Preferred Properties of Texas

The Preferred way to buy & sell real estate for you

First Time Mortgage

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The process of buying your first home can be exciting and complicated. There are many things you need to know. The mortgage is one of the most important but also the most confusing item on this list.

We covered the basics of a mortgage in one of our articles about first-time homeownership. In this article we will go deeper into the subject and offer some tips and tricks to help you get through the process.

What criteria must I meet to get a first mortgage?

To be approved for a mortgage, homeowners must meet certain requirements. According to Investopedia, certain lenders offer Special loans and benefits for first time homebuyers

Many people are surprised to learn that there is a general definition for what a “first-time homebuyer” is. To be approved for loans for first-time homebuyers, you must meet these terms. The U.S. Department of Housing and Urban Development (HUD) has established the criteria.

  • Who hasn’t owned a primary residence for at least three years?
  • An individual who is the sole owner of a residence that is not permanently attached to a foundation
  • A single owner who has owned only with a spouse
  • An individual who only owns a property that is not compliant with building codes

There are many loan programs that can help you purchase a home if you fall into any of these categories.

Additional requirements must be met before a mortgage can be approved

Other than the requirements above, you will need to prove your income for at least two years, a down payment of 3.5% and a credit score below 620. There are many programs that will allow first-time buyers purchase without requiring them to meet these requirements.

What are the best mortgage options?

There are many mortgage options. The most popular type of home loan is the 30-year fixed mortgage. This is a traditional bank private loan. There are many other loan options. Check out the top-rated types to find one that suits your needs.

1) Federal Housing Administration loans (FHA): Insured Mortgages that require 3.5% down FHA loans are more competitive than conventional loans because they have lower interest rates, smaller downpayments, and lower closing costs.

2) U.S. 2) U.S. Department of Agriculture loans: This loan program for homebuyers is aimed at rural homes and comes with fixed payments.

3) U.S. U.S. Department of Veterans Affairs loans (VA): These loans are available for military personnel with no down-payment, including veterans and active-duty military personnel.

4) First-time homebuyer programs in Many states offer local lenders that are more suitable for the borrower’s location than national lenders. NerdWallet offers a comprehensive guide to first-time buyer programs for each state.

5) Home Renovation Loan: This loan is for homeowners who are looking to purchase and remodel their home.

6) Fannie Mae loans and Freddie Mac loans: Created in Congress, Fannie Mae loans and Freddie Mac loan are the backbone of our housing finance system. They support conventional loans with only 3% down.

Find the perfect property!

There are many options for mortgages for first-time buyers. It is important to research your options and consider your needs before you choose the right mortgage.

Contact Preferred Properties of Texas  

 

 

Original blog: https://www.landhub.com/land-news/mortgages-for-first-time-homeowners/#comment-13055

Still Renting?

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Each person has to ask the question, “Should I buy a home or rent one?” If you don’t have a mortgage or aren’t familiar with the process, it can be daunting to owning a home. Many renters believe they cannot afford to buy a home due to not having the right kind of job or the funds. No matter what your thoughts about owning a house or renting, we can help you to overcome any doubts and false assumptions.

It is easy to own a home. If you are planning to live in your home for at least 2 or 3 years, it is a smart financial move to purchase instead of renting.

Most people realize the financial benefit of owning a home after they have lived there for between 3-5 years. This depends on the price of the house.

You have so many advantages to being a homeowner

  • You are in control of the style and design aspects of your home.
  • Fido and Fifi, Tigger, or any other pet, are allowed to stay with you. No pets allowed in your home. Pet deposits are not required.
  • No deposit. You don’t have to worry about paying 3 months rent or whether your landlord will retain your deposit when you move out.
  • If you take care of your home, you don’t have to worry. You are the owner of your home. This means you have total control of how your home looks. There’s no need to wait for approved maintenance men to come by at unfavorable hours or at all.
  • Avoid sudden rent and utility expense increases. Renters who have ever rented know that they can be notified by the landlord that additional charges will appear on their next rent/utility bill. You may find yourself in a difficult situation when your yearly lease is due to expire. You may also find that your monthly bill comes with “additional” fees.
  • There is no reason to be concerned that your rental home may be sold. This is a real possibility. It can be frustrating to finally feel at home in a place and to then discover that the owner has decided it is time to move on.
  • You can build an asset that can help your financial goals over the long-term by planning and buying smartly.
  • Renting is a great way to generate additional income. Consider adding your home to a larger retirement plan once you have lived in the house for some time. Your home can be used to earn rental income, long-term or short-term. Passive income can be a very exciting possibility that I would love for you to explore.

