First-Time Home Buyer Credit Checklist

Getting a new mortgage for a First-Time Home Buyer can be a little overwhelming with all of the important details, guidelines and potential speed bumps. Since there are so many rules and steps to follow, here is a simple list of Do’s and Don’ts to keep in mind throughout the mortgage approval process: DO: Continue working at your current job Stay current on all your accounts Keep making your house or rent payments Keep your insurance payments current Continue to maintain your credit as usual Call us if you have any questions DON’T: Make any major purchases (Car, Boat, Jet Ski, Home Theater…) Apply for new credit Open new credit cards Transfer any balances from one credit or bank acct to another Pay off any charge-off accts or collections Take out furniture loans Close any credit cards Max out your credit cards Consolidate credit debt Basically, while you are in the process of getting a new mortgage, keep your financial status as stable as possible until the loan is funded and recorded. Any number of minor changes could easily raise a red flag or cause a negative impact on a credit score that may result in a denied loan. Most importantly, check with your loan officer on even the simplest questions to make sure your loan approval is successful.

Do I Need To Sell My Home Before I Can Qualify For A New Mortgage On Another Property?

Although every situation is unique, it is not uncommon for homebuyers to qualify for a mortgage on a new home while still living in their primary residence. Perhaps you are outgrowing your current house, or have been forced to relocate due to a job transfer? Regardless of the motivation for keeping one property while purchasing another, let’s address this question with the mortgage approval in mind: So, Do I Have To Sell? Yes. No. Maybe. It depends. Welcome to the wonderful world of mortgage lending. Only in this industry can one simple question elicit four answers…and all of them may be right. If you are in a financial position where you qualify to afford both your current residence and the proposed payment on your new house, then the simple answer is No! Qualifying based on your Debt-to-Income Ratio is one thing, but remember to budget for the additional expenses of maintaining multiple properties. Everything from mortgage payments, increased property taxes and hazard insurance to unexpected repairs should be factored into your final decision. What If I Rent My Current Property? This scenario presents the “maybe” and the “it depends” answers to the question. If you’re not quite qualified to carry both mortgages, you may have to rent the other property in order to offset the mortgage payment. In that scenario, the lender will typically only count 75% of the monthly rent you are proposing to receive. So if you are going to receive $1000 a month in rent and your current payment is $1500, the lender is going to factor in an additional $750 of monthly liabilities in your overall Debt-to-Income Ratios. Another detail that can present a huge hurdle is the reserve requirement and equity ratio most lenders have. In some cases, if you are going to rent out your current home, you will need to have at least 25% equity in order to offset your payment with the proposed rent you will receive. Without that hefty amount of equity, you will have to qualify to afford BOTH mortgage payments. You will also need some significant cash in the bank. Generally, lenders will require six months reserve on the old property, as well as six month reserves on the new property. For example, if you have a $1500 payment on your old house and are buying a home with a $2000 monthly payment, you will need over $21,000 in the bank. Keep in mind, this reserve requirement is incremental to your down payment on the new property. What If I Can’t Qualify Based On Both Mortgage Payments? This answer is pretty straightforward, and doesn’t require a financial calculator to figure out. If you are in this situation, then you will have to sell your current home before buying a new one. If you aren’t sure of the value of the home or how your local market is performing, give us a ring and we’ll happily refer you to a great real estate agent that is in tune with property values in your neighborhood. As you can tell, purchasing one home while living in another can be a very complicated transaction. Please contact us at anytime so we can review your specific situation and suggest the proper action plan.

What is a Mortgage?

