers. While in theory this is an excellent idea and supposed to make the process easier, the truth of the matter is that it doesn’t work perfectly. At least not the way you want it to.

Why not? Well, as I mentioned before, while you're trying to figure out which loan is cheapest, or most appropriate, or has the lowest costs, mortgage rates are moving, and they are moving ALWAYS. Furthermore, being that getting offers from different loan officers can take a week, rates can be totally different even a day later than when you started. So, timing is everything with this.

RECOMMENDATIONS

So what do we recommend? How do you get this lowest rate and still not feel like you’re getting the run around? Well, the best thing you can do is get your shopping done early in the process, because the truth is, most loan officers have access to the same rates. The better info you give them, whether it be about yourself, the home you desire, or how much you want to pay each month, the better than can serve you.

By doing this you will get a good feel of which individual you want to work with, and you will learn a lot in the process of potential rates and closing costs. Some loan officers won’t return your calls, some will give you inflated estimates, and some will even tell you they can’t help you out. These are the folks you need to weed out.

In the end you should be able to decide who you want to work with, and who can serve you the best.

The one you chose should be able to keep you informed about financial trends, and by planning accordingly, they can time your rate lock to when you desire to close, in turn getting you the best rate possible!

DON'T BE AFRAID TO GET YOUR CREDIT PULLED

Oh and one last thing, one of the biggest deciding factors for loan officers when shopping your rate is your credit score. The higher your score, the better chance you have of getting a lower rate, and vice versa. So be honest with the person you are working with, and don’t resist if they want to pull your credit.

Luckily, a formal credit pull by a loan officer working for a mortgage company is treated completely different than if you are applying to get 15% off your first purchase at The Gap. Also, unlike applying for store credit cards, applying for multiple mortgage quotes won't count as multiple, consumer-initiated inquiries, which is a good thing.

So, if you’re interested in getting a mortgage quote, don’t hesitate to CONTACT US and we will get back to you as soon as possible. It always helps to work with someone who is knowledgeable, and at the same time honest.

- Pate

203K Streamline - The Loan of the Future (and Fort Worth)?

2010-10-04T15:18:00.001-05:00

Searching diligently for a home? Have you passed over your dream property due to cosmetic problems because it won't pass with the FHA for financing? Well, look no further. FHA has came up with something to help you out. I introduce the 203K Streamline Loan, which was created in part due to the fact that many lenders won't do rehab loans anymore, and is much much simpler than the notorious 203K Loan (evidently the Streamline part is what makes the difference, haha).

This loan, in essence, allows a potential homeowner to finance up to $35,000 of needed home repairs into the purchase or refinance of a property. This is excellent compared to a traditional rehabilitation loan, because it doesn't include the same review requirements, and consequently involves much less paperwork. Here are some of the other benefits of the 203K-Streamline:

Needed repairs are figured into the original loan balance, resulting in one loan.
The mortgage balance can exceed the purchase price of the house.
Borrowers are not required to hire engineers, consultants or architects.
The home inspector or appraiser can put together a list of recommended repairs/improvements.

The program is designed to assist homeowners in easily rehabilitating a home where building consultants, engineers or architects are not required. This is a big difference compared to the regular 203K.

So you may be asking, what all repairs can be financed? Well, eligible improvements include roofs, HVAC systems, plumbing or electrical upgrades, flooring, minor kitchen or bathroom remodeling (not involving structural repairs), weatherization, replacing old appliances, lead-base paint stabilization, repairing or replacing exterior decks, patios and porches, basement finishing or remodeling (again with no major structural changes), replacing windows and doors, septic system repair or replacement, painting and minor cosmetic changes.

If you are interested in applying for a 203K Streamline Loan, please don't hesitate to CONTACT US and we will get back to you as soon as possible. We can help you find a house and make the whole process as simple as possible!

Reverse Mortgage Situations and Applications

2010-10-04T15:17:00.000-05:00

Reverse Mortgages, which are becoming more and more prevalent in today's society, definitely have their fair share of both advocates and critics. Because of this, many people are often misinformed about how exactly a reverse mortgage could be of benefit to them. As is usually the case in life, it is better to be educated about something before you decide for or against it.

This week, we once again meet with our resident Reverse Mortgage expert Bruce Parris, who shows us a few situations where these types of mortgages may be of benefit to senior citizens.

Bruce Parris

Mortgage Advisor

817-527-3165 office

1-866-205-2305 toll free

214-783-2235 cell

Hello folks, today let’s talk about a couple of situations I have found some of my clients in where a Reverse Mortgage helped them out substantially.

A spouse passes away. The home has a $250,000 value and an $80,000 mortgage with a $625 monthly payment. You want to stay in the home but your monthly income comes up short. You could sell the house but you would still need somewhere to live.

Here’s a possible answer: At 70 years old you take out a Tax Free* Reverse Mortgage. The proceeds pay off your existing mortgage giving you an increase in monthly income of $625. Plus you have a lump sum of $64,112 in tax free money that can be used anyway you want.

This couple is both 65 years old. They have a home worth $700,000 with no mortgage. They have sufficient income to live the life they enjoy. They now have grand kids ready for college. They would like to have a way to help out but there monthly income is not enough for what they would like to do.

Here’s a possible answer: They take out a Tax Free* Reverse Mortgage which nets them $344,533 tax free dollars. They each can now give a monetary gift to the grand children each year. Tax law determines the amount they can give each year.

Every situation is unique to the individuals involved. Contact me for a no charge no obligation evaluation of your situation.

*Check with a tax advisor to verify current tax laws.

Reverse Mortgage proceeds are based on the current interest rates at the time of closing, the age of the youngest borrower and the appraised value of the home. These examples based on an interest rate of 5.49%

As always, if you have any questions about Reverse Mortgages (or any type of home loan for that matter) please don't hesitate to CONTACT US and we will get back to you immediately.

Reverse Mortgages - JUST THE FACTS

2010-10-04T15:14:00.000-05:00

This week we are joined again by our reverse mortgage specialist, Bruce Parris, who answers some of the most basic and controversial questions about Reverse Mortgages. Enjoy!

Bruce Parris

817-527-3165

1-866-205-2305 toll free

What is a reverse mortgage?
Reverse mortgages are FHA-Insured loans on the equity in your home, but you never pay it back as long as you live in your home, so no monthly payments.

Who qualifies?
Anyone 62 years of age who owns a home may qualify.

Does the home have to be paid off already?
No. Many people use a reverse mortgage to pay off an existing mortgage.

How much money will I receive?
An appraiser will come to your home to determine the market value of your home. Most clients will receive 40% to 75% of the appraised value of their home or the lending limit, (currently $625,500) set by the FHA, whichever is less.