Most people aren’t able to become homeowners because of these excuses.

You don’t need any money to pay down a mortgage payment. If you have at least $1000 in savings, two years of work history, and are either a first-time home buyer or have never owned a home for three years, you may be eligible to receive down payment assistance. For low- and middle-income households who wish to be homeowners, there are many programs.

Bad credit. You can get help from a caring, knowledgeable loan originator to repair your credit. You can raise your credit score by as little as 2-6 months and qualify for a mortgage. It takes only a few months to get your credit score up to 640 and qualify for a mortgage.

Locked into lease agreements The realtor or loan originator can help you pick a closing day that allows you to live in your new home for two months without paying a mortgage. Save the money to pay off your lease. You should also consider the time required to close on a house. It is possible that you will have to wait between when you submit your offer and when it is time to make your first payment on your mortgage. The monthly mortgage payment will likely be lower than the rent. Plus, you can stay in the house for up to two months without having to make any payments.

You haven’t been at your current job for a while or you are self-employed.

The key is two years.If you’ve been working in the same type of job for at least two consecutive years, you may apply for a loan. It is not necessary to live in the same company or location, but you must have worked in the exact same job field for at least two consecutive years.

Self-employed must have at least two years of tax returns showing enough income. You may need to take some deductions depending on your circumstances so you can show the right income.

I hope you found this helpful and that it has shown you how easy it can be to become a homeowner. A little preparation and planning can make it possible to buy a house in two months to two year.

When your ready to buy a your home give Preferred Properties of Texas a call. We Love To Help!

Looking For A Bigger Home? Why Not Get It Now?

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Are you currently clamoring for additional rooms or some more practical floorplan on your residence? Perhaps it’s time to create a move. If you will have the ability to work remotely to your long term or your overall requirements have only shifted, it is a fantastic time to sell your home and proceed up. Why? With mortgage rates in their favor and higher-priced house earnings powering more moves throughout the nation, sellers in the current marketplace are discovering the distance they desire (and have always dreamed of) by buying a house in the top end of the home industry.

With this few houses available for sale and higher demand from today’s homebuyers, sellers are now profiting from significant ways this year. Bidding wars are gaining traction, forcing the selling price of an increasing number of houses around the nation. This means sellers can leverage additional money from higher-priced sales while also benefiting from the low mortgage rates whenever they buy their next house. It is the ideal situation to maneuver into a genuine dream house.

The Institute’s current study of earnings in 2020 for houses over 5,000 square feet encourage the ongoing preference for bigger houses. The study determined that there was a 17 percent gain in the amount of 5,000+ sq ft homes marketed compared to the amount of earnings from 2019.

Luxurious home costs continue to view record highs in nearly all wealthy ex-urban communities, since the effect of having the ability to work at home remains driving buyers from residing in high density locations. Low interest rates also stay in play, enabling buyers to realize that the significance of owning a bigger house, which further strengthens this tendency.

Although this budget certainly does not match every budget, even if it is in your reach this summer, you might choose to create your move earlier rather than later. Nowadays, more homes can be found in this sector of the current market, but as the report cites, more buyers are investing here too, so competition might heat up earlier rather than later.

If you’re planning to sell your current home to move into a larger one, let’s connect today. We’ll discuss your current situation and the opportunities in our local market.

 

 

Land Loans

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If it comes to funding your property purchase, obtaining the funds is not always quite as easy as it might be if you’re purchasing a property using a traditional mortgage. Classic mortgage choices are tough to come by for property loans, and creditors that do provide them often tack on higher rates of interest and shorter pay-back intervals –either of which may be difficult to handle, particularly if you’re buying on a budget.

Thus, what would be your next best choices? Many borrowers use private or government loans to fund their purchases, which provide a little more flexibility once the large banks are not a fantastic fit. Which one is ideal for you will depend on your eligibility, where you are purchasing, and what your present financial situation resembles, but here is a glance at what a few of your accessible property loan choices may be.

Government Loans:

FSA loans– People that are purchasing property for farming or ranching purposes might be qualified to get a low-interest FSA loan via the USDA Farm Service Agency’s Farm Loan Program. These comprise both farm ownership loans for enlarging existing possessions and microloans for beginning and small farmers, and targeted loans for minority and women farmers and ranchers.

USDA building loans — If you are purchasing land to reside in a rural area, check to find out whether you qualify for a USDA Construction Loan, that can help you cover both the land and the structure which you mean to construct there. You will simply be on the hook for interest payments while your home property has been built, and the loan will change over to some traditional home loan with both the interest and principal payments due every month.