Mortgage Payments You’re probably curious why we’ve created an entire section about mortgage payments. However, since a mortgage payment is one of the major side affects of purchasing real estate with a home loan financing program, we thought it would be important to highlight a couple topics and related articles about mortgage payments that may impact your monthly budget. Mortgage Payment Basics: Just in case your first mortgage payment comes due before you get your first payment coupon in the mail, there should actually be a temporary payment coupon included with your closing documents. Your mortgage payment is generally due at the beginning of the month, and most lenders start assessing late fees on the 15th. It is extremely important to remain under 30 days late on a mortgage payment, especially within the first 8-12 months of closing on a new loan. When you receive your first mortgage bill, there will be a few numbers that add up to your total payment: Principal – This is the portion that goes towards paying down your balance. An Amortization Schedule will break down the exact amount of each payment that is being applied to the principal and interest. Interest – The interest payment is essentially the amount you’re paying the bank over time to borrow the principal balance. Depending on which loan program, interest rate and closing cost scenario you chose, the amount of interest due every month may vary. Taxes - Real Estate Taxes can either be included (Impounded) in your monthly payment (PITI), or paid by the homeowner separately. Certain government loan programs or high Loan-to-Value (LTV) mortgages require that taxes and insurance be included with the total mortgage payment. Either way, it’s important to make sure you ask your loan officer and/or closing agent during the final loan docs signing to clearly explain what’s included in your monthly mortgage payment. Insurance – This is your hazard insurance (Fire), which protects your home and belongings. While there are many ways to save money on your property insurance, it’s important to know and trust your insurance agent so that you can be fully aware of what’s covered in your policy. Some homeowners shopping strictly on price may unknowingly leave valuable personal items without protection just to save an extra $15-$19 a month. Mortgage Insurance – This can come in a few different forms, depending on whether you have an FHA loan, VA, Conventional, Jumbo… Mortgage insurance is in addition to hazard insurance, and completely unrelated. A lender will require a borrower to pay mortgage insurance on a property with a Loan-to-Value greater than 80%. The main purpose of mortgage insurance is to protect from foreclosure losses if the borrower fails to meet the monthly payment obligations. FHA has mandatory Mortgage Insurance, but in a different form. VA loans have a separate Funding Fee to help protect their interests.

What is my Home Worth??

What Do Appraisers Look For When Determining A Property’s Value? Most people are surprised to learn what appraisers actually look at when determining the value of a real estate property. A common misconception homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection. However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property. The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property. While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling. The Key Components Addressed In An Appraisal The Site: Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features… Design: Quality of construction, finish work, fixed appliances and any defining features Condition: Age, deterioration, renovations, upgrades, added features Health & Safety: Structural integrity, code compliance Size: Above grade and below grade improvements Neighborhood: Is the property conforming to the neighborhood? Functional Utility: Is the property functional as built – style and use? Parking: Garages, Carports, Shops, etc.. Other: Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home. When entering your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items. Be sure to have all carbon monoxide and smoke detectors in working condition. Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing. We hope you found this information helpful. For more information about our company please visit www.txpremiermortgage.com, or give us a call at 281-907-6401 and we would be happy to assist you!

Be an All Star Player- Hit a Home Run With Your Mortgage

Mortgage Rates Change All Day, Every Day. Mortgage bond prices-- similar to stock prices -- are random. They can't be predicted with any sort of certainty, and they change from minute-to-minute. Facts like this are big deal to people like you and me because mortgage bonds are the basis of everyday mortgage rates -- from conforming to FHA. Mortgage rates are in constant flux. As a real-life illustration, mortgage rates changed every 4 hours and change last month. It makes life tough for people looking to shop for the lowest mortgage rates possible. Mostly because it can take more than 4 hours to do your shopping (and do it right). Shopping lenders is always a good idea. You never know which bank will have the lowest rates, or lowest fees, or widest selection of programs. But, when it comes to physically lock your rate; to find the best possible mortgage rate that you can with the lowest set of closing costs, you're going to need more than just "good shopping skills". You're going to need good luck. Mortgage rates can change at any time, and often do. While you're shopping for a loan, for example, rates could be rising. And not just by an eighth-percent here and there. I'm talking big jumps. There have been a half-dozen days in the past year on which conforming mortgage rates rose 0.375. There have also been days when rates have dropped by as much. It reminds us of an important Mortgage Rate Axiom: You can't shop for good luck. • Some days, mortgage rates happen to rise • Some days, mortgage rates happen to fall • Some days, mortgage rates do nothing And then, there are the days when mortgage rates do all three. You're at the market's mercy and the market is merciless. Want Good Mortgage Rate Luck? Do Good Research. Since you can't shop for good luck in mortgages, you can at least shop for good information. Talk with multiple loan officers well before you have a need to lock-in, and gather as much data as possible -- about yourself, about your home, and the process, and about the mortgage market drivers. Then, after having these conversations, two things will happen. First, you'll get a very close approximation of your final closing costs and rates. This is important for comparison's sake. You need to know which lender is consistently in the ballgame, and which lender never is. Second, you'll get a feel for the loan officers to whom you're talking. Who's a professional, who's a hack, and who fails to return a phone call. Then, when it is time to lock-in, you won't have to screw around with the shopping process. You'll already know your "A List" of lenders and can choose the one that gives the best combination of rates and fees at that given moment. Just make sure, though, that when you shop for rates, you do it the right way. Let your lender pull your credit for pete's sake. It's not going to harm your score and your lenders need to know this stuff. If you're in the market for a mortgage, or know you'll need one soon, start your shopping here. Get a rate quote based on your parameters, and follow-up for more information. Oh, and do it with some other lenders, too. The trick to getting low mortgage rates is to do a fair amount of research, to pick a "good" lender, and to have a little luck. You can make it happen. You just have to start strong. Give us a call so we can help you! Find out more on our website here.