Is there a tax advantage?
Yes. When you take out a reverse mortgage the proceeds are non taxable income. No income tax is due. If you take money out of your retirement funds that money is taxable. So a reverse mortgage provides a life style change with no effect on your income taxes.

How long does it take to receive the money?
Normally it takes 4 to 6 weeks to complete a reverse mortgage.

How do I receive the money from the reverse mortgage?
You can receive the money in several ways. In a lump sum or in monthly payments for as long as you live in your home. You can take out part of the money with the rest in monthly payments. Or you can leave it in a line of credit to use as needed.

What is a line of credit?
A line of credit allows you to withdraw money from the bank whenever you wish, in whatever amounts you wish, with a minimum withdrawal of $500. The money you can access in the account grows, similar to a savings account. When you pass away, whatever is left in the account is not required to be paid back. Only the amount you withdraw is part of the reverse mortgage.

What about closing cost?
There are closing costs, which have been drastically reduced this year. These costs can be rolled in to the mortgage so you do not pay them out of pocket.

How is a reverse mortgage paid back?
After you pass away, the home is left to your heirs. They can either sell the home, which pays off the reverse mortgage with any remaining money returned to the estate. Or, if they want to keep the home, they can pay off or refinance the amount owed.

Will any money be left in the home for my heirs when I pass away?
There should be money left for them. The reason the reverse mortgage only pays you from 40% to 75% of the home value is because the program is set up to so there will be plenty of equity left in the home for your heirs when you pass away.

So does the equity grow in my home after I take out a reverse mortgage?
Yes. In most cases the interest on the reverse mortgage will be less than the increase in your homes appraised value over a period of years.

If my home loses value, and is worth less than the reverse mortgage when I pass away, will my heirs have to pay the balance?
No. The FHA insurance insures that the home will never be upside down to your heirs. The bank can only get the sale price of the home or what they are actually owed whichever is less.

If I pass away first, does my spouse have to sell the home?
No. Not as long as both of you signed as borrowers and they are still living in the home.

How does the bank make their money?
They make their money on the interest which gradually accumulates on the loan.

Do my heirs have to sell the home immediately after I pass away?
No. The bank gives your heirs up to a year to sell the home.

How can I be sure the bank won’t try to take away my home from me?
The reverse mortgage is a government-run program, so it is insured by the FHA to make sure that the mortgage never changes, and that neither you, nor your heirs, will ever get stuck paying a bill.

Can I get a reverse mortgage on a rental home?
No. A reverse mortgage can only be taken out on your homestead property.

Will I continue to pay for my homeowner’s insurance and taxes?
Yes. Those will still be your responsibilities.

Can I ever sell my home?
Yes. You can sell your home at any time. You would simply sell your home for the market value, this will pay off the reverse mortgage, and you will receive the remaining equity. So, in essence, it would be as if you are receiving some of the money out of your home now by using a reverse mortgage, and you will receive the remaining home equity when you sell the home, if you choose to sell.

If my home needs repairs will I need to fix my home before getting a reverse mortgage?
No. The appraiser will determine if any FHA required repairs will be needed in your home. Cosmetic repairs are not of any concern to the FHA. If a repair is needed, you will simply have to provide an estimate to us, and the work can usually be done after you receive your money. The bank will put aside some money, out of the proceeds, for the repairs so they can pay the repairman after he finishes the job. This helps so you won’t have to pay any money out of pocket for repairs.

How long have Reverse Mortgages been in existence?
Reverse mortgages became a government-run program in 1989. Since them they have gained in popularity as people learn the facts.

Can I receive more money from an equity loan?
Possibly, if you qualify; however, you will have a monthly mortgage payment. Also, many senior citizens don’t qualify for an equity loan, at least not a large equity loan, because of fixed incomes and credit issues. Anyone at least 62 years old, who is considering an equity loan, should really take out a reverse mortgage, which is an equity loan that never requires a monthly payment.

So, I receive between 40% to 75% of my home’s appraised value; I can live in my home for the rest of my life; I make no house payments; I pay no income tax on the reverse mortgage proceeds; and my children can inherit my home? This sounds too good to be true. Are there any drawbacks to a reverse mortgage?

Not to senior citizens. Your heirs will not receive the total value of your home when you pass away because the mortgage will have to be paid when you pass away. That would also be true if you have a conventional mortgage.

If you have any questions about reverse mortgages (or any type of mortgage for that matter) don't hesitate to CONTACT US and we will get back to you ASAP!!!!!

Safety Tips and Useful Technology for Seniors

2010-10-04T15:12:00.000-05:00

This week we are joined by our Reverse Mortgage Specialist Bruce Parris, who offers some useful safety tips and technology for Senior Citizens. Enjoy!

USEFUL TECHNOLOGY FOR SENIORS

I just wanted to share some good information I found about some fantastic new products for senior citizens. As seniors are living longer and longer these days, it makes sense that there are new technologies being created to help enhance and support independence.

PRESTO - Presto is a service that does not require a computer to use, but allows you to print email messages or photos to your own special printer. If you want to learn about what's going on in your childrens, grandchildrens, or friends' lives, then Presto is great. Just ask your son or daughter about it, or you can always visit www.presto.com for more details!
Skype - Skype is a free phone service with video capabilities that makes calls through use of your computer. This means that free calls can be with anyone in the world as long as you both have the free program loaded on your computer. My daugher recently lived in London and on our computer screen we were able to see our five year old grandson pull his first baby tooth. We shared his joy about his first upcoming visit from the tooth fairy. All you need is a computer with a web cam (most new computers have them built in) or you can purchase one and attach it to your computer). With Skype you can see your grandchildren while you talk to them. Just download the program for free at www.skype.com
Jitterbug - Jitterbug is a call phone designed specifically for seniors with a large LCD screen, a large keypad, and a low monthly fee. Check it out at www.jitterbug.com.

SAFETY TIPS FOR SENIORS

Safety is one of the biggest concerns for seniors and their children or caregivers. Here are a few safety precautions that will help make your home a safer place:

Clear your floors of all small objects such as bathroom scales or doorstops, to reduce the risk of slipping or tripping.
Remove throw rugs.
Install additional cordless phone to avoid tripping over long extension cords.
Avoid wearing loose or floppy slippers or shoes.
Check all stairs and thresholds for loose hardware or carpet.
Since most falls occur on the bottom step of stairs, make that step highly visible by painting it a different color or ensuring that it is well lit.
Hole onto railings, or install railings if you don't have them already.
Keep a lamp beside your bed so you don't stumble in the dark.
To prevent dizziness when you first get out of bed, sit and dangle your feet for a moment before standing up.
Use electric heating pads with caution; you may misjudge the heat.
Check the bathroom. Put adhesive-backed rubber strips in the tub or shower to prevent slipping. Buy soap on a cord and hang it around the faucet or your neck.
In the kitchen, do not reach across a hot burner.
Have a large, easy-to-read list of emergency numbers, including fire, police, relatives and friends, near the telephone.