Federal and state licenses — While not loans per se, it is well worth checking to see whether you are eligible for any state or federal grants to your property buy. You will find plenty to go about, covering matters like property conservation, developments, and agriculture, and you can have the ability to detect grants via private organizations too.

Personal Loans:

Home equity loan — Should you’ve equity via an present traditional mortgage then you might have the ability to find positive rates on a house equity line of credit–also called a HELOC. From that point, you may use the charge as you see fit, such as for buying land.

Seller funding — There is a possibility your vendor is receptive to working with you straight on funding by expanding credit on your purchase. Bear in mind that this course usually demands the vendor owns the property , and you will certainly need a lawyer to check over the contract before you register to make sure it is air-tight.

Bank loans for property may not be as valuable as they are for conventional home, but they’re readily available. Types include:

• Raw land loans for entirely undeveloped properties.

• Unimproved property loans for largely undeveloped properties–i.e. Those which are mainly raw but might have some utilities prepared to go.

• Improved land loans for property that’s very good to go with utilities and access points.

Generally, the further unimproved the land that you would like to purchase, the riskier the loan and the greater the rates of interest will be. Be certain that you look around, and expand your search to small banks, which might be more receptive to funding your property investment.

Costs Associated With Buying a Home?

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When you stumble across a favorable mortgage deal, you may think,”Good! I can manage my dream home.” You could be able to, however, the expenses associated with buying a home go beyond the mortgage payment. To determine how much house you are able to afford, it is important to factor in additional expenses, such as closing costs, taxes and insurance, before committing to a mortgage.

Complete Costs of Buying a House
Matt Hester and Ross Hester, father and son co-founders of The Hester Group, Harry Norman Realtors in Atlanta, Georgia, encourage all their customers to prepare for the funds needed to Buy.

“If you do not consider all of the expenses, your monthly expense budget could be flipped on its head,” Matt Hester says.

These costs include:

Down Payment
The deposit is the section of the property’s purchase price you pay upfront, instead of financing it through a mortgage. If you’re buying a $200,000 home, as an example, and put 10 percent, or $20,000, you’d be getting a mortgage for $180,000.

If you choose a traditional or FHA loan, a deposit is necessary. The amount of the down payment that’s required is based on the home’s price and property type, as well as the loan merchandise.

For a traditional loan, how much depends on the lender and loan type–you could put down 3%, 10%, 20% or more. With an FHA loan, you could be able to put down as small as 3.5 percent.

It is necessary to be aware there are loans with no down payment demand: USDA loans, for borrowers purchasing in specified markets (generally rural), and VA loans, for eligible service members and veterans.

Closing Prices
To shut your home loan and receive the keys to the property, you’ll need to cover closing costs, that are all the charges associated with the mortgage. These vary typically from 2% — 5% of the loan principal, and can include:

–Application fee
— Appraisal fee
— Credit check fee
— Origination and/or underwriting fees
— Title insurance policy
— Title search fee
— Transfer tax (if applicable)
“There are quite a few standard closure table items for which the real price will vary based on the value of the home and also the partners that you work with,” Ross Hester says.

If you’re lean on savings, but many lenders provide a no-closing-cost mortgage alternative, where the closing prices are added to your loan or otherwise paid for in the form of a higher interest rate. Save you from having to bring money to the final upfront, but might cost you more in the long run, particularly in the event that you intend to stay in the house long term.

Real Estate Taxes
In most places, your county or city government requires you to pay property taxes on your home for as long as you have it. Typically, property tax is included in your monthly payment, but separate from the interest and principal.

For instance, if you own a home with an appraised value of $100,000, and the tax rate is 2 percent, your yearly property tax would be $2,000, paid in $167 increments added to all your 12 monthly mortgage payments throughout the year.

Remember that the assessed value is not the same as the cost you’ve paid for your home. If home values move up on your area, your county or city could assess your house in a higher value, which means that you’ll spend more in property tax.

Homeowners and Mortgage Insurance
When purchasing a home, there are two kinds of insurance to consider: homeowners insurance and private mortgage insurance, or PMI.

Homeowners insurance protects you financially out of unexpected events which damage your house, like natural disaster, theft or vandalism. Though homeowners insurance isn’t required by legislation, most mortgage lenders require it in some kind. The cost significantly varies, and there are lots of options, so it is best to compare supplies to keep the cost as low as possible.

If you get a traditional loan, PMI is generally required if you put less than 20% down. This type of insurance protects the lender should you default on the loan and can substantially boost your mortgage payment. According to the Urban Institute, yearly PMI premiums range from 0.58% to 1.86% of the amount of the loan.

PMI is not permanent, yet. As you pay off your mortgage and build equity in your house, you can remove PMI.

