Every week we release educational videos related to hot topics in the mortgage industry on YouTube.
Subscribe to our channel to stay in-the-know!
Just For Buyers
This page was created for buyers and the real estate community to ensure that accurate information is available to everyone in need of financing needs. As a mortgage loan officer since 1995, we have seen many clients come to us that have been misinformed or misguided. Our goal is to bring you accurate information before purchasing your next home so you can make the best and most informed decisions during the home buying process.
Your Preferred Houston Financing Team
With a strong reputation as an outstanding mortgage banking firm, serving the lending needs of individual homebuyers, real estate professionals, and homebuilders throughout the region - we are a full service mortgage banker with access to a variety of mortgage programs. Our team is dedicated to finding the product to meet your unique needs.
The Loan Process
Required Documents to Obtain a Mortgage
- A month's worth of pay stubs
- Two year's worth of W-2's (*please note if you are self-employed you can provide tax returns)
- For retirees, any retired income (social security, IRA distributions, etc.) are acceptable
- Two month's worth of assets (bank statements, investment accounts, 401K, owned home assets, etc.)
- Photo ID/driver's license/passport
Points to Consider Before Choosing Your Lender
- Always get some referrals from someone who has bought a home!
- Accessibility
- Responsiveness
- Accuracy
- Knowledgeable
- Do they have a back-up plan or team member who can assist you when your primary lender is away?
The Pre-Approval Process
- We have a team dedicated to the pre-approval process here to answer any and all of your questions along the way
- First, you'll apply online or over the phone
- We will pull your credit and simultaneously send over a secure link for you to upload your important documents
- After we receive your documents, you'll come meet us in person for a consult
- After the consult... tadaa! We will be able to generate a letter for you
How Long is a Pre-Approval Valid
- Typically, the pre-approval is valid for 90 days
- If your situation has changed and you need a new letter, give us a call we will work with you to get a new one - it's easy!
- It's important to note that credit expires after 120 days
Why Use A Local Lender
- Fees in your local area (property tax, property insurance, title fees, etc.)
- Local appraisal list to ensure the property gets appraised correctly
- Local market knowledge of the area you want to move to
- Weekley calls to the listing agent to put in a good word and keep the agent updated on the situation
How to Read a Loan Estimate Document
- A Loan Estimate Document is a document given to you by your lender that covers most the details on your loan
- Use this tool to help review your Loan Estimate HERE
- Watch the video and follow along as I show you step by step how to read the document
Programs Available
FHA VS. Conventional Loans
- An FHA loan is only for a primary residence
- A Conventional loan is for three property types - primary residence, vacation home, and investment properties
- In Texas, the maximum on an FHA Loan is $330,050 and for Conventional, it’s $510,400 (please note this may change due to your situation)
- The minimum down payment on an FHA Loan tends to be 3.5% of your total house value
- A Conventional Loan for first time home buyers is a minimum of at least 3% of the total house value, and for everyone else, it’s a 5% down minimum
- The credit score for an FHA can be as low as 580 and for a conventional it can be as low as 620
Why Choose an FHA Loan?
- FHA loans are great for people who have credit issues, such as bankruptcy or foreclosures within the last two to three years
- Another great reason to apply for an FHA loan is if your credit score is in the 600's
- An FHA loan also gives great rates even if you have an up to 55% debt to income ratio
Zero Down Vs. Down Payment Assistance
- 0% down essentially means... 0 money down
- But, be aware to get approved for 0% down there are many more obstacles to overcome
- Down payment assistance may be a better option for you - this program allows for higher debt to income rations and lower reserves
- A down payment assistance pays for the down payment and may even cover your closing costs
⬅ Watch my video for more details!
First Time Home Buyer Benefits
- First, let's define what a "first-time homebuyer is"... To qualify as a first time homebuyer, you cannot have owned property for at least 3 years
- You are allowed to put as low as 3% down for a Conventional Loan
- A mortgage credit certificate (MMC) is available if your income is below a specific amount based on the county
- Down payment assistance is available and also varies by county
Come talk to us today for more information about first time home buyer benefits!
PMI
- Did you know that there are four main types of private mortgage insurance that are used during a transaction?
- Option 1: Monthly PMI - this type of mortgage insurance is for people who might decide that they want to waive the PMI fee later and can be used if you are not going to have PMI for a while
- Option 2: Borrower Paid PMI - a one time, upfront cost that can be paid by either using a seller credit, a lender credit, or through the borrower
- Option 3: Lender Paid PMI - this type increases your interest rate and will get paid off over the course of your loan
- Option 4: Split-Premium - a portion of this payment will be taken upfront while a very small portion will also be taken monthly
Want to learn more about PMI? Take a look at another one of my videos here that explains it more in depth!
Rates
Why Interest Rate Really Doesn't Matter
- When putting a loan down that might have some earnest money at stake, it might be riskier to go with a lender offering a lower interest rate. Not only are you competing with other summable amounts of earnest money, but also have a chance of losing it all
- Another concern is the potential high amount of clients this lender might have. When you have a question or concern, do you want to call and be added to the "queue" from a computer, or talk to a REAL person?
I highly suggest you go with a local lender. A local lender will have the best knowledge, understand the dynamics of your specific marketplace, and will have a more fine-tuned appraiser list.
APR and Interest Rates Explained
- When you’re taking out a mortgage, keep in mind that an your interest rate isn’t the same as your loan’s annual percentage rate (APR)... So what’s the difference?
- Your interest rate refers to the annual cost of a loan to a borrower
- APR is the annual cost of a loan to a borrower PLUS fees, including mortgage insurance, most closing costs, discount points and loan origination fees
What About My Credit?
How to Get Your Credit Score Up FAST
- Take a look at your credit card debt... credit card debt takes up 30%-35% of your credit score
- So, the fastest way to get your credit score up is to make sure you are only using 30% of your credit card limit
- For example, if your limit is $1,000 only spend up to $300
Credit Secrets You’ll Never Find
on the Internet
- Did you know, there are over 25 models of FICO? However, all mortgage companies must use the same FICO model
- Get with a local lender quickly so you can get the most accurate credit score
- Disputing your credit gives a false reading on your credit score
- Pulling your credit does NOT lower your credit score... all mortgage inquiries within 45 days equals one credit pull
How Student Loans Affect Qualifying For A Mortgage
- Student loans are everywhere... and we know that!
- If you have student loans, a conventional loan might be better for you over an FHA loan
- Conventional loans are more lenient on how student loan payback factors into your mortgage
- Set the path for a successful homeowner experience by qualifying early to see how your student loans may affect your homebuying experience
Collections and How They Affect You Buying a Home
- If you have collections, no matter how small, it will affect your ability to qualify for a loan
- If your cumulative collections are over $2,000 (non-medical), a 5% repayment will be added to your debt to income ratio
- BUT, collections do not necessarily mean you cannot get a loan. Talk with your lender to see how you can mitigate any collection issues