Well, that's all for now. Until next time don't forget to stop and smell the roses!
- Bruce Parris - Reverse Mortgage Advisor - 214.783.2235
If you have any questions about reverse mortgages, or if there is any way we can help you in your home search, please don't hesitate to CONTACT US and we will get back to you asap!

Down Payment Assistance Program for Fort Worth Residents

2010-10-04T15:10:00.001-05:00

The Neighborhood Stabilization Down Payment Assistance Program is offering up to offers $25,000 in assistance to future Fort Worth residents. That’s right. $25,000. And out of that amount, $5,000 can be used on your closing costs and $5,000 can be used on doing minor repairs. Any remaining amount can be used by you for your down payment.

All of this is funded by the US Department of Housing and Urban Development (or HUD) in an effort to provide financial assistance to qualified homebuyers to purchase lender-foreclosed homes with the City of Fort Worth in specific target areas. Which areas? Well I’m glad you asked. Here they are:

76131
76133
76123
76112
76179
76248
71637

Obviously the HUD isn’t going to just give this money away to anyone who asks, so there are some qualifying factors you must take into consideration when applying.

First of all, income is the main thing the HUD will want to know when you fill out your application. The limits are set in advance by HUD, so conversely, your income cannot exceed their parameters in order to qualify. For example, the maximum allowable household income for a family of 4 is $72,900. For 5 people it jumps to $85,500.

Secondly, the property you find must be located in the city limits of Fort Worth, and you must occupy it as your primary residence. So in other words, no investment properties or second homes are eligible for down payment assistance.

So how does the program work? Basically, eligible homebuyers will receive a deferred-payment loan with no interest or payments at all for 10 years. The only stipulation? You have to stay in the house for 10 years.

After this time period has expired the loan is forgiven. It is also worth noting, though, that the amount of the deferred-payment loan begins to reduce after five years, so you won’t have to pay back the entire amount if you end up having to move out of the house after 6 or 7 years.

If you are interested in seeing if you qualify for the program, don’t hesitate to CONTACT US and we will review your situation. If you would like to review the requirements yourself, just visit Fort Worth's Homepage for more details.

Get 50% off Your Home Purchase With The Good Neighbor Next Door Program

2010-10-04T15:09:00.000-05:00

Are you a teacher, law enforcement officer, firefighter or emergency medical technician in Dallas or Fort Worth? Are you looking to buy a house? Want to save 50% on it? That's right, I said 50%.

Well right now this is actually a possibility, due to the Department of Housing and Urban Development’s “Good Neighbor Next Door Program.”

Long story short, the HUD is offering half off a home mortgage if you are in one of the previously mentioned fields and find a property that falls into one of the designated geographic areas authorized by Congress under provisions of the National Housing Act.

Why would they do this? Basically, HUD desires to make the communities of America stronger and safer, and improve the quality of life in distressed urban communities by encouraging Law Enforcement Officers, Teachers (pre-Kindergarten through 12^th grade), Firefighters, and Emergency Responders (EMT) to purchase and live in homes in these communities.

In return for the 50% discount, you must only prove once a year that you occupy the property as your primary residence. You must do this for a total of 36 months. In other words, as long as you live in the house for 3 years you never have to pay the other half of the mortgage! It’s that easy.

How does the discount work? Well, when you purchase the house, you will be required to sign a second mortgage for the other half of the loan. As long as you stay in the house for the requisite 3 years the second mortgage is wiped away after that time period.

You can even refinance the mortgage down the road if it happens to be to get a lower rate or even to make repairs (203k loan).

Want to find out if you qualify for this type of loan? Are you interested in seeing which properties qualify as a designated geographic area? Feel free to CONTACT US and we will get back to you as soon as possible.

How to Sell Your House Without a Realtor

2010-10-04T15:01:00.000-05:00

Selling your house without a realtor is an evolving trend these days. Why? Well, mostly this has to do with the whopping 6% real estate fee most real estate agents charge for listing and selling your house. That’s right,

I said 6%. Take that 6%, add it to the already substantial closing costs or seller concessions you may be paying, and you’ve essentially lost a large chunk of change that you could otherwise be putting into the bank.

So why don’t more people sell their house on their own? Well, society and popular opinion will tell you that it’s a difficult, if not impossible process. For example, a simple internet search of “selling your house without a realtor” will pull up such alarming claims as:

“Without a knowledgeable Realtor to guide you through the process, you'll have to hone your knowledge of the housing market in your area, lending practices, loan availability and requirements for a home sale. You'll need to brush up your negotiation and people skills and clear time in your schedule to be available to show your house…”

After reading such claims, it’s easy to think that you should just go ahead, give up and use a realtor instead of dealing with such drama. Fortunately this isn’t so. The truth is, selling a home by yourself can be both easy and cost effective……if you have the right tools.

WHERE DO YOU START?

So how do you get the right tools? The answer is Nationwide By Owner, or NWBO. NWBO was formed to help individuals generate the exposure needed to effectively sell their homes without a realtor. Since then, it has helped literally thousands accomplish this feat, all without paying out expensive real estate commissions. In fact, NWBO charges only $399 for their whole package. For that amount here’s what you get:

A personalized web page to showcase your home.
A Brilliant Yellow Sign with an Audio Tour for interested buyers.
A FREE Interactive Tutorial to answer common questions about selling your own home.
Nationwide exposure 24/7.
Prominent Search Engine Placement to attract active buyers to your listing.
A team of experts to provide on-call professional help.
A Virtual Web Office™ with 24/7 live email notification.
Most Importantly - NO commission fees - Just one low price of $399!

So feel free to call NWBO at 1-866-205-2306, or visit their homepage for more info. After all, you don't use a travel agent to book business trips or vacations anymore, so why would yo

How to Estimate Your Payments Using Mortgage Loan Calculators

2010-10-04T14:58:00.000-05:00

This week, our guest blogger Jennifer tells us the benefits of using mortgage calculators when considering a home loan. Enjoy!

Online mortgage calculators will help you in planning and acquiring a home loan for your dream home. These loan mortgage calculators are user-friendly tools which will help you in knowing your monthly payments, interest rates, pay-off dates, amortization schedule, etc. Have a look at the top 5 mortgage calculators:

Home affordability calculator: This loan mortgage calculator will give you an idea about the loan amount that you can afford to buy a house. You’ll have to mention the required loan amount, interest rate, time period, etc to determine your monthly payments and required income.

APR calculator: You will be able to calculate the annual percentage rate on your mortgage and get an amortization sheet of your monthly payments by using this calculator. You need to enter your interest rate, loan term, mortgage amount and additional costs to calculate APR. The additional costs would include the fees that you pay at the closing.