HOA Fees
If you are buying a condominium or another kind of home in a community overseen by a homeowners association (HOA), you will likely be asked to pay a monthly fee, also known as an HOA fee. HOA fees are determined by the association and highly variable. These funds go toward the professional services that the institution provides, which may include security, a pool or gym and landscaping and upkeep.

HOAs can also charge occasional special assessment fees for urgent repairs. These financial obligations might be overlooked when buyers tally up the costs of purchasing a home, but they accumulate fast.

Home Maintenance, Repairs and Utilities
Wherever you reside, you ought to plan for home repairs and maintenance. Wear and tear occurs, therefore it is important to have additional money available for fixing or replacing appliances and important structures and systems, such as the roof or HVAC.

Many experts recommend budgeting 1% of your home’s worth for house maintenance every year, in addition to maintaining a crisis fund to address urgent, non-budgeted concerns as they crop up.

You’ll also have to cover utilities, probably including water, sewer, gas and electricity. These costs vary according to location, however, the general rule of thumb is that the bigger the property, the more utilities will cost.

Home Prices Today
The price of the house you buy is undoubtedly a big factor in your overall expenses. If you’re looking to purchase a house now, expect higher prices and tougher competition. As of March 2021, the median existing-home cost was $329,100, according to the National Association of REALTORS®, a 17.2% increase from the exact same time a year ago. Present single-family home costs were at a record high of $334,500, an 18.4% hike from this past year. Meanwhile, the median cost of a new-construction home was $330,800, as stated by the U.S. Department of Housing and Urban Development.

Keep in mind that home prices on your market may be much lower or higher than these national figures, and also the price that you’ll pay also depends on the sort of property you purchase.

The costs of purchasing and owning a home can add up fast, so it’s important to prepare. You’ll want to save money, enhance or maintain your credit and also compare creditors to find the best mortgage rates possible.

If you have questions about where to start contact our office and schedule an appointment with one of our knowledgeable agents. We are here for all your real estate needs!

Understanding Escrow Accounts

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All mortgages require a monthly payment. Normally, the monthly payment is made from the principal repayment, prorated property taxation, prorated homeowner’s insurance coverage and interestrates. Of them, your premiums and insurance obligations are held in a trust account with the creditor, called the escrow accounts. If you refinance a mortgage, present credit card accounts are often closed and a new one is opened unique into the brand new loan.

To better understand the benefits and pitfalls of escrow accounts and how they operate, browse below.

Recognizing Escrow Accounts. When you cover your monthly mortgage payment, then your own insurance and taxes are stored in an escrow account held by your mortgage business. Whenever these invoices are expected, the lender is accountable for paying them in a timely way. Some lenders require that you open an escrow accounts to be able to give you the loan others will allow you to cover the bills yourself.

The Preceding Escrow Account. If you refinance a loan, then the first escrow accounts stays with the loan. Escrow funds, regrettably, cannot be transferred to fresh loans, even if it’s with the identical lender. All of the property insurance and tax payments you’ve made to this account, because the previous payment has been made, will be returned to you, typically within 45 days through wire transfer or check.

Utilizing Old Escrow Funds. Since the capital will be delivered to you at a subsequent date, it’s typically not feasible to utilize held lien funds from a former loan to apply your new escrow accounts on the refinanced loan. This may ask that you produce more money at closing to finance your new bank account and, depending on the time of year which you’re refinancing, the creditor will need a considerable amount in taxes to be prepaid into escrow.

Advantages of Escrow Accounts. If you decide to use an escrow accounts for the loan, you might be given a lower rate of interest. The lending company gets responsible for paying your quarterly real estate taxation, in addition to obligations for your homeowner’s insurance, preventing you from needing to remember to cover them. Because of land taxes being financially problematic in certain towns, having the ability to divide the sum due into 12 equal payments makes it less difficult to manage for many people.

Selecting a Escrow Account. When picking about an escrow accounts in your own loan, remember that with no escrow accounts, the final costs will usually be lower as you aren’t depositing money for potential property tax or tax premiums beforehand.

On the flip side, with no escrow accounts, your lender may charge you a lien charge or a higher rate of interest on the loan because their risk increases since they’ll be relying upon you to make timely payments for real estate taxes and homeowner’s insuranceplan. In the event you decide to cancel an escrow accounts and you fall behind on taxation or homeowner’s insurance premiums, you can face substantial penalties and late fees. You can lose your homeowner’s insurance policy, and the tax assessor can place a lien from the property. At worst, you can face foreclosure. All this would endanger the creditor’s investment in the house.

 

Preferred Properties of Texas

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