To get pre-approved, you will need to CONTACT one of our loan officers, who can analyze your situation and tell you how much you can afford to spend on a house.

How is this accomplished?  Well, long story short, lenders are going to look at a few specific things before they give you the green light to go shopping for your first house. This includes running your credit and seeing how much income you earn, and then comparing it to how much you want to spend each month.  They will also take into consideration things such as how much money you have on hand and how much you pay each month towards bills like credit cards.

If you are ready to apply or are interested in getting pre-approved, just select the option below that is most convenient for you.

• Complete our Quick Loan Application Form.   This process usually takes less than five minutes. A loan officer will contact you once we receive your application.

• Give us a call and we will take your loan application over the phone.  817-527-3164 or 817-658-0504

• Send us an email describing your situation and what you are looking to do (purchase, refinance, etc).

• Have a Loan Officer contact you.

As always, if you have any questions please don’t hesitate to contact us and we will get back to you as soon as possible.

DFWMORTGAGEGUIDE.COM is an equal opportunity lender.

Let’s start at the beginning.  When you hear someone talking about mortgage points, they are speaking in reference to “discount points.” In the most basic sense, one point is equal to one percent of the amount you are planning to borrow. So for example, if you were getting a loan for $150,000, then one point would be equal to $1,500.

After that is when it gets tricky, so pay attention. When you purchase points, you are basically making the decision to prepay part of your mortgage interest.  If that doesn’t make sense, look at it this way.  For every point you buy, your lender will offer you a lower interest rate. The actual amount your interest rate will drop can vary, but in most cases its is approximately 1/4 of a percentage point per every discount point you purchased.  Whew.

Here’s an example if you’re still confused.  Let’s say you are borrowing $100,000.  To drop your interest rate by half a percentage point you would need to spend $2000.  In most cases, a lender will let you purchase as many as 4 discount points (if you are so inclined).

But let’s not jump the gun here.  You need to take a few things into consideration before you go to your lender trying to buy as many discount points as possible.

First of all (and just like everything else in this world) the main thing to think about when buying discount points is CAN YOU AFFORD IT? A lot of people (especially first time homebuyers) are pretty strapped for cash when they decide to purchase a new home, and having an extra 5 or 6 thousand dollars laying around for points just isn’t reality.

In fact, even if you had that money laying around, you have to wonder if it would help you out more to spend it elsewhere, such as on home improvements or moving expenses.  You might even yield a higher return from your money if you put it into the stock market or purchased bonds.

Another major issue to consider has to do with how long you plan on living in the house you just purchased (or refinanced). Since buying these points is really just prepaying part of your interest upfront, it might take several years before the money you are saving exceeds the amount you paid upfront for the discount. Obviously, the longer you plan on living at the property, the better deal (and the more money you end up saving) over the life of your loan!

So the key to finding out if buying points is worth it is to calculate the breakeven point, which is when the amount you save each month catches up to the amount you spent on the discount points.  If you move out before this point is reached, the bank ends up winning, and vice versa.

In most cases the breakeven point is reached anywhere between 4 and 6 years after the loan is originated, depending on your interest rate and the amount you paid in points. A quality loan officer should be able to break down the numbers for you and show when the breakeven point is obtainable.

As always, if you have any questions about purchasing discounts points (or anything mortgage related) don’t hesitate to CONTACT US and we will get back to you asap!

- Pate

If you would like us to review your situation and give you an estimate of what closing costs you may encounter, please feel free to contact us.  If not, feel free to read the rest of the article!

Continued: Some of these closing costs are charged by the mortgage company itself, while others are payable to various parties. Here’s a little breakdown on some of the fees you may be charged, and who’s getting your money.

One of the first fees you’re going to run into is the Application Fee. This is charged when you fill out your initial application (the 1003) and is non-refundable. This covers the costs your lender pays in regard to paperwork, or maybe even your credit report when you got pre-approved.