Refinance calculator: You can use this calculator to find out how much you can save by refinancing your mortgage at a lower rate. This calculator will let you know your payment after refinance, break-even period, interest that you save, etc. Thus, you’ll be able to know the minimum time-period that you need to stay in the property to recover the closing costs.

Bi-weekly monthly payment calculator: This calculator will let you know the amount that you’ll save on interest if you make bi-weekly payments and not monthly payment. You’ll have to enter the loan amount, monthly payment and mortgage rates to get a comparison of the two.

Qualifying loan calculator: If you want to know the maximum amount for which you can qualify, check out this calculator. Here, you’ll get an amortization sheet showing your entire payment schedule. It will help you know the qualifying loan amount, property tax payments, private mortgage insurance, etc.

Using the online loan mortgage calculators will help you make the right decision regarding your home loan. These calculators will make it easier for you to calculate your payments thereby helping you know whether or not you can afford a loan. You can use the following for some of the calculation.

By Mortgagefit Community

90 Day Flipping Rule Suspended For One Year!

2010-10-04T14:54:00.000-05:00

Great news for investors! Admitting that it is in fact possible to buy, rehab, and sell a property in less than 90 days, the Federal Housing Administration (FHA) has suspended it's infamous 90 day seasoning requirement! This is also great news for home buyers, as this suspension should effectively allow quite a few more houses onto the market that otherwise would be just "seasoning" (aka sitting) on the market for 90 days.

Before we get into this too deep, lets first get an idea of what this seasoning requirement originally entailed. Basically, since 2003, the FHA has required that a house is "seasoned" on the market for 90 days before it is allowed to be resold. This means that an investor or any other person who purchased a property had to wait for approximately 3 months before they were allowed to sell the house to an FHA insured buyer.

More than anything, this was done to prevent people from buying a house and immediately selling it at an inflated price to a naive or uninformed buyer. Luckily, over the past several years, most of the riff raff has been weeded out of the market, and this type of practice isn't as widespread, or even really possible (as you will see from the rest of this article).

So, this is obviously good news for investors, but why is it good for home buyers? Well, per the official waiver:

"...the 90-day resale restriction often hinders community stablization and revitalization." They also said:

"FHA borrower, because of the restrictions we are now lifting, have often been shut out from buying affordable properties. This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity."

Basically what this means is that more houses will be put on the market that were otherwise just sitting there collecting dust. Consequentally, this presents more options for people looking for the perfect house!

BUUUUUUT......before you get too excited, it should be noted that there are several specific nuances to the waiver that investors and homebuyers alike should both be aware of.

4 IMPORTANT POINTS TO CONSIDER

1. Seller MUST Hold Title
In other words, the person who is selling the house must legally and officially own the property, and thus, be on title. In fact, FHA will expect to see the investor/seller as the owner of record as of the date the contract to sell to the FHA buyer is executed. Long story short, no more back to back, same day closes to FHA end buyers. Sorry.

2. You Still Need Short Term Funding
Basically what this means is that if the property doesnt sell immediately you need to be financially able to make the payments. Be prepared to come up with short term funding for however long it takes to sell the house. Luckily, in most cases, it is easier to find 30-60 day financing compared to 90.

3. Is There A Flipping Pattern?
This is an easy step. FHA mainly wants to know that the subject property doesn't display a history or pattern of previous flipping activity. You can go and check the title from last year to see if the property has changed hands very often. Best case scenario would be not at all.

4. The 20% Rule
If the sales price exceeds 20% of the previous purchase price, you will have to show proof that you actually made repairs making the property worth that much more. This is done to ensure the sale is legitimate, and can include a full FHA inspection, or even a second appraisal. The best way to combat this is to simply take accurate records as proof of what you did to enhance the value of the property. Take plenty of before/after pictures, document the entire process, and you should be fine.

Other Important Points:
- All transactions must be arms-length
- Assignments of a contract for sale will trigger a red flag. No taking over deeds for people.

LONG STORY SHORT, KEEP IT CLEAN AND STRAIGHTFORWARD!

The better documented your case, the better chance you have of the process going smoothly. As always, if you have any questions please don't hesitate to CONTACT US and we will reply to your query as soon as possible. I also urge you to read the original waiver from the FHA regarding the subject matter:
FHA WAIVER

USDA Rural Development Loans Offer 100% Financing For Surrounding Areas of DFW

2010-10-04T14:52:00.000-05:00

Over the past several years, the Government and the Mortgage Industry as a whole has continuously tightened the rules and regulations when it comes to buying a home. It has gotten to the point where even people with stellar credit and a solid borrowing history still need a hefty down payment before they can purchase a new house.

Fortunately though, there is a new program available from the United States Department of Agriculture that offers 100% financing for people that live (or are looking to live) in rural areas.

Why would they do this? Is it too good to be true? Well, long story short, the government offers the option of “zero money down” so that people who live in rural areas (who may have always been renters) can finally have access to affordable mortgages. Consequently, this type of loan is often the best scenario for people who live in the country and want to find a place they can call home.

Another amazing feature of this loan is that 100% of repairs that need to be made to the property can actually be finance into the loan based on “after repair value.” What this means is that the USDA Rural Development Loan can also be considered a renovation loan as well. Because of all these qualities, these loans are quite possibly the best option on the market today.

So you may be asking, what features does this type of financing entail? What can I do to make this work for ME? Well, here are some of the benefits of the USDA Rural Development Loan:

- NOT ONLY FOR FIRST TIME HOME BUYERS - This isn't like the tax credit!

- LOW INTEREST RATES - Just because you are getting a good deal doesn't mean you will pay more over the long run. Rates on these loans are generally better than VA and similar to FHA.

- NO PMI (MORTGAGE INSURANCE) - This makes your monthly payment even lower.

- NO LIMIT ON PURCHASE PRICE - Buy what you want! (Property must still be reasonable for your income)

- NO MINIMUM FICO SCORE- People that have zero credit history may even qualify. Those with a credit histoty should have a reasonably good score. Call for more details.

- SELLER CONCESSIONS UP TO 6% - What this means is that the person selling the house can pay for all or some of your closing costs, which saves you even more money.

- NO CASH RESERVES REQUIRED - Most loan programs require you to have a certain amount of money saved up before you can purchase a home. This is not the case with the USDA Rural Development Loan.

- 100% FINANCING!!! - NO DOWN PAYMENT IS REQUIRED. That’s right. NO DOWN PAYMENT.

So next is the issue of actually qualifying for the loan. Here’s what you need to do, and some of the main requirements involved:

- You must be a legal US citizen or legal permanent resident.
- Your income must qualify for the house or property you desire. As a point of reference, your mortgage payment should not exceed 29% of your gross monthly income.
- The property must be used as a residence (no farms or commerical deals).
- You can’t already own a suitable residence in the same area as your proposed new property.
- Your total family income should not be more than 115% of the median United States income.

