Posts Tagged ‘Mortgage’

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Preparing for a Home Loan: what your Lender will need

Monday, February 15th, 2010

Congratulations! You are well on your way to homeownership!

The first part of your journey is soon approaching: the loan process. In order for the application process to go off without a hitch, you will need to come prepared to your lender.

Your lender will likely require that you arrive with a set of documents that will verify your personal and financial information; without the required documents, the lender will likely not be able to approve you for a home loan.

One of the most important things to remember is that compiling and organizing all of your personal and financial documents takes time; so don

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Where the Mortgage Industry is Headed in 2010

Monday, January 25th, 2010

We are all more than glad to see 2009 come to an end. From the poor economic climate and credit crisis to the struggling housing market, 2009 doled out its share of frustration and heartache.

However, 2010 may finally give us a chance to pick ourselves up, dust ourselves off and move forward. In fact, it just may be the year to buy a house.

Home values have fallen back down to 2003 levels; mortgage rates are near historic lows; the government has extended the home buyer tax credit and opened it up to nearly all homeowners; and the foreclosure crisis has opened up some fantastic opportunities for home buyers.

There is one thing, however, that will certainly not change in the North Texas real estate industry, as well as across the United States: the credit situation.

In short, lenders are simply not going to open up their doors to anyone with less-than-perfect credit. In particular, don’t expect to secure a new home in North Texas unless you have a secure, stable job and a stellar credit report.

Other Trends we can Expect in the North Texas Real Estate Market in 2010:

  • Home prices will bottom out – If you’ve been one of those buyers waiting for prices to go lower, you may be waiting a long, long time. After the decline of home prices for nearly two years, it looks as though home prices will finally bottom out during the first half of 2010.
  • Foreclosures will continue to rise – With falling home prices and a tough job market, mortgage delinquencies are expected to continue.
  • More expensive homes will hit the foreclosure market – One of the biggest trends in foreclosures in 2010 will be the jump in foreclosures among the highest priced homes.
  • Mortgage rates will rise – Although mortgage rates will remain quite attractive in the upcoming year, they will not be at the rates we saw in 2009. Expect mortgage rates for a 30-year, fixed-rate mortgage to be about 5.5 percent by mid-year and about 6 percent by year’s end.

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Interested in a Short Sale? You may be Waiting Awhile

Wednesday, January 20th, 2010

With so many homeowners delinquent on their mortgages, the number of short sales hitting the market has increased dramatically, particularly over the last year.

Many buyers see this as a prime opportunity to get a great deal on a Dallas County home, but is the process of purchasing a short sale more trouble than it’s worth?

What is a Short Sale?

A short sale is essentially an agreement between a homeowner and his or her lender to sell a home for less than what is owed on the mortgage. These types of real estate transactions often save homeowners from foreclosure, but the amount of time it takes to close on a short sale has many buyers thinking twice about making an offer on this type of Dallas County property.

Short Sales Affecting Housing Market

Many real estate analysts see the lengthy process of closing on a short sale as greatly affecting the housing market recovery in many parts of the country. Short sales are essentially tying up the real estate market. The problem seems to be that banks are simply taking too long to respond to offers.

Banks are now trying to keep up with the soaring number of loan modifications and short sales, thereby leaving them unable to respond in a timely manner to offers. In short, lenders are simply unable to efficiently process the number of requests going through their institutions on any given day.

To put the short sale situation into perspective: the number of short sale requests has doubled on a national level in 2009, according to Bank of America.

Nationally, the number of short sales tripled to 40,000 for the first six months of 2009, compared to just a year earlier.

So, the question is: should you make an offer on a short sale?

Perhaps. If you are in a rush to move then a short sale property probably isn’t your best bet. However, if you have the time to wait out the short sale process then it may work for you.

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Homebuyer Tax Credit Extends into 2010

Friday, December 18th, 2009

Millions of first-time homebuyers throughout the country took advantage of the new homebuyer tax credit this year, and the good news continues.

Much to the relief of homebuyers, real estate professionals and lenders, the federal government just recently announced that they will extend the first-time homebuyer tax credit throughout April 2010.

