Home Mortgage Lenders: How to Make the Best Choice?

In the current market scenario, you can get a lot of options to obtain mortgage loans as a home buyer. Other than the conventional ways of taking out loans from banks and other financial institutes, you can also select a reputed lending firm. In fact, hiring a lending firm will be much more convenient for you. A firm can provide customized solutions to your financial requirements, based on your affordability. You can look out for the right home mortgage lender in Texas when you decide to buy a home there.

What are the different sources available for mortgage loans?

Lender: A lender usually assigns a loan officer who works as a mediator between borrowers and the lending firm. These officers act as the sales person who helps understanding the terms and conditions of various loan programs

Banks/Financial institutes: These are traditional financial institutions that offer mortgage loans on the similar ground as a lender. However, their lending rules are much stringent, and thus loan rejection is much higher. Real estate agency: A real estate agency offers various property options to homebuyers. It works as an intermediary between buyers and sellers. Though their main objective is to assist sellers in selling their properties at the highest possible prices.

In terms of a mortgage, with so many options available, it becomes confusing for homebuyers to make the best choice.

Depending upon your needs and affordability, a lender can help you get an ideal loan option that is likely to be satisfactory.

Tips to find a knowledgeable and trustworthy mortgage lender

• Get recommendations from the people you trust: You can always ask friends and relatives for suggestions, especially from those who have recently obtained a loan. However, you need to cross-check the references to ensure selecting the best lender that matches with your need.

• Observe the first-time response of lenders: You may get to know a lot from the initial response of a lender. The traits of a professional lender are prompt responses, friendly and courteous behavior, keenness to educate and explain processes to borrowers and answering all the queries.

• Check out reviews and credentials: Online reviews are good indicators of the customer experiences of working with a lender. You can also check the lender’s credentials to ensure it possess the required experience and skills.

• Do your homework: Do a thorough online research to avoid being misled by non-reliable sources.

The steps mentioned above can help you get a suitable lender that can help you find an ideal home mortgage loan.

Are you a first time home buyer?

Most people dream of owning a home of their own and spent years saving in order to do so. If you have a similar dream, then you should consider various factors including your monthly income, savings, and budgeting before purchasing a new home. If you are serious about buying your first home, start your process by exploring financing options such a mortgage rates and programs. Buying a new home requires research, guidance and adherence to guidelines and rules.

Mortgage rules vary from one state to another across the United States. Some states even offer specific mortgage programs for home buyers in those states. For example, a first time home buyer in Texas can get financing through Texas Bond Programs.

Apart from opting for the right mortgage program, by chalking out a plan, potential home buyers can accomplish their dream to become homeowners.

Work to Improving Your Credit Score
When you contact a mortgage company for mortgage loan approval, your credit score will be checked at first. In fact, your credit score plays a vital role in determining if you are eligible for the loan or not, what type of loan, and rates. Hence, before you talk with a lender, it’s better to check your credit score by getting the credit report yourself. You can order credit reports from AnnualCreditReport.com. It is a free service, authorized by the federal government. After you know your status, you can then work to clarify any errors or can pay off any outstanding debts negatively affecting your score.

Save well in advance
Typically, you need to pay between 5% and 30% as down payment to get competitive rates on mortgage loan. For this, you may have to work towards building up your savings. To do this, you may need to cut out all unnecessary expenses from your monthly budget.

Finding a reputed real estate agent
This step takes time as finding a reputed real estate agent can be difficult. Ask friends, family members, research references for a reputed real estate agent. A good way to verify the credibility about the agent is to explore the internet.

Secure a pre-approved loan
Once you know how much loan you can afford, only then you can begin to research and shop for a home that fits your requirements. You will need to thoroughly understand the types of loan options available to you, and compare rates and other aspects conventional and non-conventional loans.

Find the Home of Your Dreams
You can take the onus of looking around and finding a home yourself, but that could be a difficult task. It is advised to read and research online about a house by checking reliable databases.