Probably the biggest requirement for this type of loan is that the property MUST be in a qualified rural area. What constitutes a qualified rural area? Well, mostly this has to do with Income and Population Density restrictions, but you may be surprised to find out just how many areas around Dallas and Fort Worth in fact qualify. As always, you can CONTACT US and we will review your situation and see if you (or a house you desire) qualifies. (free of charge too!)

Getting Pre-Qualified for a Mortgage

2010-10-04T14:49:00.001-05:00

Getting yourself pre-qualified for a mortgage is a relatively simple process. It can be achieved as easily as contacting a loan officer and having them take down some general questions about your income, employment, and monthly expenses.

Once the loan officer has this information from you they will run your credit and and make an estimate of approximately home much money you can afford to borrow at the current interest rates.

After this is done you will get a "prequal letter" that will have this amount indicated on it. Prequal letters are often given to realtors as a a form of good faith because they show that a borrower can in fact afford a house payment of a certain amount.

This way a realtor will know what price range of houses to show a borrower, and they also know that the borrower is working with a loan officer, and thus serious about finding a home.

Another benefit of getting pre-qualified is that it makes you much more desirable to someone who is selling their home. When there are multiple offers on a particular property, a seller will be much more inclined to go with a buyer who has already been pre-qualified, because by having already proved your creditworthiness you are a lesser risk than someone who has not! It makes perfect sense!

So if you are interested in getting prequalified, or if you have any questions about finding a home in the DFW area don't hesitate to CONTACT US and we will do everything we can to make it happen.

All About Reverse Mortgages

2010-10-04T14:48:00.000-05:00

If you are over the age of 62 and you own a house, you have more than likely heard about a Reverse Mortgage. This is an interesting issue due to the fact that Reverse Mortgages are becoming extremely popular in America these days. Unfortunately, though, many people are afraid of this type of mortgage, which can be attributed to a lack of knowledge on the issue, or just because they may have been misinformed.

The truth is, a reverse mortgage can offer extremely beneficial assistance (monetarily) to a senior who may be out of options or who is just strapped for cash. But what exactly is a Reverse Mortgage? How do they work? What are the requirements for obtaining one? All of these questions will be answered in the following guide.

In the most basic sense, a reverse mortgage is a special type of loan that lets you convert a portion of the equity in your home into cash. What this means is, the money you have built up over the years by making home mortgage payments can essentially be paid back to you. This is different than a traditional cash-out refinance or home equity loan because there is no repayment required until you no longer use the home as your primary residence. You can even choose whether to be paid all at once, in regular monthly advances, or in increments and amounts that you choose! Yippee!

To further explain, here are some of the most frequently asked questions and answers about Reverse Mortgages.

Who can qualify for a reverse mortgage?

Seniors 62 years of age or older may qualify. There are virtually no income limits or qualifications you need to meet (even in regard to your credit).

What kind of houses are eligible for a reverse mortgage?

The main establishing criteria for a reverse mortgage is making sure that the home in question is the borrowers primary residence (where you live most of the year). Primarily, reverse mortgages are taken on single family, one-unit homes. Some programs will also accept two-to-four unit buildings, as long as they are owner-occupied. Other programs even offer reverse mortgages on condominiums and manufactured homes, as long as they are built after June of 1976. Typically, mobile homes and cooperatives are not eligible for a reverse mortgage. Feel free to CONTACT US if you are interested in seeing if your home qualifies for a reverse mortgage.

What fees will I run into if I decide to get a reverse mortgage?

Typically a reverse mortgage will have an origination fee, third party closing costs (such as an appraisal, escrow fees, and title insurance), and a monthly servicing fee. Whats good, though, is that these charges can be paid from the proceeds you receive from the reverse mortgage, which results in no immediate burden to you as a borrower (the costs are added to the principal and paid with interest when the loan becomes due).

Is it true that if I got a reverse mortgage then the lender would end up owning my home?

This is definitely not true. Being as the borrower, you will still automatically retain the title to the property. The reverse mortgage lender is merely extending a loan to you. That being said, because you still retain title as a homeowner, you will remain responsible for paying such things as the hazard insurance, property taxes, and any maintenance required to keep the home in a livable condition.

Does how much money I make (or don't make) influence my ability to obtain a reverse mortgage?

No way! Since you won't be required to make a monthly mortgage payment, there are (hence) no income qualifications!

Can the bank take my home away if I outlive my reverse mortgage?

Absolutely not. Your loan isn't even due at that time either. In fact, as long as you or another borrower (ie spouse) continue to live in the house as your primary residence (and you keep current on your taxes and insurance), you won't need to repay the loan.

Are there any stipulations or requirements in regard to how I use the money I receive from a reverse mortgage?

Nope. You can you the money you receive for virtually anything under the sun (as long as you can afford it). This includes home improvements, health care expenses, vacations, groceries, etc, etc, etc. For many people, the funds received from a reverse mortgage are used to provide somewhat of a security blanket in case unexpected expenses arise.

I still owe money on my existing mortgage. Can I still get a reverse?

Of course. You may be eligible to receive a reverse mortgage even if you still owe money on a first or second mortgage. Actually, the funds you receive from the reverse can even be used to pay off whatever existing mortage you have!

What are the main advantages of getting a reverse mortgage?

There are many actually, but here are some of the most significant:

A reverse mortgage lets you keep your independence by allowing you to remain in your home and retain home ownership.
There are NO monthly mortgage payments required. You are not required to pay back the loan or make any monthly mortgage payments until you permanently move out of the home.
Tax-free money. Because the money you receive from a reverse mortgage is not considered income, it is tax free and will not affect your Social Security or the benefits you receive from Medicare.
Freedom and flexibility. You are free to use the money from a reverse mortgage in any way you choose or deem necessary.

Do you have a question or comment for us about Reverse Mortgages? Feel free to comment below or CONTACT US if you want to ask anything specific!

- Pate

All About Private Mortgage Insurance (PMI)

2010-10-04T14:45:00.000-05:00

If you find yourself in the market for a new home, it is obvious that you will need some money available to use as a down payment when you get to closing. As far as the industry goes, there is an age old adage that says a new home buyer should have at least 20% in reserves to pay when they get their new home. But why 20%? Isn't that a tad high?

Well, the reason for this is Private Mortgage Insurance, or PMI, and if it ends up that you are unable to make a down payment of at least 20% of the sale price, you'll be required to obtain private mortgage insurance from your lender. But what is PMI, and why are you paying for it?

In the most basic sense, PMI protects the lender in the event that you default on your mortgage. Unfortunately though, it doesn't protect you from anything. How much you will pay in PMI charges will vary depending on the size of your loan, the size of your down payment, and even the lender you use. Generally, the charge is equal to about one-half of one percent.