Next is the Loan Origination Fee, which is charged by the lender to cover all the costs that are associated with processing your loan. This also covers their administrative costs. This fee is generally charged to you in the form of “points”, where one point equals one % of the amount you are planning on borrowing.  So for example, if you are borrowing $150,000, one point is equal to $1,500.

There is actually a symbiotic relationship between “points” and the interest rate you obtain.  It is possible to find a loan that charges little or no points, but you will see this reflected to you in a higher interest rate.  You can also obtain a lower interest rate by paying extra points up front.

One fee that you will regularly encounter (and which is actually usually optional) is the home inspection fee. In the beginning phases of obtaining a home loan you will be advised to get an inspection for your new house, and it is a very smart move.  Mortgages are often stopped dead in their tracks if you get as far as the appraisal and it turns out your foundation is destroyed, or if termites have infested the property.

Next on the list is the appraisal fee.  Depending on what type of loan you are getting, your lender will more than likely require a new appraisal of the house before they fund your mortgage.  This is done because the bank wants to make absolutely certain that the house you are buying is worth the amount you are paying for it. This fee is usually anywhere from $300-$500.

Some more of your closing costs will come from paying a premium for Private Mortgage Insurance (PMI). Mortgage insurance is paid to protect the lender in case you default on your loan, and if your down payment is less than twenty percent of the purchase price, you will be required to pay this premium no matter what.  For closing, you will have to prepay a portion of this when you sign the final documents. The good news is, though, once you reach 20% of the value, the Mortgage Insurance is removed from your monthly payment automatically, saving you money!

Prepaid “per diem” interest is another fee you will encounter at closing.  You’ll have to pay this to cover the amount of interest that accrues from the time your mortgage is funded until you make your first payment.

The last few random fees you will see can be things such as messenger, recording, and notary fees. These are all commonplace and not at all unusual.

In conclusion, while all these costs may seem a little daunting, it is worth noting that they will be all listed out for you in an organized fashion when you get to your closing and are ready to sign.  A good loan officer will notify and explain to you about all these costs beforehand, so you should have a good idea of how much money to bring to closing, and what all your cash is going towards. Soon enough you will be done with the paperwork and ready to move into your new home!

If you have any questions about closing costs, don’t hesitate to CONTACT US and we can explain it to you in even better detail!

The truth is, few thing in life can compare to the fun filled adventure that is refinancing your mortgage. Wait, what did I just say? That doesn’t seem quite right.

The truth is, dealing with a refinance can be quite the arduous process, and for the most part, it’s not fun at all. This can be attributed to the abundance of paperwork to fill out, the random lender fees, and the sheer fact that most people don’t like modifying their mortgage to begin with.  But there is a reason so many people subject themselves to these hardships, and there are times when refinancing your mortgage is an extremely smart decision that can save you thousands of dollars over the life of your loan.

You may have heard on the news that interest rates have been hovering around historic lows lately, and because of this, thousands of homeowners have refinanced their mortgage in order to cut their monthly payment. You might be wondering how this works.  Basically, by replacing (refinancing) your old mortgage with a new one (that offers a lower interest rate), you can possibly save  hundreds of dollars per month. Imagine if your monthly mortgage went from $1500 a month to $1200. Wouldn’t it be nice?

In fact, lowering your monthly payment may not be the only situation where a refinance would benefit you. You would also want to consider this if the mortgage you are in is (the dreaded) adjustable rate mortgage.  If you find yourself in this situation,  and interest rates are expected to rise, it would be extremely smart to lock yourself in a lower, fixed rate that will keep you sleeping soundly no matter how high rates may sail. And let me tell you, the sky is the limit.

Another reason a person may be interested in refinancing their mortgage is so they can take cash out of the equity they built up over the years. Instead of just refinancing for the amount they currently owe, they may pull out additional funds to use for improvements on their house, starting a new business, or even putting their kids through college.