Once you find a dream home, talk with a reputed mortgage company that can provide flexibility in terms of mortgage options and loan processing assistance.

Home buying requires discipline and patience. A reputed mortgage company can assist you with guidance on mortgage programs, application, and securing a loan, making the home owning process easier for you.

Know your options amidst the Boom in the Texas housing market

The home buying market in many parts of Texas is booming, limiting options for first time home buyers. Home prices rose by nearly 10% in 2013 in Texas, and the trend continues today. Properties are selling very quickly, many over the asking price with multiple bids driving prices even further upwards.

In the current scenario, home buyers have to make buying decisions quickly, while some others are left too afraid to take the risk. The last recession left such an impact on buyers that many have become tentative to invest in home buying, despite good credit scores. These buyers could benefit from learning about the various state and federal home loan assistance programs. In fact, there is more assistance available now than ever before.

Home finance options for first time home buyers in Texas
Some home loan programs make home buying easy for the Texas first time home buyer include:

Texas First Time Home buyer Program or Bond Program – This program gives a home mortgage to a qualified borrower at a competitive interest rate. Assistance for down payments and closing costs are also a part of this program. A person with low or moderate income can apply for this program.

Texas Mortgage Program or TMP-79 – This program offers home loan mortgages to Texas home buyers at a lower interest rate than other programs, as well as lower down payment and closing cost assistance.

Texas Department of Housing and Community Affairs (TDHCA) – If making a down payment is a problem, the “My First Texas Home” program can help you with down payment assistance. Borrowers with a credit score of 640 or higher with a total debt-to-income ratio of less than 45%, and a price which falls under the stipulated income and purchase price limit (county wise) are eligible for this program.

Assistance by the Texas State Affordable Housing Corporation (TSAHC) – The assistance from TSAHC for home buyers in Texas also aims at lowering their down payment and closing cost burden. However, interest rates offered by them are on the higher side.

To make sure that there are no regrets after you buy your first home in Texas, you need to consult a reputed mortgage company. In this way, the market conditions, pressure sales tactics or other reasons won’t affect your home buying process. Find a reliable mortgage company that will guide you in every step. Such a company can advise you on the most favorable government assistance options.

Loan Assistance Programs for the First Time Home Buyer in Texas

When you are a first time home buyer, various loan assistance programs are available that can enable you to afford your dream home. It can be difficult for potential homebuyers to find out various loan programs available. Even when a suitable loan program is identified, knowing the eligibility criteria and following the procedure can be difficult. That is why it is always a good idea to hire a reputed lending firm. Consulting with a loan officer can resolve many doubts and you get a loan that is best to fulfill your financial needs.

A highly experienced loan officer not only helps you find the ideal loan assistance program, he/she will also ensure that the processing of your loan is expedited. Some loan assistance programs include annual tax credits and down payment assistance programs for first time home buyers.

Annual tax credit for eligible home buyers in Texas
You can reduce your federal tax liability by $2000 per year with a Texas Mortgage Credit Certificate. This is an annual tax credit program designed for home loan borrowers in Texas. If you fulfill certain income, home mortgage loan criteria, you can get up to a $2000 tax credit annually. However, the condition is that the home you bought should be your primary residence.

This mortgage credit program is meant for veterans, first time home buyers and low income home buyers. If you fulfill all the criteria mentioned above, a Mortgage Credit Certificate will be given that entitles you for tax relief. The certificate can get 40% off for you on the annual interest that you pay on mortgage as a tax credit on Federal Tax return. This relief is available for your mortgage term or as long as the home is not your primary residence. Down payment assistance programs for Texas

Homebuyers can get down payment assistance and closing cost assistance for buying an existing home in Dallas, Texas. It is offered by the City of Dallas Housing Department. Eligible borrowers can get a down payment assistance of $8500 in the form of a loan, but without any obligation to pay interest. The loan balance needs to be repaid only in the case of the following three situations:

1. When you sell the home
2. If you transfer the deed
3. When you stop using the home as your primary residence

Besides using the funds for down payment, you can also use up to $4000 towards closing costs. Alternatively, $1500 of the loan can be used for minor repairs by complying with the City’s Minimum Housing Standards.