For example, let's say you bought a home for $100,000 and were only able to put down a total of ten% ($10,000). The loan amount would be $90,000 and the lender would calculate you monthly PMI by multiplying $90,000 by 0.005. The end result would be an annual PMI charge of $450, which would add an additional $38 (approximately) to your monthly bill. But that's enough math. Let's talk about how long you actually have to pay for PMI. This is where the 20% comes in.

Luckily for you, PMI isn't charged forever. In most all cases, PMI is automatically dropped from your loan once you have paid down you principle balance by 20%. If you're close to reaching this figure, it is worth calling your loan servicer and making sure your PMI is removed at this point. Also, luckily for you, if your home appreciates to the point where your equity is over twenty percent, you can have the PMI charges dropped too. Obviously you will need a new appraisal to get this accomplished (which will run you a few hundred dollars) but you will quickly make that back by having your monthly payment reduced, if you do in fact proved that your home's value has increased.

You should also be aware that, while the interest you pay on your mortgage is usually tax-deductible, PMI is not.

So what happens if you simply cannot afford to put 20% down on your mortgage and you really just don't want to pay PMI? Well, fortunately there are a couple of options at your disposal.

TIPS FOR AVOIDING PMI

The main way to avoid paying for PMI to take out an "80-10-10" loan, which involves getting two mortgages rolled into one. The main loan would be 80% of the total sales price, the second mortgage would be 10%, and the last 10% would be your down payment. It is likely that your second mortgage would have a slightly higher interest rate, but since the amount you are borrowing is much less, it would still be lower than paying one single mortgage with PMI. You also could see additional savings because all of your interest would be tax deductible. Yay!

Another way to get around paying for PMI is to take out a loan with a higher interest rate. Most lenders will agree to waive this charge if you pay the higher rate until your equity gets to 20%. Once you reach that mark, your interest rate would be lowered.

The rate increase you would see will typically range anywhere from 0.5 to 1 percentage point. Usually the higher your down payment, the lower the increase. Again, the advantage to doing this is that the added interest is tax-deductible.

So in conclusion, PMI is just one of those things you are probably going to have to deal with if you are taking out a home loan and don't have enough cash on hand to make a down payment of at least 20%. But don't worry, probably anyone you know that has a house has had to deal with it. And like I said, it automatically goes away when you pay down your mortgage enough.

As always, if you have any questions about PMI, don't hesitate to CONTACT US and we will get back to you as soon as possible!
- Pate

The Regular Joe's Guide to Types of Mortgages

2010-10-04T14:41:00.000-05:00

If you are in the market for a new home, it is utterly imperative that you review your financing options before you make any concrete decisions. Depending on the circumstances (and in order to make sure you get the best possible loan) you should be aware of what choices you have, and what types of financing are at your disposal.

Believe me, all the different types of loans can be quite intimidating to someone uneducated on the subject. In fact, most people in America don't know hardly anything about their financing options. But don't worry. That's to be expected.

BASIC LOAN TYPES

The type of mortgage that the majority of people today will get is know as the traditional fixed rate mortgage, or FRM. Over 70% of homeowners this year will get this type of financing for their new home. The main reason for this is that the FRM offers a much stronger sense of stability over the other types of financing. Whether the life of your loan spans 15 or 30 years, the interest rate of this loan is locked in at origination and will not change, no matter what happens to the economy or the mortgage market.

The other main type of loan is called an Adjustable Rate Mortgage, or ARM loan. This type has an interest rate that is tied to an index, and can rise or fall depending on the current mortgage market. In general, if the prevailing market increased during one adjustment period (which is specified when you close the loan) then your interest rate will rise, along with your payment. Adversely, your payment amount will drop if the market drops.

The main reason some people decide to go with an ARM loan is that it will initially offer you a much lower interest rate, which means your monthly payment will be significantly cheaper. That dark side is that your interest rate can sky rocket, leaving you with a mortgage payment that can be hard to pay every month. Luckily, though, when you go to your closing, caps are usually set on how high your rate can go. Be careful though. Make sure you know what you're doing before you get setup in one of these loans.

OTHER LOAN TYPES

Payment Option ARMs. You may hear this type of mortgage referred to as a "flexible payment ARM." These loans have an interest rate that adjusts every month (like a regular ARM loan) but with no adjustment caps, meaning the sky is the limit. The draw of these loans is that they allow homeowners to make a very low initial monthly payment, but unfortunately the amount will often jump up over time, and usually quite steeply.

Interest Only Mortgages. This type of loan allows borrowers to pay only the interest portion of their payment for a certain amount of time. This is a good type of financing for the short term, because the principle of the loan is not paid down, and the outcome is a lower monthly payment for the homeowner. That being said, the interest only period doesn't last forever, and once it expires you can expect your payment to increase due to the fact that you are repaying all of your principle over a shorter period of time. Basically, the longer your setup your interest only period, the higher your monthly payment will be once it expires.

Balloon Mortgages. At first glance, these types of loans will very much resemble a traditional 30 year fixed rate loan. The difference being that the term of the loan is almost always much shorter, usually around 5-7 years. After this time limit is over, the remaining balance must be paid in one single lump sum. In most cases a borrower will refinance once this point is met, or else pay the entire amount.

Biweekly Mortgages. CLICK HERE to read more about these types of loans. They can take years off the life of your loan if done correctly.

As always, if you have any questions about the different types of loans, please don't hesitate to CONTACT US and we will get back to you with an answer ASAP.

- Pate

Should You Buy Mortgage (DISCOUNT) Points?

2010-10-04T14:39:00.000-05:00

One of the most commonly referred to aspects of obtaining a mortgage is the all-important issue of "points." If you're in the market for a new home, or if you're looking to purchase for the first time, you've undoubtedly heard of them before, although you may have no idea what it means, or what "points" even refers to.

Let's start at the very beginning. When you hear someone talking about mortgage points, they are speaking in reference to "discount points." In the most basic sense, one point is equal to one percent of the amount you are planning to borrow. So for example, if you were getting a loan for $150,000, then one point would be equal to $1,500.

After that is when it gets tricky, so pay attention. When you purchase points, you are basically making the decision to prepay part of your mortgage interest. If that doesn't make sense, look at it this way. For every point you buy, your lender will offer you a lower interest rate. The actual amount your interest rate will drop can vary, but in most cases its is approximately 1/4 of a percentage point per every discount point you purchased. Whew.

Here's an example if you're still confused. Let's say you are borrowing $100,000. To drop your interest rate by half a percentage point you would need to spend $2000. In most cases, a lender will let you purchase as many as 4 discount points (if you are so inclined).

But let's not jump the gun here. You need to take a few things into consideration before you go to your lender trying to buy as many discount points as possible.