How Obtaining a Pre-Approval Helps You

Many buyers get frustrated when their Realtor asks if they have been pre-approved. They think, “all I want to do is look at houses, we can worry about the pre-approval later.” We understand your frustration, but let us help explain why the pre-approval process is so important. A preapproval is different from a prequalification. With a prequalification, the lender relies on information provided by the buyer to estimate how much the borrower could qualify for. With a preapproval, the lender verifies the borrower's information and documentation to determine exactly how much it would be willing to lend to that borrower. The documents to get preapproved are the same documents that you would need to get a mortgage. • Pay stubs. • Last 2 years' W-2s. • Last 2 federal returns. • Two months' worth of bank statements of all types of accounts. • Your credit report. A preapproval is not a loan commitment, but it helps speed up the underwriting and loan approval process. A Pre-approval Letter shows that you can buy a house. Unless you plan on buying a house for cash, you will need some sort of financing. If you cannot obtain the financing, say hasta luego to the idea of buying a home, for now. There is not much more that is frustrating (to buyers and Realtors alike) than to look at houses for several days only to find out that you cannot obtain financing to buy one. Therefore, we usually ask for a pre-approval so we can both have reassurance that you can buy a house. Second, a Pre-approval Letter helps define your search. It lets you know what you can spend, so it saves time and energy from searching for houses that you cannot afford. Think of the emotional drain of finding the house of your dreams and then the bank says that you cannot afford it. We would rather you not look at those houses that you cannot afford. If you can only afford a $100,000 house, we need to make sure you are only looking in that price range. If you look at too many houses outside of your price range, you will not enjoy the houses in your price range as much. A Ford Focus never looks as good after you drive a Lamborghini. Having the letter allows you to have more leverage in negotiations with the seller Having a pre-approval letter really makes your offer look good to the seller of the house. They are more willing to negotiate with someone who is pre-approved than someone who isn’t. Plus, if there are multiple offers on a house, yours will be ranked higher due to the fact that you are already pre-approved. It is less risky for the seller than looking at an offer from someone who isn’t. A Pre-approval letter is better than being pre-qualified. Many banks will give you an informal estimate of what you can afford, and this is known as pre-qualification. It is not a statement of fact, but rather an opinion. Make sure you get an official Pre-Approval letter. This is a statement of fact, and will hold a lot more weight than a pre-qualification letter. It takes more work to get pre-approved, but it will save you a lot of time in the long run. We hope this gives you a few reasons why it is so important to get pre-approved. If you have a hard time starting the pre-approval process, give us a call at 281-907-6401, and visit us at TxPremierMortgage.com, and we can help lead you in the right direction. Most of our pre-approvals can be given to you within the same day as long as all information is provided by you upfront.

Texas Premier Mortgage - Mortgage Blog - The Woodlands, Texas: What is the Job of a Mortgage Underwriter?

Texas Premier Mortgage - Mortgage Blog - The Woodlands, Texas: What is the Job of a Mortgage Underwriter?: Here’s some Q&A with regard to the home loan approval process: “What do underwriters do?” Once you actually apply for a home loan, your...

What is the Job of a Mortgage Underwriter?

