Understanding Different Home Loan Types

As you get more serious about purchasing a home, I've found that it is helpful to understand all mortgage loan types before you officially sit with a lender and start talking about financing a home. There are quite a few loan types that you may be eligible for and might end up either helping you get into a home or saving you a pretty penny down the road. Here are a few loan types to get you started:

Conventional/Fixed Rate Mortgage

Most existing loans are conventional and there is a reason for that. These are the safest kind of loans because they are immune to mortgage rate changes that can occur over the lifespan of the loan. They come in 10, 15, 20, and 30-year sizes, with the most common being 30 years. They typically have a down payment threshold of 20%. If you are in it for the long run, this is your best bet.

Adjustable-Rate Mortgage (ARM)

There are various types of ARM loans, but the basic idea is that the initial interest rate for the first three, five, or seven years is locked in and then is subject to the current rate once that time period for every year after. If you don't plan on being in the home longer than that initial period where rates are locked, this might be perfect. If you stay longer, you will be subject to the market rate fluctuation which can cause your rates to go up or down each year.

Federal Housing Administration (FHA)

If you can't make the 20% down payment cost, FHA loans only require ~3% down. The downside is that there is a cap on the total amount loaned and rates are usually fixed, with 15 or 30-year options. You will also be required to pay Mortgage Insurance (PMI or MI) which adds to your monthly mortgage payment (~1% the cost of your loan).

Veterans Affairs (VA)

If you've served in the military, you have this option available to you. This loan doesn't require any money down, usually covers 100% of the home's value, and doesn't require mortgage insurance. Uncle Sam's loan is hard to resist!

Bridge Loan (Gap loan)

If you are trying to buy and sell at the same time, this is an excellent option for a smooth transition. This loan lets you combine your existing mortgage and new loan into one. Once you sell your house, you pay off that mortgage and refinance on the remaining amount for your new home. You must have excellent credit, a low DTI ratio, and don't need to finance more than 80% of both homes combined value.

Hopefully, this will arm you with the basics of each loan type and will help you be prepared when talking with a lender. If you want any more clarification, reach out to me at any time!

Home Buyer Tips: Are Fixer-Uppers a Steal or a Money Pit?

Thinking about trying to score on a fixer-upper? There are some gems out there that can turn out to be the deal of the century. In my experience, there are pros and cons to taking the fixer-upper route instead of the move-in ready.

Fixer-upper Pros

• Discounted Sale price - List prices are always lower, depending on the amount of work that is needed.
• Reduced Taxes - Property taxes are based on the sale price, so if that sale price is significantly lower, so will your property taxes.
• Blank slate - You can tailor your house to your exact tastes and specifications.

Fixer-upper Cons

• More Work - Remodeling, working with contractors, and even putting in your own elbow grease is inevitable.
• More Time - Remodeling process can take months, which can be tough to time with an existing lease. Scheduling contractors and your DIY projects can consume more time than you may anticipate.
• "Uh-ohs" - There are often things that can't be seen until you are tearing out walls, so be prepared for the unexpected.
• Cost - Sometimes the remodeling process can cost more than your initial savings and negate any "deal" you may have received on the list price.

If you are considering a fixer-upper, let me know and I can help you find that diamond in the rough!

Buyer Tips: Asking the Right Questions

Having all the information is the best way to make an informed decision. The best way to understand the complete picture of a home is to ask questions about things that are not in the listing description.

Whether you are simply asking the listing agent via email/text or you are at an actual open house, here are some go-to questions you should ask the listing agent:

• Have there been any offers submitted?
• Are there any building permits or structures being put up nearby?
• What are the comps on the home around this one?
• Are there any disclosures about the home?
• Is it currently owned or rented?
• Why are the sellers moving?
• How long has it been on the market and why?
• When was the home build and what updates has it received?
• Cost of utilities?
• What schools does it attend and how are they rated?
• Do current owners have pets? (if it isn't obvious)

TARRANT COUNTY: SHELTER-IN-PLACE NOTICE

Amidst the COVID-19 pandemic, Tarrant, Dallas, Collin, Denton, and Rockwall Counties have deemed Real Estate Services to be an essential service. However, there are different rules on how to handle business in these counties so be sure to check with your agent on what capabilities they can do to better serve you.

To ensure everyone's health and safety, Ebby Halliday Companies have established precautions for all agents and clients to take:

The safety and well-being of our clients, employees, and agents are always our top priority. Per the Shelter-In-Place Amended Order issued by Judge Jenkins that covers the period of March 23 through April 3 for Dallas County, our agents and employees will be required to work remotely. Our goal is to meet the needs of our clients while doing our part to take proactive measures to help keep all of you safe.

