mortgage Archives - Preferred Properties of Texas Home & Ranch Properties Stephenville

Buying Your First Home? Know These 3 Things

April 4, 2023 by chorton Leave a Comment

It is a joy to work with first-time buyers. I love helping first-time home buyers find their first home and teaching them the process of buying a home. These are the three things you need to know before you begin looking.

1. Only work with one agent. It is best to work with one agent for your real estate search. Your agent will work with you to find the perfect property and negotiate all terms for your transaction. It is important that the agent gets to know you personally and your family so they can negotiate on your behalf. Remember that an agent who shows you a house is ethically the one who should handle the transaction. You are also dealing with the seller’s agents if you call an agent through a yard sign. Although most professionals can handle both sides of a transaction professionally it is more beneficial to work with someone you know well and who will look out for your best interests as the buyer. Your agent is not paid; the seller pays him or her upon closing. You are still hiring an agent to work for your business. Therefore, it is important to interview as many agents as possible and to choose the one you like best.

2. Pre-approval is required for financing. A lender must be pre-approved unless you plan to pay cash for your home. It helps you to set a realistic price range for house hunting. Frustration can result from looking at houses you cannot afford to buy. The mortgage lender will tell you how much you can borrow and also what your monthly payment will be. They will also give you information about closing costs and what you should do to protect your eligibility during the loan process. A current pre-approval is important to ensure you don’t lose your chance to buy another house. You will need to make an offer on the house you have found. The pre-approval letter must be included with your offer. I am happy to give you the names of local mortgage lenders who have been great to my clients.

3. There are some upfront costs. After you have found the perfect house and agreed on the terms and price, and signed the contract, it is time to pay your escrow deposit, also known as “good faith”, deposit. If you cancel the deal due to reasons not covered by the contract, this is money that you risk. It is usually between 1% to 5% of the sale price, but it can vary depending on the terms you and the seller have agreed to in the contract. During negotiations, your agent can help you with this. The escrow deposit is a part of the final sales price.

4. A certified home inspector should inspect the property. The cost of this inspection varies depending on how large, old, and what features the property has, but it is typically around a few hundred dollars. This amount will be due at the time service is rendered. Based on the results from the first inspection, you may choose to pay for additional inspections. If the inspector finds a problem with your HVAC system, you might need to pay a fee to have an HVAC contractor inspect it. To be able to move forward confidently with your purchase, you want as much information as possible during the inspection period.

5. A survey and appraisal of the property will be required. These costs are added to closing costs and should not be paid upfront. In the unlikely event of closing, however, you might be asked for a credit card number.

All of these steps will be covered during your home-buying journey. Are you ready to get started? Give Preferred Properties of Texas a call!

Consider A Few Things Before Buying Something AS-IS

March 9, 2023 by chorton Leave a Comment

You might come across listings that advertise a property as-is if you are looking for a new house. It’s an option for sellers who want to sell quickly.

The homes are often less expensive than comparable properties for buyers.

There are many benefits to buying a home in its current condition, especially in this competitive housing market. However, it is important to fully understand the implications.

Sellers list their house as-is and will not make repairs or modifications before they close on the property. Sellers cannot guarantee that everything will be in good condition or working order. A Seller’s Disclosure is not required.

It’s your responsibility to repair any problems that you find after you purchase a property advertised as “as-is”.

A seller selling as-is must still meet minimum disclosure standards in each state and federal. These standards will inform you about lead paint conditions.

A home being listed as-is does not necessarily mean that it is inoperable. A home can still be listed as-is, even if it has minor or major problems.

This could happen when a seller is in financial distress or if they are in a hurry and don’t have time to wait for contractors to complete even minor cosmetic work.

It’s possible that the home is no longer livable in its current condition. Your lender might not be happy with you making the necessary repairs.

Certain livability requirements are required for many types of loans. These minimum property requirements are also known as MPRs. These MPRs will be assessed by appraisers.

Conventional loans are not guaranteed or insured by the federal government. Fannie Mae, Freddie Mac and many other conventional loans conform to these criteria. Fannie Mae or Freddie Mac homes can be bought if they have minor problems. The house must be safe and any structural problems should be normal wear and tear.

You might still be eligible for a conforming loan for as-is property if you have plumbing leaks, interior damage, or missing light fixtures.

The MPRs for government-backed loans like VA loans are more stringent than other types.

An inspection is required if you are interested in purchasing a home as it stands. An inspector will help you to understand the problems and let you know how much it might cost to fix them.

A inspection is not required for an appraisal.

A lender will usually require an appraisal to determine the property’s value. You might choose to have a home inspection.

Sellers can refuse to inspect a property as-is. This is a red flag.

A home being sold “as-is” does not necessarily mean that it is complete. A seller could list a property as is but refer to only certain parts. Broken pools and sheds are often partial features that can be added as-is.

Ask the seller what they mean by “as-is.”