Of course though, just like everything else, refinancing a mortgage is not free. It would be nice if it was, but that’s just not the case. While you might catch a break and your lender may help out with some of the charges, it is extremely likely that you will still be looking at several thousand dollars in closing costs to pay for a quality refinance. Obviously you must consider these closing costs when deciding whether or not to follow through with the refinance. The trick is figuring out how long it will take before the lower monthly payments make up for the added fees and closing costs. We call this the “break even” point.  Once this point is met, each month afterward you start seeing the extra cash in your pocket.

The biggest thing to consider in regards to this (if you’re doing the refi to save money) is how long you plan on living in the house, and the difference between your old rate and the new one. Long story short, the bigger the difference in rate and the longer you plan on living there, the quicker you start saving moolah!  Wahoo!

To find out if doing a refinance would be cost effective for you, you need to find out what the break even point would be for your mortgage.  To figure this, simply divide the amount of closing costs by the amount of monthly savings.  For example, if you are saving $300 a month, and your closing costs are $5000, just do the math:

$5000 / $300 = 16.67

Meaning that after a year and 4 months (approximately) you would start seeing the savings.  So if you are planning on living in your house longer than this, a refinance would be beneficial to you!

As always, if you have any questions or comments, or if you are interested in a refinance yourself (and you don’t feel like doing any math), don’t hesitate to CONTACT US. We will evaluate your current situation and let you know if a refinance might work!

- Pate

]]> http://www.dfwmortgageguide.com/all-catagories/refinancing-your-mortgage/feed/ 18 http://www.dfwmortgageguide.com/all-catagories/qualifying-for-a-mortgage/ http://www.dfwmortgageguide.com/all-catagories/qualifying-for-a-mortgage/#comments Wed, 08 Jul 2009 20:36:02 +0000 Mortgage Mike - Admin http://www.dfwmortgageguide.com/?p=123

Unless you find yourself in the rare situation of having a few hundred thousand dollars laying around (or stuffed under your mattress), you’re going to have to take out a mortgage if you want to purchase a house. There just isn’t a way around it. So here’s some tips for getting the process started, or as we call it in the mortgage biz, “getting pre-qualified.”

The first thing you are going to need to do is make sure all of  your finances are in order. If managed early (and correctly), this can help so there won’t be any inconvenient roadblocks at the last minute that might prevent you from buying your dream home.

Long story short, lenders are going to look at a few specific things before they give you the green light to go shopping for your first mansion.  Here they are:

1. Your credit history. Pretty much the first thing the banks will do when they see your name is pull a copy of your credit report and check it very thoroughly.  Banks do this because they want to get a clear picture of how you pay your bills, how often, and basically what kind of borrower you are.

2. Do you pay your bills on time?  Do you habitually pay them late? How many different accounts do you have open? How many cards do you have? What are your credit limits for each account and what are your current balances?  Have you ever declared bankruptcy? ETC, ETC, ETC.

Basically, lenders are going to want answers to these questions before they make the all-important decision to lend you their money. But don’t fret if you have a late payment here or there, its not the end of the world. Lenders are more concerned about the frequency in which the late payments were made.  The more late payments, the greater the risk, and vice versa.

3. Your debt-to-income ratio.  You may have heard of this, and while ratio’s may not be your bag, it’s really not too difficult to figure out.  This term basically refers to the amount of money you make compared to how much money you are obligated to spend each month (on things like car payments, insurance, cell phone bills, etc). If your debt is too high in relation to  how much you make, a lender may decline to offer you a mortgage, or they may be wary about how much money they lend.

4. You should also not be surprised if the lender requests you to provide proof of your employment and income. In most cases a couple months worth of recent pay stubs suffice. Even then, the lender may still want to verify that you are indeed making as much as you claim to be. If you have only been at your present job for a year or two they may require proof of employment from your previous employer as well. If you were in school before that, they may request a copy of your transcript.

