Dallas Mortgage Blog

DON’T BE MISLEAD when buying or refinancing a home in Texas
Well, you may be thinking – hey, I’m a smart enough person – how on earth could I be fooled? And who would want to trick me?
Excellent questions – here are some answers.
Buying a home or refinancing in Texas is one of the largest financial decisions you will make in your life – and unfortunately, this means you may experience some stress as you approach these decisions. As in many other industries, the mortgage industry has more than its share of unethical individuals that are out to make a buck, but do not have your best interest at heart — these people may try to take advantage of your stress at this point in your life. For example, I have heard numerous stories about people being called and told that they need to “quickly come into the office and get all the paperwork signed, rates are changing”. Not true – you should never be made to feel panicked or pressured about making this size of a financial decision. If you are truly ready, with Gateway, a rate can be locked right over the phone.
Online lending is also particularly scary – ANYONE can throw up a mortgage website, and be aware that the person behind that great rate you are seeing online might be some guy working out of his basement in Florida who has been in the business for 6 months. For example, Non Texas lenders frequently are not aware of Texas state requirements. I have personally been involved, though our Mortgage Emergency Center, in bailing out several individuals who were lured in by an offer that seemed too good to be true, but then the lender could not come through at the closing. I have been in mortgage banking since 2003, and I would not trust my own loan to an online, unknown lender. Are you really willing to take this risk?
Another misleading notion is that if you have a checking and or savings account with a bank, you will be given preferred treatment and special interest rates. Unless you have Millions in the Big Bank, they could care less about your mortgage. They may quote you a low rate initially until they get you to pay for the application fee and do a full loan application. They even tell you on the quote **Some fees and terms may change once a completed application is filed and your rate may change until it is locked. But here is the real kicker, most big Banks cannot close on time and can take 60-90 days to close. Stick to a local Mortgage Loan officer that you can go to their office and sit down with them. This is all they do and the majority care about closing your loan on time and as promised. Why? Because we hope you will send your friends to us down the road and help keep our business going.

Advertisements in the newspaper or online are also rampant with misinformation, designed only to get phones ringing. Rates change daily, sometimes hourly, so just by virtue of being in print somewhere, they are almost sure to be outdated. I had to submit my ad with rates 2 weeks before the print date – those rates were NEVER right once the newspaper was printed. The trick is, lenders can put anything out there, and if it gets the phone to ring, that is all they need. The following conversation ensues…..”Hello, I’m calling about the 5% rate I saw that you advertised in Saturday’s newspaper?” “Well, it’s wonderful that you called! Rates did change a bit this morning, and are now at 5.375%, but let’s talk a little more about you……”
Lenders will also frequently promote “free appraisals” or “discounted origination fees”. This is great, but BE AWARE that if you are not paying for it one place, you are paying for it somewhere else. Interest rates and closing costs go hand in hand, so it is important to look at the overall loan package, not just one individual item that seems discounted. We all work off the same financial markets with essentially the same profit margins. Do we make money when we do your loan? Certainly, just like you get paid for working at your job. What we seek for you is the best balance between a great interest rate and reasonable closing costs. For example, a low or no closing cost loan, or a free appraisal, usually comes at the expense of a slightly higher interest rate. This creates more revenue for a loan officer, who can then credit back the extra dollars to pay for some/all the costs.
If you are looking for a decent rate from someone that will personally take care of your biggest transaction of buying or refinancing a home in Texas. Give me a call or e-mail me below.

Aug

Compensating factors in getting a mortgage loan in Texas

By Jerry · Comments (0)

In today’s Mortgage Financing market here in Dallas Texas, getting mortgage loan may seem difficult.
I thought that I would give some of the inside tips that underwriters look for when approving a Mortgage loan not only in Dallas Texas but in general through out the country.
My goal is to show you what to look for and offer my advice about your specific needs.
Once you have reviewed the Compensating factors in getting a mortgage loan in Texas, give me a call 972-827-7890.