Here’s some Q&A with regard to the home loan approval process: “What do underwriters do?” Once you actually apply for a home loan, your mortgage application will be organized by a loan processor and then sent along to a loan underwriter, who will determine if you qualify for a mortgage. The underwriter can be your best friend or your worst enemy, so it’s important to put your best foot forward. The expression, “you’ve only got one chance to make a first impression” comes to mind here. Trust me, you’ll want to get it right the first time to avoid going down the bureaucratic rabbit hole. Put simply, the underwriter’s job is to approve, suspend, or decline your mortgage application. If the loan is approved, you’ll receive a list of “conditions” which must be met before you receive your loan documents. So in essence, it’s really a conditional loan approval. If the loan is suspended, you’ll need to supply additional information or documentation to move it to approved status. If the loan is declined, you’ll more than likely need to apply elsewhere, with another bank or mortgage lender. Now you may be wondering how underwriters determine the outcome of your mortgage application? Well, there are the “three C’s of underwriting,” otherwise known as credit reputation, capacity, and collateral. Credit reputation has to do with your credit history, including past foreclosures, bankruptcies, judgments, and basically measures your willingness to pay your debts. If you’ve had previous mortgage delinquencies or even non-housing related delinquencies, these will need to be taken into account. Typically these items will be reflected in your three-digit credit score, which can actually eliminate you without any further underwriting necessary if you fall below a certain threshold. Your history supporting significant amounts of debt is also important; if the most you’ve ever financed has been a plasma TV, the underwriter may think twice about approving your six-figure loan application. Capacity deals with a borrower’s actual ability to repay a loan, using things like debt-to-income ratio, salary, cash reserves, loan program and more. This covers whether the loan is interest-only, an adjustable-rate mortgage or a fixed-rate mortgage, cash-out refinance or simply rate and term. The underwriter wants to know that you can repay the mortgage you’re applying for before granting approval. If you’ve had previous mortgage delinquencies or even non-housing related delinquencies, these will need to be taken into account. Typically these items will be reflected in your three-digit credit score, which can actually eliminate you without any further underwriting necessary if you fall below a certain threshold. Your history supporting significant amounts of debt is also important; if the most you’ve ever financed has been a plasma TV, the underwriter may think twice about approving your six-figure loan application. Capacity deals with a borrower’s actual ability to repay a loan, using things like debt-to-income ratio, salary, cash reserves, loan program and more. This covers whether the loan is interest-only, an adjustable-rate mortgage or a fixed-rate mortgage, cash-out refinance or simply rate and term. The underwriter wants to know that you can repay the mortgage you’re applying for before granting approval. Mortgage Underwriter FAQ. Do underwriters work for the bank/lender? Yes, underwriters are employees of banks, lenders, and mortgage bankers. They work on the operational side of things, making loan decisions after the sales team brings the loan in the door. Why do underwriters take so long? Hmm…I don’t know, because they’re approving a six-figure loan amount, or seven, to a complete stranger. The actual underwriting might not take that long, but the amount of available underwriters (humans) might be low. So you could just be in the queue. A clean loan file will get approved faster and with fewer conditions so get it right before the underwriter even sees it. Do underwriters verify employment? While employment is generally verified nowadays when you take out a mortgage, it might not be the underwriter verifying it. Instead, the loan processor may obtain the verification of employment (VOE). Many use the “The Work Number,” an independent third-party employment verification company now owned by credit bureau Equifax. Have more questions? Give us a call at 281-907-6401, or visit us online at TxPremierMortgage.com.

The Woodlands Mortgage Expert: What is Debt To Income- DTI?