5. One more large concern for lenders when considering qualifying you for a loan is how much cash you have on hand (or in your checking/savings account).  Don’t be surprised if you are asked for copies of your recent bank statements and retirement fund balances, as well as any stocks, bonds, or other investments you may have.

This is done because the lender wants to make absolutely certain you have enough cash in your reserves to cover the down payment and closing costs without wiping yourself out.

Overall this may seem a little invasive, but don’t worry.  Due to the subprime crisis and all the fraud associate with the industry over the last decade, lenders are having to be increasingly stringent when deciding who they lend money to.  If done correctly, you can get lined up and put in a great house that meets your financial needs and demands!

As always, if you have any questions or need to get qualified yourself, don’t hesitate to give me a call (817-527-3164) or shoot me an email (info@dfwmortgageguide.com)! I’d love to help you out!

- Pate

CONTACT ME INFO

If you have the pleasure of owning your own home, your loan servicer probably contacts you all the time trying to get  you to change or update your mortgage in some way.  Some of these changes may include refinancing your current loan, taking out a home equity line of credit, or converting your loan into a biweekly mortgage. While the thought of changing your mortgage may seem as a major annoyance, it is definitely worth the time to see if any of these changes could benefit you. So let’s get started.

The folks at the bank claim that switching to a biweekly mortgage can cut the total length of your loan by 5 to 7 years, and at the same time save you thousands of dollars in interest.  Of course this sounds amazing, but is it TRUE?  Is it worth pursuing?  Will the Rangers slump after the all-star break?  Fortunately for you, the former questions are easier to answer.

Overall, the process of converting your existing loan into a biweekly mortgage works quite simply.  In fact, by switching to a biweekly mortgage you aren’t even really changing anything about the terms of your loan, the amount you owe, or any of the stipulations.  Basically, instead of paying your mortgage monthly, you pay half your monthly bill biweekly. By paying the bill every other week, you end up making an extra payment each year!

Now I know you probably hate math, but here’s a relatively simple example that shows how the biweekly program could work for you. We will use a nice round number to begin with.  For example, let’s go ahead and say that your monthly mortgage payment is $1,000. If you make 12 monthly payments, you will have paid $12,000 at the end of the year. Right?

Well, if you pay biweekly, you will end up making a total of 26 payments each year. So in turn, by paying $500 every other week, you will have paid a total of $13,000 by the end of the year. The end result being that you made one extra payment, which will reduce your unpaid principle balance (and interest charges).

So furthermore, switching to a biweekly payment schedule is an effective way to cut years off of your mortgage.  It may not initially seem like very much, but that extra $1,000 a year will eat away at your balance and help you pay it all off early.

Paying down your principle balance is a sound financial move if you can afford it (obviously). In these tough economic times it isn’t always feasible to pay extra each month just to shorten the life of your loan.  But is it necessary to sign up for a biweekly payment plan? And why is the bank asking you to sign up to begin with?

You see, there’s a catch.  Judging by the notion that nothing on Earth is ever free, most banks have made it where to you have to pay a fee to setup this type of payment schedule. It’s usually somewhere between $200-$500, and some banks will also charge you a monthly processing fee.  Other banks will even use a third party company to handle your account if you switch to biweekly.  All this just so you can pay more on your loan.

But don’t worry!  There is a way around all these arbitrary fees! It is still possible to pay down your mortgage just as quickly without having to deal with the bank or pay them extra each month.

Here’s the scoop: Just take the amount of your monthly mortgage payment and divide it by twelve. Using the example above, $1,000 divided by 12 equals $83.33. Now simply add this amount to your payment each month and make sure to make a note that you want it applied to your principal. Believe me, I worked in the loan servicing industry for years, and they will do whatever it takes to not apply the money to your principle.  But anyways…..

By making the 12 payments of $1,083.33, you will have paid off $12,999.96 at the end of the year. Just like that, you’ve gained all of the advantages of the biweekly mortgage without having to pay any fees or service charges!  Hooray!