You don’t have to waive your right for disclosures when buying an “as-is” home. You must be aware that the sellers are bound by federal and state regulations regarding disclosures about any issues in the house.

Each state has its own disclosure laws. Some states, for example, have water damage disclosure regulations.

You may be able sue a seller if they fail to inform you about a problem in your state.

Lead paint is the only federal disclosure requirement. The seller must disclose if the home was built prior to 1978.

If you are considering buying a home as is, a good agent can help. An agent who is knowledgeable about disclosure laws can help you understand what the implications are for buying as-is.

These can make you more confident about your purchase decision, or help you decide when it’s best to not buy.

Original Blog: https://realtytimes.com/consumeradvice/buyersadvice/item/1044463-what-does-as-is-mean-for-buyers?rtmpage=

What Happens After A Pre-Approval And Can You Still Be Denied?

March 2, 2023 by chorton Leave a Comment

Pre-approval is essential when you are ready to purchase a home. Talk to a lender, who will review your situation and give you a preapproval letter. This letter will help you determine your monthly budget and what amount of payment you can afford.

Before approving your mortgage, lenders will consider several factors.

Pre-qualification and pre-approval are not the same thing, although they are sometimes used interchangeably.

A pre-qualification is a detailed overview of your financial situation. It focuses primarily on your income and your debts. The lender will then provide you with an estimate of the loan amount.

The lender won’t verify any information that you provide. A pre-qualification can help you determine your budget and help you start looking for houses. However, it does not carry any weight once you make an offer.

You provide financial information to a lender to pre-qualify. However, you will actually fill out your mortgage application to get pre-approved.

Your Social Security number is required. The lender will then conduct a hard credit assessment. Your lender will request that you list all assets, liabilities, income, employment, and bank account information.

The primary goal of a lender during pre-approval is to make sure you can repay the loan.

The information is used by the lender to calculate your LTV or DTI ratios. These information are used by the lender to determine the right type of loan and the interest rate.

After an appraisal has been completed and the loan applied to a property, your final loan approval will be granted.

Pre-approved means that your loan file is sent to an underwriter. An underwriter will also verify your documentation in relation to your application. They will verify that you meet the requirements of a loan program.

Your lender will verify your eligibility for a home loan by underwriting. An underwriter is responsible for ensuring that a property meets the loan requirements. The ultimate decision-maker, the underwriter, must follow certain guidelines but has some flexibility in other areas.

Although underwriting timelines may vary, approval of an initial file can usually be granted within 72 hours. Rarely, however, underwriting approval can take up to a month.

Your financial situation is examined by underwriters. After reviewing your file, they will issue conditional approval. The underwriter will approve you if you meet the conditions.

Underwriting can deny a mortgage, although it is rare.

An underwriter can deny you a loan if there are several reasons.

If you are declined in underwriting, your loan officer should explain why. It’s possible to appeal their decision, but it is not final until you receive a denial notice.

You can always check with other lenders if you’re turned down by underwriting. One lender may turn you down, but that doesn’t necessarily mean they will all give you the same answer. Some lenders offer manual underwriting options that allow them to approve loans, while others don’t.

Avoiding being denied underwriting is as simple as clearing up your finances. Also, make sure that you don’t borrow more than you can afford. Also, ensure that your loan application is accurate and complete. So that there are no surprises during underwriting, you want the lender to have a complete picture.

Original Blog: https://realtytimes.com/archives/item/1044797-can-a-mortgage-be-denied-after-pre-approval?rtmpage=

Waiting For 3% Mortgage Rate Might Just Be A Mistake

January 27, 2023 by chorton Leave a Comment

The Federal Reserve took steps last year to reduce inflation. The mortgage rates rose rapidly after the 2021 record lows and reached a peak of just over 7% in October. Some buyers felt a decrease in their purchasing power and decided to halt their plans.

The rate of inflation is beginning to fall today. As a result, mortgage rates are now lower than last year’s peak. Although mortgage activity has declined significantly over the past year, inflationary forces are decreasing and should result in lower mortgage rates for 2023.

This is great news for buyers who are looking to get back in the housing market. A drop in mortgage rates can help boost your buying power and lower your monthly mortgage payment. The lower mortgage rates experts predicted this fiscal year may be what you need in order to rekindle your passion for homebuying.

This opens up opportunities for you but don’t expect rates dropping to records lows, as we saw in 2021.

It is important to have an accurate vision of what you can expect for the next year. Expert real estate advisors are critical. A slight drop in mortgage rates can have a significant impact on your budget. You can purchase a home today if you are ready. Today’s market offers the chance to get a lower mortgage rate, find your dream house, and face less competition.

Although the recent decrease in mortgage rates is good news, it is not a wise decision to wait for 3% if you are ready to purchase now.

Let’s talk about how rates today can impact your goals and discuss your options in this area. Contact Preferred Properties of Texas today to speak to one of our knowledgeable agents.