There are other changes to the tax credit that has many people perking up their ears, as well. They include:

  • A 6,500 tax credit for existing homeowners who want to “move up.”
  • As of December 1, income limits for the first-time homebuyer tax credit rise from $75,000 for a single individual to $125,000, and from $150,000 for a married couple to $225,000.
  • A maximum cap of $800,000 for a home purchase.
  • A home buyer must have a sales agreement by April 30, 2010, and close on the property by June 30, 2010.

The new homebuyer tax credit, which is part of the overall federal stimulus package, has pumped more than $22 billion into the economy. In fact, the National Association of Realtors estimates that more than two million people (more than 200,000 transactions) took advantage of the tax credit this year alone.

It is clear that this incentive helped the real estate industry in general, so it only makes sense that the program is extended. For areas of the country that are still drowning in bank-owned homes, this extension could not have been better news.

The tax credit does extend to foreclosed homes, provided that the buyer will use it as his/her primary residence. The tax credit has also helped the housing market stabilize, which therefore helps local economies, such as Dallas County and Tarrant County.

The move to extend the homebuyer tax credit was also part of the unemployment benefits extension legislation. In addition, it doesn’t hurt that mortgage rates are still dipping below the five percent range.

The tax credit may extend longer for military personnel. Military personnel who are deployed overseas may have until April 30, 2011 to claim the tax credit, provided they are deployed overseas for a minimum of 90 days throughout 2008 or 2009.

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Why it Pays to be Preapproved

Friday, January 30th, 2009

Obtaining a mortgage loan is drastically different than it was even a couple of years ago. Banks and lending institutions are becoming increasingly hesitant to lend money due to the financial crisis gripping the nation and the only thing that less-than-perfect credit will get you is a rejection letter.

If, however, you have done your part by maintaining an exemplary credit rating and have pinched and saved for a substantial down payment (think 20 percent), then you may be well on your way to purchasing your first Dallas County home.

First Step: Preapproval!

An important first step in obtaining a mortgage loan is getting preapproved for a loan by a lender. For any first-time home buyer, this should precede any other moves you make, including looking for homes. A preapproval letter from a lending institution should act as your guiding light, so to speak.

A preapproval letter will not only show sellers that you are credit worthy and are serious about purchasing a home, but will also give you a clear picture of what size loan you can realistically afford. For example, let’s assume that Couple A and Couple B both want to purchase a home.

Couple A immediately heads to the financial institution of their choice and obtains a preapproval letter. Couple B skips this important first step and instead heads out to search for their dream Dallas County property.

Both couples end up falling in love with the same property, and both couples put in an offer.

Who do you think will get the house?

If you guessed couple A, you’re right. It is unlikely that a seller will accept the offer from Couple B because of the uncertainty of whether they can afford the home or even get approved for a mortgage.

Couple A, on the other hand, was prepared to make an offer, and the seller was comfortable accepting their offer because they were prepared and ready to own their first home.

The bottom line: make getting preapproved your first priority!

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Saving for your First Home

Tuesday, January 13th, 2009

If your dreams involve buying your first Irving home, then there are a few things you can do now to make your dream a reality.

Gone are the days of no-money-down mortgage loans, and most banks are now demanding at least 20 percent down on a traditional mortgage. On a $200,000 home, that equals $20,000.

For many, these numbers make owning a home feel unattainable, but it doesn’t have to be.

The following tips will guide you when saving for your first Irving home:

  • First things first: get a grip on your financial situation. That means laying out all of your bills and debts and creating a list of your monthly debt obligations.
  • Look for areas in which you can cut back, and be realistic. Is it really necessary to have an upgraded cable package, or can you downgrade to basic cable? Is your cell phone plan working for you, or could you potentially negotiate lower monthly payments? The key is to remain open, flexible and creative.

If you currently eat out four times a week, isn’t it realistic to cut down to just two times a week? Many of us have a considerable amount of wiggle room in our budgets, but we never take the time to find areas in which we can scale back.

  • Once you have located that extra money every month, consider having the money withdrawn automatically from your checking account or paycheck each month. Most people are more likely to successfully save money if they never see it in the first place.