Mortgage Loan Compensating Factors:
1. Credit – Scores over 620 for FHA/640 for USDA/660 for conventional? – Previous foreclosures, judgments, late payments or recent lates?
2. Payment Shock – Is there any? the lower the better
3. VOR – Verifying canceled check for personal for the last 12 months and (VOR Verification Of Rent) for apartment?
4. VOE – Over 5 years at the same company? (VOE Verification of Employment)
5. Reserves – 4 months in reserves?
6. Appraisal – Value the house would sell for based on recent homes that sold in your area?
7. Residual Income – Do we have any? What is it? Extra money at end of month helps!
8. Parents as a co-signer – Is there a co-signer that is a parent willing to co-sign for them? If so, we might be willing depending on their credit, assets, and income.
9. Down payment – Do they have 10% down payment?
10. Gift funds? – Is your down payment coming from a gift funds or their own funds?
11. VOM or VOR History- Do they have lates? If you do, almost every time you will get a NO on credit committee. (VOM Verification of Mortgage) (Lates = not paid before the next payment is due)
12. Are they maxed out on every credit card and over extended? What is going on with credit? Can they pay down a credit card to get their score over 620? Or reestablish a credit card in their name to get their score over 620?
13. Child Support – Are they paying as agreed?

There are many things that come into play when buying a home and obtaining a Mortgage and at first it seems to be a lot to handle. However, working with an experienced Mortgage Professional that can help guide you through the process it is not as difficult as you may think.
Give me a call or e-mail me.
Happy Home hunting here is the great state of Texas

Categories : Mortgages

Comments (0)

Aug

FHA Payments Considered Inducements to Purchase

By Jerry · Comments (0)

Realtors beware, FHA is looking for bad apples using inducements to purchase a home.

4155.1 2.A.4.a FHA Payments Considered Inducements to Purchase
Certain expenses paid by the seller and/or another interested third party on behalf of the borrower are considered “inducements to purchase” and result in a dollar-for-dollar reduction to the lesser of the sales price or appraised value of the property before applying the appropriate loan-to-value (LTV) factor.
These expenses include
• contributions exceeding 6% of the sales price
• contributions exceeding the actual cost of prepaid expenses, discount points, and other financing concessions
• decorating allowances
• repair allowances
• moving costs, and
• other costs as determined by the appropriate Homeownership Center (HOC).
Notes: A dollar-for-dollar sales price reduction is also required for
• excess rent credit, as described in HUD 4155.1 5.B.6.f, and

• gift funds not meeting the requirements described in HUD 4155.1 5.B.5.

4155.1 2.A.4.b Personal Property Inducements
Personal property given by a seller and/or another interested third party to consummate the sale of a property results in a reduction in the mortgage amount. The value of the item(s) must be deducted from the lesser of the sales price or appraised value of the property before applying the LTV factor.
Depending on local custom or law, certain items may be considered part of the real estate transaction with no adjustment to the sales price or appraised value. The table below describes how to determine if personal property affects the sales price or appraised value.
If the personal property item is a …
Then the …

• car
• boat
• riding lawn mower
• furniture, or
• television

lender must deduct the value of the item(s) from the sales price or appraised value before applying the LTV factor.

• range
• refrigerator
• dishwasher
• washer
• dryer
• carpeting
• window treatment, or
• other items determined appropriate by the HOC

HOC determines if the items are considered customary and affect the value of the property before applying the LTV factor.

Exception: Replacement of existing equipment or other realty items by the seller before closing, such as carpeting or air conditioners, does not require a value adjustment, provided that a cash allowance is not given to the borrower.

So, when you are trying to make a sale, keep in mind that payment for inducement to purchase is going to cause problems.

Categories : Real Estate

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With all the short sale, foreclusures and underwater sellers in Dallas texas, Buying a home and financing through FHA 203K or 203Ks renovation loan program may be your answer. What is a FHA 203Ks loan? Great question! This is a FHA loan when you only need between $5000.00 to $35,000.00 to update the home for minor repairs. Many of these can be done through getting things like air conditioner, appliances, carpet or paint from Lowe’s or Homedepot.
The FHA 203K loan is for substancial repairs up to the full appraised value and or the FHA limit in your area. These require more documentation, a certified contractor and a loan originator that knows how to work these loans. As a servicing bank, we handle FHA 203K and FHA 203ks loans in-house so you close smoother and with less headaches than other companies.
Please take a look at the video below and contact me with your questions.