Original Blog: https://www.keepingcurrentmatters.com/2023/01/17/think-twice-before-waiting-for-3-mortgage-rates/

Hybrid Loan

January 26, 2023 by chorton Leave a Comment

I will be the first person to admit that the mortgage and real estate industries have their own word salad. Different words and terms can mean different things depending on their context. This is true for the mortgage industry as well. The term hybrid is still very much in use, but it can cause confusion for some as it relates specifically to getting a mortgage.

What is a hybrid? A hybrid is an amalgamation of several characteristics into one entity. Hybrids are found in automobiles. Food and agriculture also have hybrids. Any industry can boast a hybrid. Hybrids are also common in the mortgage industry.

As we have said in the column, home loan terms can be divided into two categories: adjustable and fixed. Fixed loans have an interest rate that is fixed and does not change over the term of the loan. A variable loan allows the monthly payment to be adjusted based on previously agreed terms. A variable rate mortgage or ARM is one where the monthly payment can be adjusted based on previously established terms.

An ARM must adhere to certain rules. Paying attention to the basic index within which the ARM is tied is important. Then there’s also the margin. The margin determines the amount of adjustment time that the new rate is allowed to change. There are also rate caps that limit the rate’s ability to change when adjustments are due. Hybrids weren’t mentioned, however. If hybrids are a “thing”, where does that leave the mortgage business?

An ARM is a hybrid that has its base in a hybrid. Why the hybrid label? When rates were relatively high, hybrids were a popular option. The hybrid rate starts at slightly less than similar ARMs.

A hybrid loan has an initial period during which the loan is locked for a set period. The rate for a 5/1 hybrid is five-year fixed, and the one indicates when adjustment can be made after that initial period of five years. The rate could change after five years, but only once every year. These loans often use caps to limit how much the rate may change after each adjustment, which is usually five years.

Why would someone choose a hybrid? The initial rate will be lower than current market fixed rates. Many people may be aware that they will likely move before the five-year term ends. Personally, I prefer stability and security from a fixed. However, hybrids can be useful in certain niche situations.

Original Blog: https://realtytimes.com/archives/item/1046345-here-s-one-for-ya-hybrid-loan?rtmpage=

Starter Home… What Does That Mean?

January 17, 2023 by chorton Leave a Comment

It is common to hear the term “starter home” quite often. But, as a buyer, you might wonder what that actually means.

You need to understand the basics of buying a home, as well as whether you should invest in your forever home.

You can choose to buy a starter home as a single-family or multi-family home, or even a condo. The average buyer will be able to afford a starter home, but they are likely to outgrow it. The cost of a starter home will be lower relative to the local market.

These homes can be small or large, and may also be older. These homes can also be brand new, but they are still designed to satisfy the needs of entry-level buyers.

While there aren’t all the features that you might want, you can see how a starter home would suit your needs in the short-term.

It is possible that you will stay in your starter house for life. On the other hand you might decide to move on to a better home or a more expensive one.

A forever home can be larger than a regular home, but it may also have more outside space or be updated. Some of the most desirable features in a forever home are those that make it attractive and competitive. For example, it might have a large, private yard or be located in a great school area.

However, the definition of a forever home can be subjective. Some people may find that the home is where they can imagine raising a family. Others might prefer a fixer-upper in a great location that is in need of some TLC, but is still a permanent home.

While a forever home does not have to be extravagant, it is more spacious than a starter house.

There are pros and cons to both a starter or forever home if you are at the point of deciding whether it is worth your time.

A starter home is typically less expensive so that you can save more money for your down payment. This will allow you to start building equity faster. You’ll spend more time renting than you do investing in equity if you wait until you can afford a forever house. Once you are ready to purchase your forever home, the equity that you have will be able to use it as a financing source.

A starter home has the downside that it will likely be outgrown as you move on to a new phase of your life. A starter home may not be sufficient for your needs if you get married or have children.

You can either rent or sell your starter home if you decide to move. You will need to find a new home, apply for a mortgage and pay the closing costs.

There are many benefits to moving from the starter home to your forever home. You can feel secure knowing that you will be able to live in your home for the long-term without worrying about moving or selling.

It is possible to take your time and adjust slowly.

A forever home is more expensive. This means that you will need to save more money and delay building equity.

It is important to only spend what you can afford when buying a house. It is a good rule of thumb to not spend more than 28% on housing costs. Not only should you not pay 36% for debt, but also other loans and credit card debt.

It can be a wise move to buy a home that will last forever. If you sell your home too quickly after purchasing it, you might have to pay capital gains tax if its value increases. If you file your taxes separately, you can get a $250,000 exclusion and $500,000 if you are married filing jointly to capital gains on real property. If you have owned the property for less than 2 years, this exclusion is removed.

Before you purchase a home, consider the long-term potential value. It is important to find properties that are well-respected and have a high potential for resale, regardless of their price. You have to realize that sometimes what seems forever now may not be forever.

Original Blog: https://realtytimes.com/archives/item/1043899-what-should-you-know-about-buying-a-starter-home?rtmpage=