Ask your employer if they can set up automatic deductions from your paycheck into a savings or money market account.

  • Open a separate savings or money market account for your down payment money and do not intermingle it with your other savings. This will allow you to keep better track of your savings goals.
  • Avoid investing your down payment money in risky investments. Instead, look for conservative investments, such as money market accounts, short-term certificates of deposit or short-term bonds.

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Are you Ready to Buy a Home?

Monday, January 5th, 2009

Everyone tells you to stop renting and purchase a home. It’s a sound, financial decision, they tell you. It’s a great investment, they cry. Wanting to buy a home and being prepared to buy a home are completely independent of one another, however.

Your desire to purchase a piece of Irving real estate can easily become overshadowed by your inability to purchase one. Before calling a real estate agent, there are a few, important questions to ask yourself:

  • Do I have a steady job? This is one of the first things a lender will want to know when you apply for a mortgage. Keeping a job for at least two years, or staying in a similar field for the same length of time, shows a lender that you are a good credit risk and that you’ll be able to pay your bills with a steady source of income.

Bottom line: if you’re in the market to purchase a home, now is not the time to change jobs. And if you haven’t achieved a steady work history, you’ll need to work on that before applying for a mortgage.

  • How is my history of paying bills? A good credit history is a must when applying for a mortgage, as a lender needs to see a steady history of paying bills. And that doesn’t just mean your car and credit card payments. What about utility bills? Medical bills? Student loan bills? If any of these have fallen by the waist side, immediately get them up to date and establish at least six months worth of on-time payments before applying for a mortgage.
  • How much debt am I carrying? Although you may be managing your debt and paying your bills on time, a lender will look at your “debt ratio,” which is essentially the ratio of money going out on loans and credit cards and money coming in through your salary. If your debt ratio exceeds a certain percentage (lenders vary on this), you’ll need to pay down some of your debt before applying for a mortgage.
  • Do I have enough money saved for a down payment? Gone are the days of no-money-down mortgages. With the current credit crisis, most lenders require at least 10 to 20 percent down. Once again, if you haven’t achieved this, take another six months or so and continue to save money toward a healthy down payment.

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Home Buyer Tips: Preparing to Buy Your First Home

Friday, October 31st, 2008

Congratulations! You’ve finally decided to make the leap from a renter to a home buyer! This time in your life can be exciting – and for good reason. Owning a piece of Highland Park real estate is one of the best financial decisions you can make.

In order to ensure that the process of purchasing your first home goes smoothly, and that you are prepared – both financially and mentally – for the process, there are a few steps you should take before attending your first open house:

  1. Contact a lender – Ask friends, family or your real estate agent for referrals, and research the interest rates for lenders in your area. Once you have chosen a lender, you can then begin by researching your options. This usually includes getting a copy of your credit report and clearing up any problems.

A lender will then help you figure out how much money you can afford to spend on a home. They will ask for information regarding your income, debts and savings, and will use this information to give you a clear idea regarding on how much home you can afford.

  1. Once your finances are in order, a lender will then “pre-approve” you for a mortgage. This will allow you to search for homes in your price range, and will also give you leverage with the seller when submitting an offer for a home. In other words, if two offers are submitted, and one buyer has been preapproved, they will likely accept this offer over one that does not have a preapproval letter from their lender.
  2. Narrow down your choices. Decide what you want in a home and then focus on homes which meet those criteria. Looking at homes which are either out of your price range or do not meet your criteria will simply exhaust you and prolong the process of finding your perfect home.

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Exploring Fort Worth

Wednesday, October 22nd, 2008

The City of Fort Worth has many homeownership programs which are designed to turn homeownership into a reality for many qualified buyers. First-time buyers can take advantage of the several housing assistance programs, which are made possible through federal, state and local funds.

Fort Worth Homeownership Programs include:

  • Closing Cost Assistance/Down Payment Assistance

First-time homebuyers – or those who have not owned a home in the last three years – may be eligible for

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Pre-Qualify before you Buy!

Wednesday, May 21st, 2008

The term

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