First of all (and just like everything else in this world) the main thing to think about when buying discount points is CAN YOU AFFORD IT? A lot of people (especially first time homebuyers) are pretty strapped for cash when they decide to purchase a new home, and having an extra 5 or 6 thousand dollars laying around for points just isn't reality.

In fact, even if you had that money laying around, you have to wonder if it would help you out more to spend it elsewhere, such as on home improvements or moving expenses. You might even yield a higher return from your money if you put it into the stock market or purchased bonds.

Another major issue to consider has to do with how long you plan on living in the house you just purchased (or refinanced). Since buying these points is really just prepaying part of your interest upfront, it might take several years before the money you are saving exceeds the amount you paid upfront for the discount. Obviously, the longer you plan on living at the property, the better deal (and the more money you end up saving) over the life of your loan!

So the key to finding out if buying points is worth it is to calculate the breakeven point, which is when the amount you save each month catches up to the amount you spent on the discount points. If you move out before this point is reached, the bank ends up winning, and vice versa.

In most cases the breakeven point is reached anywhere between 4 and 6 years after the loan is originated, depending on your interest rate and the amount you paid in points. A quality loan officer should be able to break down the numbers for you and show when the breakeven point is obtainable.

As always, if you have any questions about purchasing discounts points (or anything mortgage related) don't hesitate to CONTACT US and we will get back to you asap!

- Pate

Closing Costs Explained

2010-10-04T14:36:00.000-05:00

When it comes to purchasing a house there is one thing that will shock a first-time home buyer more than anything, and that is the total cost associated with closing a loan. To be totally honest, closing costs can be quite earth-shaking to someone who isn't ready. If you are planning to buy a house anytime soon it is strongly recommended that you get your budget in order ahead of time.

If you would like us to review your situation and give you an estimate of what closing costs you may encounter, please feel free to contact us. If not, feel free to read the rest of the article!

Continued: Some of these closing costs are charged by the mortgage company itself, while others are payable to various parties. Here's a little breakdown on some of the fees you may be charged, and who's getting your money.

One of the first fees you're going to run into is the Application Fee. This is charged when you fill out your initial application (the 1003) and is non-refundable. This covers the costs your lender pays in regard to paperwork, or maybe even your credit report when you got pre-approved.

Next is the Loan Origination Fee, which is charged by the lender to cover all the costs that are associated with processing your loan. This also covers their administrative costs. This fee is generally charged to you in the form of "points", where one point equals one % of the amount you are planning on borrowing. So for example, if you are borrowing $150,000, one point is equal to $1,500.

There is actually a symbiotic relationship between "points" and the interest rate you obtain. It is possible to find a loan that charges little or no points, but you will see this reflected to you in a higher interest rate. You can also obtain a lower interest rate by paying extra points up front.

One fee that you will regularly encounter (and which is actually usually optional) is the home inspection fee. In the beginning phases of obtaining a home loan you will be advised to get an inspection for your new house, and it is a very smart move. Mortgages are often stopped dead in their tracks if you get as far as the appraisal and it turns out your foundation is destroyed, or if termites have infested the property.

Next on the list is the appraisal fee. Depending on what type of loan you are getting, your lender will more than likely require a new appraisal of the house before they fund your mortgage. This is done because the bank wants to make absolutely certain that the house you are buying is worth the amount you are paying for it. This fee is usually anywhere from $300-$500.

Some more of your closing costs will come from paying a premium for Private Mortgage Insurance (PMI). Mortgage insurance is paid to protect the lender in case you default on your loan, and if your down payment is less than twenty percent of the purchase price, you will be required to pay this premium no matter what. For closing, you will have to prepay a portion of this when you sign the final documents. The good news is, though, once you reach 20% of the value, the Mortgage Insurance is removed from your monthly payment automatically, saving you money!

Prepaid "per diem" interest is another fee you will encounter at closing. You'll have to pay this to cover the amount of interest that accrues from the time your mortgage is funded until you make your first payment.

The last few random fees you will see can be things such as messenger, recording, and notary fees. These are all commonplace and not at all unusual.

In conclusion, while all these costs may seem a little daunting, it is worth noting that they will be all listed out for you in an organized fashion when you get to your closing and are ready to sign. A good loan officer will notify and explain to you about all these costs beforehand, so you should have a good idea of how much money to bring to closing, and what all your cash is going towards. Soon enough you will be done with the paperwork and ready to move into your new home!

If you have any questions about closing costs, don't hesitate to CONTACT US and we can explain it to you in even better detail!

Refinancing Your Mortgage

2010-10-04T14:33:00.000-05:00

Refinancing your mortgage can help lower your monthly payment, pay off bills and manage your debt. If interest rates have gone down from the rate you are currently paying on your mortgage, it might be a good idea to refinance. For a free consultation to see if you might benefit from a refinance, feel free to CONTACT US and we will review your situation.

The truth is, few thing in life can compare to the fun filled adventure that is refinancing your mortgage. Wait, what did I just say? That doesn't seem quite right.

The truth is, dealing with a refinance can be quite the arduous process, and for the most part, it's not fun at all. This can be attributed to the abundance of paperwork to fill out, the random lender fees, and the sheer fact that most people don't like modifying their mortgage to begin with. But there is a reason so many people subject themselves to these hardships, and there are times when refinancing your mortgage is an extremely smart decision that can save you thousands of dollars over the life of your loan.

You may have heard on the news that interest rates have been hovering around historic lows lately, and because of this, thousands of homeowners have refinanced their mortgage in order to cut their monthly payment. You might be wondering how this works. Basically, by replacing (refinancing) your old mortgage with a new one (that offers a lower interest rate), you can possibly save hundreds of dollars per month. Imagine if your monthly mortgage went from $1500 a month to $1200. Wouldn't it be nice?

In fact, lowering your monthly payment may not be the only situation where a refinance would benefit you. You would also want to consider this if the mortgage you are in is (the dreaded) adjustable rate mortgage. If you find yourself in this situation, and interest rates are expected to rise, it would be extremely smart to lock yourself in a lower, fixed rate that will keep you sleeping soundly no matter how high rates may sail. And let me tell you, the sky is the limit.

Another reason a person may be interested in refinancing their mortgage is so they can take cash out of the equity they built up over the years. Instead of just refinancing for the amount they currently owe, they may pull out additional funds to use for improvements on their house, starting a new business, or even putting their kids through college.

Of course though, just like everything else, refinancing a mortgage is not free. It would be nice if it was, but that's just not the case. While you might catch a break and your lender may help out with some of the charges, it is extremely likely that you will still be looking at several thousand dollars in closing costs to pay for a quality refinance. Obviously you must consider these closing costs when deciding whether or not to follow through with the refinance. The trick is figuring out how long it will take before the lower monthly payments make up for the added fees and closing costs. We call this the "break even" point. Once this point is met, each month afterward you start seeing the extra cash in your pocket.