Debt-to-Income (DTI) is a lending term which describes a person's monthly debt load as compared to their monthly gross income. Mortgage lenders use Debt-to-Income to determine whether a mortgage applicant can maintain payments a given property. DTI is used for all purchase mortgages and for most refinance transactions. It can be used to answer the question "How Much Home Can I Afford?" Debt-to-Income does not indicate the willingness of a person to make their monthly mortgage payment. It only measures a mortgage payment's economic burden on a household. Most mortgage guidelines enforce a maximum Debt-to-Income limit. How do lenders calculate monthly income? Mortgage lenders calculate income a little bit differently from how you may expect. There's more than just the "take-home" pay to consider, for example. Lenders perform special math for bonus income; give credit for certain itemized tax deductions; and apply specific guidelines to part-time work. The simplest income calculations are applied to W-2 employees who receive no bonus and make no itemized deductions. For W-2 employees, if you're paid twice monthly, your lender will take your last two pay stubs, add your gross income, and use this sum as your monthly household income. If you receive bonus income, your lender will look for a two-history and will average your annual bonus as a monthly figure to add to your mortgage application. For self-employed borrowers and applicants who own more than 25% of a business, calculating income is a bit more involved. To calculate income for a self-employed borrower, mortgage lenders will typically add the adjusted gross income as shown on the two most recent years' federal tax returns, then add certain claimed depreciation to that bottom-line figure. Next, the sum will be divided by 24 months to find your monthly household income. Income which is not shown on tax returns or not yet claimed cannot be used for mortgage qualification purposes. In addition, all mortgage applicants are eligible to use regular, ongoing disbursements for purposes of padding their mortgage income. Pension disbursements and annuities may be claimed so long as they will continue for at least another 36 months, as can social security and disability payments from the federal government. As always, our qualified mortgage loan officers are always a step ahead of you and ready to assist you at anytime. Give us a call 281-907-6401 or visit our website at TxPremierMortgage.com for more information.

10 Mortgage Mistakes You Should Avoid

Here is a list of the top 10 mortgage mistakes individuals should avoid if planning on financing a new home purchase or refinancing an existing mortgage. Anything on this list should be avoided at all costs to ensure your credit score is as high as possible and that you don’t run into any qualification problems when it comes time to get that sparkling new mortgage. Otherwise you could end up with a higher-than-necessary mortgage rate, or simply get declined! 1. While this may be a no-brainer, it still reigns supreme. Avoid bankruptcy and foreclosure. Either could keep you out of the mortgage game for several years for obvious reasons. Also avoid mortgage lates. Even if your credit score is up to snuff, late mortgage payments that show up on your credit report can disqualify you with many banks and lenders. Makes sense doesn’t it? 2. Not locking your mortgage rate. If you fail to (or forget to) lock the interest rate on your mortgage, it could go up. A lot. Yes, you have the choice to lock or float, but make sure you understand both options and keep an eye on interest rates before and during the home loan process. [See the latest mortgage rates from dozens of lenders, updated daily.] 3. Listing your property on the MLS and then attempting to refinance that same property within six months (or longer). Lenders don’t love the idea of giving you a loan on something you don’t actually want, or tried to get rid of just months before. [See more common refinance mistakes if you already own a home.] 4. Applying for a mortgage with charge offs and collections, especially medical collections, on your credit report (many consumers have these, often in error, and they can easily be removed via credit bureau disputes. They crush your FICO score!). Regularly review your credit report to ensure there are no surprises long before you begin the mortgage process. Put simply, a low credit score will lead to a much higher mortgage rate, and even disqualification if it drives your monthly mortgage payment high enough. Also steer clear of credit counseling. (Even if it doesn’t lower your credit score, many banks won’t lend to borrowers who have used these services in the recent past.) 5. Not figuring out how much you can afford well before beginning your property search. You should get pre-qualified or pre-approved before you even start looking at homes. Once you know how much home you can afford based on your salary and assets, you can properly assess the situation. Otherwise you could just be wasting your time and setting yourself up for disappointment. 6. Opening new credit cards or making excessive charges on existing credit lines before and during the loan application process. This can hurt your credit score and increase your debt load, which could lead to disqualification. See debt-to-income ratio for more on that. You can buy your new leather couch and big-screen TV once the loan is funded and closed. 7. Attempting to get a mortgage with less than two years consecutive employment in the same occupation or field (unless you’re a recent grad with proof of future income). You must prove to lenders that you will actually continue to make the money you’re currently making to obtain a mortgage. 8. Trying to get a mortgage without documented 12-month housing history or your own verifiable assets that cover at least two months of your proposed mortgage payment, including taxes and insurance. Yes, lenders want to know that you paid your rent on time previously and have enough in your bank account to cover future payments. Oh, and the money needs to be in your account, not under your mattress. 9. Not establishing your credit history. You generally need at least three credit tradelines (that show up on your credit report) with a minimum two-year history on each. Yes, credit is the root of all evil, but also a necessary one in the mortgage world, that is, unless you plan to pay for your expensive house with cash… 10. Not shopping around. If you don’t take the time to comparison shop, as you would any other product you buy, like a big-screen TV or a car, you’re doing yourself a major disservice. Put in the hours to ensure to find the right bank to work with and snag the best deal. Bonus tip: Don’t forget to compare different loan products, such as fixed-rate mortgages vs. ARMs, and conventional loans vs. FHA loans. Both have their pros and cons, and should be carefully considered before applying for a mortgage. There is no one-size-fits-all approach folks. For more information contact one of our senior loan officers who can help you through the mortgage loan process!