We plan to be fully operational through a remote-work plan designed to ensure that our sales team and clients are supported. We will also continue to monitor and adhere to the guidelines set forth by our health agencies, real estate associations, and local authorities, including all applicable “Shelter-In-Place” orders.

Can the Ebby Halliday Companies perform their services remotely?

* Yes, we have been preparing for this for the past several weeks and our company has executed its remote-work plan. All accounting, human resources, marketing, and other critical functions will continue. We ask for your patience as some processes may take a bit more time due to the logistics of working remotely.


* In addition, our Core Services partners Prosperity Mortgage, Texas Premier Title, HSTX Title, and Home Team Insurance remain fully operational. These companies are classified as Essential Businesses within the Financial Sector and therefore may continue to operate as normal through the period the Order is in effect.

What does this mean for my current listing?

* Your listings will continue to display 24/7 across all our websites (ebby.com/daveperrymiller.com/williamstrew.com). Prospective buyers can still view all information about your property and connect with your listing agent directly through the website and over the phone to request additional information.


* Together, with our Core Services departments, we have streamlined the process for you, allowing:

– All contracts to be executed electronically;

– Complete online and over the phone loan application and approval processes;

– Online Insurance review and coverage; and

– The enhanced closing process between our mortgage and title partners, allow more documents to be signed online, and the rest can be signed in our title offices or via a mobile notary closer from your home or place of convenience.


* During the term of the Shelter-In-Place Order, it is unlikely that your listing can be physically shown or have an open house. Your agent will continue to promote your home through our websites, social media channels and via video. Recent information released by Google indicated home searching inquiries were at an all-time high, therefore it may be favorable to continue the online exposure of your listing until such time as physical showings are again permitted. If you determine it is in your best interest to temporarily withdraw your listing, your listing agent can work the details with you.

What does this mean for my current home search?

* All listings across North Texas will continue to appear on the websites of the Ebby Halliday Companies, and through our websites, you can connect directly with an agent to learn more about a listing, a neighborhood or community. At a time when physically viewing properties may be limited, this is an excellent way to continue to monitor the market.


* Agents may also be able to cooperate with one another to obtain additional video information regarding a property if the property does not already have an existing video tour.


* In the event you choose to write an offer on a property, you can:

– Sign all contracts and forms electronically;

– Complete online and over the phone loan application and approval processes;

– Complete your Insurance review and obtain coverage; and

– Shorten the closing process by partnering with our mortgage and title partners, allowing more documents to be signed online, and the rest can be signed in our title offices or via a mobile notary closer from your home or place of convenience.

What if I have a pending contract?

* Our Core Services partners remain open and operating. Your lending, title and insurance needs will be fully met and your agent can continue to guide you through the process.

* Mobile Closings offer you the opportunity to sign necessary documents from your home or other convenient location. In addition, you will still be able to close in our title offices.

* Our title companies are working with the County Recorder offices to ensure that the recording of your transaction can still take place during the period of the Shelter-In-Place order.

* We are working to clarify with the County if moving companies and other ancillary services connected to closing a real estate transaction are exempted from the Amended Order. As soon as we have additional information we will immediately notify your agent.

* In the event a party cannot close due to the circumstances presented by the COVID-19 crisis or the Amended Order, your agents have access to the appropriate forms to extend the closing if agreed to by all parties.

What about the delivery of my earnest money or option fees?

* Your agent has instructions on the available alternatives for handling both the earnest money and option fee in an electronic manner.

What else do I need to be aware of?

* Do not click on any suspicious links or messages purporting to help you in this crisis from sources that you do not know. Hackers are already attempting to exploit this crisis to take advantage of the public.

Stay healthy and be well!

Elizabeth O.

This Too Shall Pass – an Interview with Dr. Lawrence Yun #201

“It’s going to pass. This short-term virus-negative impact will pass.” – Dr. Yun

https://bit.ly/2Qz49MD

Federal Reserve Cuts Rates to ZERO - What This Means

Federal Reserve cuts rates to zero to support the economy during the coronavirus pandemic - does this mean mortgage rates will be 0% now?

Here are a few important facts:

- The Fed cutting the Fed Funds rate down to zero does NOT mean mortgage rates are zero. The Federal Reserve Rate is NOT the same as the Mortgage Rate.

- Refinance volume the last few weeks has been so high that there aren’t enough investors to purchase the debt. As old economics tells us, too much supply and not enough buyers result in lower prices.  Lower prices on mortgages mean higher rates.

- The record surge in refinances has resulted in lenders actually raising rates in order to slow the influx of business. (Crazy isn’t it!?)