The loan assistance programs mentioned above are not easy to obtain as there are several procedures to follow that frustrate homebuyers. You need services of a capable lending firm to expedite the loan processing for you. At the beginning, they will tell you about all the financing options available, and the one that suits you best after assessing your current financial condition and affordability. Their expert guidance can surely help you get a loan approved in a hassle-free way.

Doing things right to get a mortgage loan

On May 12, 2014, the Morning News USA published an article regarding the mortgage interest rates in the US. The write-up mentioned how one of the bigger lenders in the nation has been able to retain mortgage interest rates for a 30 year fixed mortgage.

The current interest rate is offered by the lender for trading standard, long term and 30 year fixed rate mortgage loans at 4.5%, whereas the annual percentage rate is 4.673%. This is just an example that shows a trend in the lending market. These rates may marginally vary from one state to another.

Determining your loan requirement
Before you actually decide to apply for a mortgage, determine how much loan you can afford, and what kind of monthly payment is comfortable for you. There are various loan options that can fulfill your requirement. For example, if you are interested in taking a short term loan, you might opt for a 15 year fixed rate loan. Some borrowers even choose 10 year fixed rate mortgage loans. There are also loans based on adjustable interest rates. However, the loan types that fall under the conventional loan can be difficult for many borrowers to qualify.

The best solution to this issue is to find a lender that can guide you about the more flexible options with lower interest rates and lesser down payment requirements.

Doing these can make your mortgage process easier
Due to several reasons, you may find securing a mortgage loan a little difficult. The reasons could be fluctuating interest rates, low credit score, tight inventories in the housing market, or change in lending regulations. Regardless of the situation in the lending market or borrowers’ limited eligibility for receiving loans, the following tips could be helpful:

Get a Home Appraisal done
Getting the home appraised can give you a clear idea whether the property is overpriced or not. Hence, doing the appraisal soon after the offer of acceptance and letting your lender review it can help you renegotiate the pricing if the home price comes down in the future.

Arranging the Down Payment Early
Consult with your loan officer about making early arrangements for the down payment you need to make. In order to do that, try to put together funds in one or two accounts rather than moving them into several accounts. Thinking ahead will help you buy your chosen home without any difficulties.

When Changing Jobs
If you change jobs when the loan processing is in progress, keep your lender updated about your financial situation. You may have to submit the latest pay stubs and new employer information.

Clear your debts
It is suggested to pay off your debts. Pay taxes, insurance, and credit card bills on time. In the case of credit cards, using up your higher credit limits can affect your credit score. Hence, try keep to your debts as low as possible for a good credit report.

Getting a home mortgage loan is a delicate process, and requires detailed consultations, documentation, and evaluations. Hence, hiring an expert lender will always make life easier for you in terms of practical understanding of the entire process and getting a good home buying deal.

What the First Time Home Buyer in Texas Must Know

In the excitement of realizing their dream, first time home buyers can make some elementary mistakes. The falling housing market since the financial downturn of 2008 has made it even more difficult for them to choose a suitable home loan option as now they need to consider many variables for making the right decision. Some of these include their credit score, current income, type of property they want to buy, and of course mortgage interest rates.

Well, if you have friends and relatives in Texas who are aware of all the loan options and there is no vested interest for suggesting a particular loan, it could resolve your concern. However, it is advisable to learn about your options based on various factors. Before getting to know what your best options could be, let us learn about a few common mistakes the first time home buyer makes so that you avoid making them yourself:

• Unrealistic estimation – Shifting from a rental to your own home entails a new responsibility. Keep in mind that if you wish to buy property, it could be overpriced, and you may end up paying a higher monthly payment. In order to avoid such situations, hire a reputed lender that can weed out such possibilities.