Buying a New Home and A Flood Happens: What to do next

If you are in the process of buying a new home and have already had an appraisal and inspection, then you are well on your way to getting closer to closing on your home! Congratulations! Then all of a sudden BOOM!! A devastating rain storm sends thousands of people out of their homes, many out of electricity, and many affected by flooding in or around their homes. What should you do next? If the governor of your state signs a declaration and declares your county a disaster area, you will be responsible to have the home re-inspected prior to close. The unfortunate part is (other than having to do the re-inspection and postponing your closing) is that inspectors will be super busy and will have trying to fit in all re-inspections on their watch. So, be patient, and be sure to speak with your real estate agent and lender to have up to date information regarding your loan. It usually is the lender who reorders the re-inspection, so maintaining communication with them and making sure they are being proactive will help your loan continue to run smooth. That is why it is important you choose a lender you can trust to have your back when something like this happens. Call Texas Premier Mortgage at 281-907-6401, and speak to one of our qualified loan officers who can help you with any questions you may have.

It is Tax Season: Tax Breaks for First Time Home Buyers

Are you thinking about purchasing your first home? Tax breaks available for first-time homeowners may make it worthwhile. Consult your accountant or tax professional about which of these conditions apply to you. You may be able to deduct the total amount of interest paid on your mortgage. If you make a down payment of less than 20% of the home’s purchase price, you will need private mortgage insurance – which may be deductible. Mortgage insurance on government-backed mortgages may also be deductible in the same way as mortgage interest. You may be able to deduct local real estate property taxes you pay on your new home. Check to see if you are able to deduct points and charges you paid to your lender to obtain the mortgage for your first home purchase. As your lender, Texas Premier Mortgage loan officers would be happy to assist you with this! If you choose to install renewable energy systems in your home, such as solar panels, you may be eligible for deductions of up to 30% of the installation costs. If you purchased your first home for a job opportunity and moved more than 50 miles for it, you may be able to deduct your moving expenses. If your new home required some upgrades, you may deduct the value of donated construction materials or demolition waste donated to a qualified charity.

The Golden Rule of Mortgage Lending

You have heard of the saying of the golden rule, "Do unto others as you would have them do unto you." The real question is, when we apply this to our everyday lives, towards our friends, co-workers, boss, family, clients, do we really practice it? In order to be successful in any line of work, you must always put this rule first. Forget about what anyone may think about you, but just do the right thing for your customer. This principle is really simple. This is why we continue to have referral partners and repeat customers over and over again. Think of others first, and the rest will fall into place. At Texas Premier Mortgage, we take pride in knowing we provide the best service we can to all of our customers.

We appreciate the fact that our customers are willing to give us a chance to assist them, and in return will always apply the golden rule for them, and anyone we provide a service for. Who can you apply the golden rule for today in your life? In ours, its simple...everyone!