- The Fed committing to purchase large amounts of Treasuries and Mortgage-Backed Securities (MBS) will eventually help rates as it lessens the supply in the market but it isn’t going to happen overnight.

For more information, I recommend contacting your mortgage lender - they are your mortgage experts who are licensed and able to tell you exactly what's going on in the financial world pertaining to your home mortgages.

You can also check out this article by CNN.


Stay safe and healthy!

What Does a Buyers Agent Do in 2020?

Congratulations on your decision to buy a new home!  There are many important things to consider throughout the process, especially if you're a first-time homebuyer. 

Here's some information that will keep you on track.

In General

A home purchase may be your largest financial transaction to date, so it's important to make the right decisions and to keep an eye on the details. With the assistance of your Real Estate Agent and Loan Officer, it should be an efficient, pleasant, and ultimately rewarding experience.

Count On Your Real Estate Agent To:

• Preview available homes to weed out those that are overpriced, or undesirable in some other way.
• Present the homes that suit your needs as you've defined them.
• Help you determine the difference between a "good buy" and a property which, because of its nature (neighborhood, market appeal, etc.), might have to be discounted if you decide to sell in the future.
• Negotiate the best deal for you. With a Pre-Qualification letter from your Lender in hand, your Real Estate Agent will be able to demonstrate that you are a qualified and capable borrower. This will strongly influence the Seller, and may make the difference between the Seller accepting your offer or someone else's -- even if your offer is lower!

This isn’t an all-inclusive list, so if you have questions about the finer points in the buying process, let me or your lender know!

CHECK THIS OUT!

If you're in the northwest side of Fort Worth - I hope you can make it to my First Time Home Buyer's Seminar! (RSVP link below!)

I've partnered up D.R. Horton and am going to spend time going in-depth on what I've shared in today's blog post and host a Q&A session to help as much as I can!

RSVP FOR YOUR TICKETS HERE!

What to Know Before You Buy a Home in Dallas-Fort Worth in 2020

Understanding the buying process can better help you prepare yourself, emotionally and mentally, for what is to come and can alleviate some of that stress! Here is a general guide that breaks down the process and helps you prepare for what to expect when buying a home.

The Search
Most buyers start their home search on their own and "window shop" for homes. This is a great way to get a feel for the market and check your own commitment level. Keep in mind that having an agent at this point in time can fast track your searching efforts, as they can do the leg work for you!

The Pre-Approval
Once you are ready to take the next step, you'll want to get pre-approved so that you can be prepared to make an offer. Note that these typically last 90 days but can be renewed at the end of this time period. This allows you to jump at any prospective homes as quickly as possible, and in hot markets, this can make all the difference.

Get an Agent
An agent is going to advocate for you and protect your interests. They have a great amount of expertise and insight that can help you make the best decision possible. They will also negotiate on the offer, give real estate advice, file all appropriate paperwork, and ensure that the transaction goes as smoothly as possible.

The Offer
You think you've found the one! The offer will include your price and any other terms or conditions that your offer depends upon. You will also be required to put some earnest money forward to let the seller know you are serious. This goes to escrow and is applied toward your purchase if your offer is accepted. You may lose your earnest money if you back out of the offer and it isn't based on any of your pre-ordained contract conditions. It is wise to write an inspection as a condition to your offer, that way if major items come up, you can walk away and get your earnest money back. Be sure to read over the seller disclosure documents, as the seller is required by law to put any known flaws in the home in writing. You will also set a closing date, which sets the date in which you get the keys and the home is yours.

The Counter Offer
The seller may come back with their acceptance or denial of your offer price or conditions. Don't worry, you can counter their offer as well. This can be a back and forth game until both parties come to a consensus.

Mutual Agreement
Once both parties have agreed on the terms in the offer, you have a mutual agreement.

The Loan Application
The mutual agreement comes with a price and with that, your lender can start the underwriting process. The time to complete the loan application can vary, but you can expect at least one week during normal business times.

The Appraisal and Inspection
Lenders want to ensure that the home is at least worth the amount they are lending you. This protects you from overpaying for the home. If you are putting up an all-cash offer, you are not required to have an appraisal.

Closing
If approved, you will bring your down payment and money for all other closing costs. After signing the mortgage, you are now in the possession of the deed and you will get your keys on the aforementioned closing date.

This isn’t an all-inclusive list, so if you have questions about the finer points in the buying process, let me or your lender know!

CHECK THIS OUT!

If you're in the northwest side of Fort Worth - I hope you can make it to my First Time Home Buyer's Seminar! (RSVP link below!)

I've partnered up D.R. Horton and am going to spend time going in-depth on what I've shared in today's blog post and host a Q&A session to help as much as I can!

RSVP FOR YOUR TICKETS HERE!