The biggest thing to consider in regards to this (if you're doing the refi to save money) is how long you plan on living in the house, and the difference between your old rate and the new one. Long story short, the bigger the difference in rate and the longer you plan on living there, the quicker you start saving moolah! Wahoo!

To find out if doing a refinance would be cost effective for you, you need to find out what the break even point would be for your mortgage. To figure this, simply divide the amount of closing costs by the amount of monthly savings. For example, if you are saving $300 a month, and your closing costs are $5000, just do the math:

$5000 / $300 = 16.67

Meaning that after a year and 4 months (approximately) you would start seeing the savings. So if you are planning on living in your house longer than this, a refinance would be beneficial to you!

As always, if you have any questions or comments, or if you are interested in a refinance yourself (and you don't feel like doing any math), don't hesitate to CONTACT US. We will evaluate your current situation and let you know if a refinance might work!

- Pate

Qualifying For A Mortgage

2010-10-04T14:29:00.000-05:00

Unless you find yourself in the rare situation of having a few hundred thousand dollars laying around (or stuffed under your mattress), you're going to have to take out a mortgage if you want to purchase a house. There just isn't a way around it. So here's some tips for getting the process started, or as we call it in the mortgage biz, "getting pre-qualified."

The first thing you are going to need to do is make sure all of your finances are in order. If managed early (and correctly), this can help so there won't be any inconvenient roadblocks at the last minute that might prevent you from buying your dream home.

Long story short, lenders are going to look at a few specific things before they give you the green light to go shopping for your first mansion. Here they are:

1. Your credit history. Pretty much the first thing the banks will do when they see your name is pull a copy of your credit report and check it very thoroughly. Banks do this because they want to get a clear picture of how you pay your bills, how often, and basically what kind of borrower you are.

2. Do you pay your bills on time? Do you habitually pay them late? How many different accounts do you have open? How many cards do you have? What are your credit limits for each account and what are your current balances? Have you ever declared bankruptcy? ETC, ETC, ETC.

Basically, lenders are going to want answers to these questions before they make the all-important decision to lend you their money. But don't fret if you have a late payment here or there, its not the end of the world. Lenders are more concerned about the frequency in which the late payments were made. The more late payments, the greater the risk, and vice versa.

3. Your debt-to-income ratio. You may have heard of this, and while ratio's may not be your bag, it's really not too difficult to figure out. This term basically refers to the amount of money you make compared to how much money you are obligated to spend each month (on things like car payments, insurance, cell phone bills, etc). If your debt is too high in relation to how much you make, a lender may decline to offer you a mortgage, or they may be wary about how much money they lend.

4. You should also not be surprised if the lender requests you to provide proof of your employment and income. In most cases a couple months worth of recent pay stubs suffice. Even then, the lender may still want to verify that you are indeed making as much as you claim to be. If you have only been at your present job for a year or two they may require proof of employment from your previous employer as well. If you were in school before that, they may request a copy of your transcript.

5. One more large concern for lenders when considering qualifying you for a loan is how much cash you have on hand (or in your checking/savings account). Don't be surprised if you are asked for copies of your recent bank statements and retirement fund balances, as well as any stocks, bonds, or other investments you may have.

This is done because the lender wants to make absolutely certain you have enough cash in your reserves to cover the down payment and closing costs without wiping yourself out.

Overall this may seem a little invasive, but don't worry. Due to the subprime crisis and all the fraud associate with the industry over the last decade, lenders are having to be increasingly stringent when deciding who they lend money to. If done correctly, you can get lined up and put in a great house that meets your financial needs and demands!

As always, if you have any questions or need to get qualified yourself, don't hesitate to give me a call (817-527-3164) or shoot me an email (mpate@wewalkyouhome.com)! I'd love to help you out!

Topic o' the Week: Biweekly Mortgage Payments

2010-10-04T14:26:00.000-05:00

If you have the pleasure of owning your own home, your loan servicer probably contacts you all the time trying to get you to change or update your mortgage in some way. Some of these changes may include refinancing your current loan, taking out a home equity line of credit, or converting your loan into a biweekly mortgage. While the thought of changing your mortgage may seem as a major annoyance, it is definitely worth the time to see if any of these changes could benefit you. So let's get started.

The folks at the bank claim that switching to a biweekly mortgage can cut the total length of your loan by 5 to 7 years, and at the same time save you thousands of dollars in interest. Of course this sounds amazing, but is it TRUE? Is it worth pursuing? Will the Rangers slump after the all-star break? Fortunately for you, the former questions are easier to answer.

Overall, the process of converting your existing loan into a biweekly mortgage works quite simply. In fact, by switching to a biweekly mortgage you aren't even really changing anything about the terms of your loan, the amount you owe, or any of the stipulations. Basically, instead of paying your mortgage monthly, you pay half your monthly bill biweekly. By paying the bill every other week, you end up making an extra payment each year!

Now I know you probably hate math, but here's a relatively simple example that shows how the biweekly program could work for you. We will use a nice round number to begin with. For example, let's go ahead and say that your monthly mortgage payment is $1,000. If you make 12 monthly payments, you will have paid $12,000 at the end of the year. Right?

Well, if you pay biweekly, you will end up making a total of 26 payments each year. So in turn, by paying $500 every other week, you will have paid a total of $13,000 by the end of the year. The end result being that you made one extra payment, which will reduce your unpaid principle balance (and interest charges).

So furthermore, switching to a biweekly payment schedule is an effective way to cut years off of your mortgage. It may not initially seem like very much, but that extra $1,000 a year will eat away at your balance and help you pay it all off early.

Paying down your principle balance is a sound financial move if you can afford it (obviously). In these tough economic times it isn't always feasible to pay extra each month just to shorten the life of your loan. But is it necessary to sign up for a biweekly payment plan? And why is the bank asking you to sign up to begin with?

You see, there's a catch. Judging by the notion that nothing on Earth is ever free, most banks have made it where to you have to pay a fee to setup this type of payment schedule. It's usually somewhere between $200-$500, and some banks will also charge you a monthly processing fee. Other banks will even use a third party company to handle your account if you switch to biweekly. All this just so you can pay more on your loan.

But don't worry! There is a way around all these arbitrary fees! It is still possible to pay down your mortgage just as quickly without having to deal with the bank or pay them extra each month.

Here's the scoop: Just take the amount of your monthly mortgage payment and divide it by twelve. Using the example above, $1,000 divided by 12 equals $83.33. Now simply add this amount to your payment each month and make sure to make a note that you want it applied to your principal. Believe me, I worked in the loan servicing industry for years, and they will do whatever it takes to not apply the money to your principle.

But anyways.....

By making the 12 payments of $1,083.33, you will have paid off $12,999.96 at the end of the year. Just like that, you've gained all of the advantages of the biweekly mortgage without having to pay any fees or service charges! Hooray!