Benefits of a VA Loan

VA mortgage rates can be 100 basis points (1.00%) or more below rates for comparable conventional home loans, especially for borrowers with less-than-perfect credit. This is because VA mortgage rates are the interest rates assigned to loans which are guaranteed by the Department of Veterans Affairs under its Home Loan Guaranty program. The VA Home Loan Guaranty program protect mortgage lenders against loss, which allows banks to offer reduced rates to borrowers. VA mortgage rates are often the lowest mortgage rates of all rates linked to government-backed mortgage programs, including conventional loans, FHA loans, and USDA loans. There is a "right program" for every mortgage borrower, but for many home buyers, the VA loan stands apart for its combination of low rates, aggressive underwriting, and secondary benefits. VA loans are available via any approved VA lender and are a key part of today's housing market. The VA Loan: Better Than FHA and Conventional Loans? Backed by the U.S. Department of Veterans Affairs, VA loans are designed to help active-duty military personnel, veterans and certain other groups become homeowners at an affordable cost. The VA loan asks for no down payment, requires no mortgage insurance, allows flexible guidelines for qualification among its many other advantages. Here's an overview of the 10 biggest benefits of a VA home loan. 1. No Down Payment On A VA Loan Most home loan programs require you to make at least a small down payment to buy a home. The VA home loan is an exception. Rather than paying 5, 10, 20 percent or more of the home's purchase price upfront in cash, with a VA loan you can finance up to 100 percent of the purchase price. The VA loan is a true no-money-down opportunity. 2. No Mortgage Insurance For VA Loans Typically, lenders require you to pay for mortgage insurance if you make a down payment that's less than 20 percent. This insurance, which is known as private mortgage insurance (PMI) for a conventional loan and a mortgage insurance premium (MIP) for an FHA loan, protects the lender in the event that you default on your loan. VA loans require neither a down payment nor mortgage insurance. That makes this a VA-backed mortgage very affordable upfront and over time. 3. VA Loans Have A Government Guarantee There's a reason why the VA loan comes with such favorable terms. The federal government guarantees that a portion of the loan will be repaid to the lender even if you're unable to make monthly payments for whatever reason. This guarantee encourages and enables lenders to offer VA loans with exceptionally attractive terms to borrowers that want them. 4. Your Ability To Shop and Compare VA Loans VA loans are neither originated nor funded by the VA. Furthermore, mortgage rates for VA loans aren't set by the VA itself. Instead, VA loans are offered by U.S. banks, savings-and-loans institutions, credit unions and mortgage lenders -- each of which sets its own VA loan rates and fees. This means you can shop around and compare loan offers and still choose the VA loan that works best for your budget. 5. VA Loans Don't Allow A Prepayment Penalty A VA loan won't restrict your right to sell your home if you decide you no longer want to own it. There’s no prepayment penalty or early-exit fee no matter within what time frame you decide to sell your home. Furthermore, there are no restrictions regarding a refinance of your VA loan. You can refinance your existing VA loan into another VA loan via the agency's Interest Rate Reduction Refinance Loan (IRRRL) program or switch into a non-VA loan at any time. 6. VA Loans Come in Many Varieties A VA loan can have a fixed rate or an adjustable rate. It can be used to buy a house, condo, new-built home, manufactured home, duplex or other types of properties. Or, it can be used to refinance your existing mortgage, make repairs or improvements to your home, or make your home more energy efficient. The choices are yours. A VA-approved lender can help you decide. 7. It's Easier To Qualify For VA Loans Like all mortgage types, VA loans require specific documentation, an acceptable credit history and sufficient income to make your monthly payments. But, as compared to other loan programs, VA loan guidelines tend to be more flexible. This is made possible because of the VA loan guaranty. The Department of Veterans Affairs genuinely wants to make it easier for you to buy a home or refinance. 8. VA Loan Closing Costs Are Lower The VA limits the closing costs lenders can charge to VA loan applicants. This is another way that a VA loan can be more affordable than other types of loans. Money saved can be used for furniture, moving costs, home improvements or anything else. 9. The VA Offers Funding Fee Flexibility VA loans require a "funding fee", an upfront cost based on your loan amount, your type of eligible service, your down payment size plus other factors. Funding fees don't need to be paid as cash, though. The VA allows it to be financed with the loan, so nothing is due at closing. And, not all VA borrowers will pay it. VA funding fees are normally waived for veterans who receive VA disability compensation and for unmarried surviving spouses of veterans who died in service or as a result of a service-connected disability. Interested in learning more? Contact us today! 281-627-4222 or www.txpremiermortgage.com. Visit with us today to find out more.

Student loans? Don't Let it Stop You From Becoming a Homeowner!