• Choosing the wrong Realtor – First time home buyers need to find a realtor who understands their anxieties and confusions; and has the experience making the process easily understandable. You do not want a pushy realtor to rush you into buying a home that you may regret later. So, do your homework, and also ask your friends and relatives to recommend a realtor who specializes in first time home buying.

• Not checking out all the available loan options – Buying a home for the first time needs sound judgment. Many first time buyers are not aware of the various flexible loan programs, and opt for loans that are more expensive.

• Not understanding the contract – Do not hesitate to get detailed clarification from your realtor regarding the home loan contract. Not understanding even a seemingly simple clause can lead to serious financial or legal complications in the future.

Texas First time home-buyer bond program
For first time home buyers in Texas, the first time homebuyer bond program can be the best option in terms of suitability. Some important features of this program are:

• Meant for borrowers with low or moderate income, and who look to buy a home for the first time
• 30-year repayable mortgage for home loans with competitive interest rates
• Help in lower down payments and closing costs

 The terms mentioned above make the first time homebuyer bond program a good option for many borrowers. Consult with your lender in detail to find the loan program that is most suitable for you.

What Must you Check Before Applying for a VA Loan?

Did you know that in Texas, the Veteran Affairs (VA) Case Numbers with the digits ‘62-62-6’ need a proof on the individual sewage disposal system from the local health authority? This is applicable in Texas according to the Houston Regional Loan Center. Usually, it is not possible for home-buyers to know such rules unless they consult with a lender that provides specialized residential home mortgage services.

Who is eligible for a VA Loan? This loan program is initiated by the United States Department of Veterans Affairs (VA) for veterans who served in the American armed forces. In case they are deceased due to a service related cause, this loan program helps their families to get long-term financing.

VA loans are not the most cost-effective options due to the fees associated with it. However, this loan program has a key feature that helps veterans and their families get the required financing to buy a home. One of the key aspects of this loan is that borrowers need not make any down payment. It makes homeownership much easier as a shortage of cash reserves doesn’t prevent people from fulfilling their dreams.

VA loans don’t have a mortgage insurance premium included, which helps borrowers save a significant amount of money. The best thing about this loan is said to be the guarantee provided by the government if borrowers failed to pay their mortgage. Apart from it, there is no penalty for paying off the loan early.

Things to know before you apply
Before applying, your lending firm should get you more details about the following aspects of VA loans:

• A loan application for a primary home is likely to get approved before a second home. Second homes such as vacation homes or beach houses that are not occupied full time by the borrower may not get approved easily. The reason being, a second home is considered more of a luxury than a requirement.
• Your credit rating may affect the loan approval process. Though the VA does not enforce a credit score requirement; still a score of at least 620 is what lenders look for.
• Getting pre approval can save time. During pre approval, an underwriter reviews the loan application, and determines the loan amount based on your income, savings and debt ratio. Once the application is pre-approved, it will give leverage to you in terms of negotiating as a cash buyer of loan.
• If you are still in active duty in the armed forces, you need a statement that is signed by your unit commander. You may also need to submit the names and contact details of your past employers.
• A Certificate of Eligibility (COE) and DD Form 214 are a must. These are among the most important documents needed for VA loans. The COE will prove your eligibility to receive this loan. DD Form 214 is the ‘Certificate of Release or Discharge from Active Duty’.
• VA loans are even available to people who have faced bankruptcy. A reputed lender can help you understand how it is possible. Ask your lender for detailed information.

Apart from the information mentioned above, there are numerous other things that you may need to know for making an informed decision. According to the Real Estate Settlement Procedures Act (RESPA), lenders are supposed to provide applicants with information on all closing costs and escrow account practices. Hence, it’s important to choose a reputed lender based on its track record rather than their attractive lending offers.