If you’re like many of today’s college graduates, student loan debt is a burden. The average student graduated with nearly $30,000 in student loan debt in 2013 — a modest down payment amount to say the least. You might think you’re stuck renting until you can get those loans paid off, but simply having debt doesn’t preclude you from qualifying for a home loan. To find out if buying a home makes sense for you now, the first step is to determine your current debt-to-income ratio. Say you and your spouse make about $6,000 each month, before taxes. Your monthly student loan payments are $400 and you have about $200 in other debt, which includes payments on any credit cards or auto loans. Thus, you’re currently spending 10% ($600) of your monthly income on debt. Now, imagine what debt-to-income ratio you are comfortable with. Adding a mortgage payment of $1,200 brings your new debt payments to 30% of your monthly income. In the above scenario, there are various types of home loans for which you can qualify, including FHA loans, which have an average ratio of 28% for housing payments (the front-end ratio) and 41% for total debt payments (the back-end ratio), as of the first quarter of 2014. Further, FHA loans allow for low down payment options. The average conventional loan has a front-end debt ratio of 22% and a back-end ratio of 34%. You went to college to get ahead — don’t let student loan debt hold you back. Applying for a mortgage and finding the home that is right for you is a complex process, but I am here to help. Even if you believe you have to pay down your debt before buying your first home, contact a mortgage professional who can show you exactly what it will take to become a homeowner.

Looking to Buy a New Home in 2016? Follow These Easy Steps!

1. Improve your creditworthiness Your credit profile is important to a lender. While you're preparing to buy a home, be sure you're responsibly managing your current debt. Always pay your bills on time and chip away at your outstanding balances by paying more than the minimum. In most cases, lenders like to see a borrower with a debt-to-income ratio of 36% or less. 2. Save for a down payment Although a 20% down payment on a mortgage is ideal, it's not mandatory. Many lenders expect buyers to put down at least 3%, aside from the Federal Housing Administration, which requires a 3.5% down payment. However, if you're interested in building sizable equity right away, stash a hefty amount of cash to take to the closing table. Additionally, do your due diligence to find out about any local down payment assistance programs. 3. Seek preapproval Before you rush into house-hunting mode, get a mortgage preapproval. This process is used to help determine how much money you're qualified to borrow for a home purchase. Once you're preapproved, you'll have a more realistic expectation of which for-sale houses fall within your budget. You may qualify for a loan that is roughly 3 times your gross annual income. 4. Shop for a lender The home buying process involves more than just chasing a favorable interest rate. You have to find the best mortgage lender for your financial situation. No two sets of lender fees are alike, so it's important to get loan estimates from multiple lenders before making a decision. But the most important thing is realizing that individual brokers will provide you and your family with a more personal service, whereas most banks do not have a lot of the extra time to do so. Check out our website and get access to a personal loan officer who can answer your questions. 5. Research loan types A fixed-rate mortgage isn't right for every homebuyer. Neither is an adjustable-rate mortgage. If you plan to stay put in a home to raise a family, you might consider a 30-year loan. Conversely, if you're moving in 10 years or less, an adjustable-rate mortgage, or ARM, could better suit you. Interest rates on ARMs are fixed for the first several years of the loan and often start out lower than rates on 30-year fixed loans. There are also jumbo loans, which are typically used to purchase luxury homes. 6. Consider your lifestyle When you purchase a home, you're also investing in the community that surrounds it. More importantly, your home becomes central to every other aspect of your life. As you shop for homes, consider your work commute, nearby schools and any extracurricular activities in which you and your family might participate. 7. Remember to budget Your monthly mortgage payment won't be the only expense you have as a homeowner. There's also homeowners insurance, property taxes, maintenance costs and, more than likely, homeowners association fees, which is why it's necessary to stick to a budget. See what you can afford here. 8. Consult a professional The homebuying process is a challenging one, which is why it helps to have the assistance of qualified professionals. Ask questions of your lender and real estate agent, and reach out to a local lender who is qualified and has expertise in the area you are looking to buy in. Visit us at www.txpremiermortgage.com. 9. Don't forget the closing costs Not only do you need a solid down payment for a home purchase, you'll have to pay closing costs. The loan estimate you receive after applying for a mortgage gives you an idea of the "cash to close," or the money you need to complete the transaction. There are some closing costs for which you can shop and save money, and others that are fixed. 10. Beef up your savings account It's unwise to drain your savings to fund your down payment or closing costs and leave nothing in the account to cover emergencies. A useful rule of thumb is to stockpile 3 to 6 months' worth of living expenses. This deters you from tapping credit cards or loans and amassing more debt. Last but not least, be sure to make 2016 a great year and start it off with experiencing our A+ red carpet service which we provide to all of our clients! We would enjoy helping you and your family be able to make your new home dreams come true!