All of this is funded by the US Department of Housing and Urban Development (or HUD) in an effort to provide financial assistance to qualified homebuyers to purchase lender-foreclosed homes with the City of Fort Worth in specific target areas.  Which areas?  Well I’m glad you asked.  Here they are:

• 76131
• 76133
• 76123
• 76112
• 76179
• 76248
• 71637

Obviously the HUD isn’t going to just give this money away to anyone who asks, so there are some qualifying factors you must take into consideration when applying.

First of all, income is the main thing the HUD will want to know when you fill out your application.  The limits are set in advance by HUD, so conversely, your income cannot exceed their parameters in order to qualify.   For example, the maximum allowable household income for a family of 4 is $72,900.  For 5 people it jumps to $85,500.

Secondly, the property you find must be located in the city limits of Fort Worth, and you must occupy it as your primary residence.  So in other words, no investment properties or second homes are eligible for down payment assistance.

So how does the program work?  Basically, eligible homebuyers will receive a deferred-payment loan with no interest or payments at all for 10 years. The only stipulation? You have to stay in the house for 10 years.   After this time period has expired the loan is forgiven.  It is also worth noting, though, that the amount of the deferred-payment loan begins to reduce after five years, so you won’t have to pay back the entire amount if you end up having to move out of the house after 6 or 7 years.

If you are interested in seeing if you qualify for the program, don’t hesitate to CONTACT US and we will review your situation.  If you would like to review the requirements yourself, just visit Fort Worth’s Homepage for more details.

Well right now this is actually a possibility, due to the Department of Housing and Urban Development’s “Good Neighbor Next Door Program.”

Long story short, the HUD is offering half off a home mortgage if you are in one of the previously mentioned fields and find a property that falls into one of the designated geographic areas authorized by Congress under provisions of the National Housing Act.

Why would they do this?  Basically, HUD desires to make the communities of America stronger and safer, and improve the quality of life in distressed urban communities by encouraging Law Enforcement Officers, Teachers (pre-Kindergarten through 12^th grade), Firefighters, and Emergency Responders (EMT) to purchase and live in homes in these communities.

In return for the 50% discount, you must only prove once a year that you occupy the property as your primary residence.  You must do this for a total of 36 months.  In other words, as long as you live in the house for 3 years you never have to pay the other half of the mortgage!  It’s that easy.

How does the discount work?  Well, when you purchase the house, you will be required to sign a second mortgage for the other half of the loan.  As long as you stay in the house for the requisite 3 years the second mortgage is wiped away after that time period.

You can even refinance the mortgage down the road if it happens to be to get a lower rate or even to make repairs (203k loan).

Want to find out if you qualify for this type of loan?  Are you interested in seeing which properties qualify as a designated geographic area?  Just fill out this short form and we will get back to you quickly.  The HUD updates and changes the areas frequently, so it’s really much easier to let us do the work for you!

As always, if you have any questions about this type of loan, or if you just have questions about the mortgage process, feel free to contact us and we will get back to you as soon as possible.

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.

Online mortgage calculators will help you in planning and acquiring a home loan for your dream home.  These loan mortgage calculators are user-friendly tools which will help you in knowing your monthly payments, interest rates, pay-off dates, amortization schedule, etc.  Have a look at the top 5 mortgage calculators:

• Home affordability calculator: This loan mortgage calculator will give you an idea about the loan amount that you can afford to buy a house. You’ll have to mention the required loan amount, interest rate, time period, etc to determine your monthly payments and required income.

• APR calculator: You will be able to calculate the annual percentage rate on your mortgage and get an amortization sheet of your monthly payments by using this calculator. You need to enter your interest rate, loan term, mortgage amount and additional costs to calculate APR. The additional costs would include the fees that you pay at the closing.    

• Refinance calculator: You can use this calculator to find out how much you can save by refinancing your mortgage at a lower rate. This calculator will let you know your payment after refinance, break-even period, interest that you save, etc. Thus, you’ll be able to know the minimum time-period that you need to stay in the property to recover the closing costs.

• Bi-weekly monthly payment calculator: This calculator will let you know the amount that you’ll save on interest if you make bi-weekly payments and not monthly payment. You’ll have to enter the loan amount, monthly payment and mortgage rates to get a comparison of the two.

• Qualifying loan calculator:  If you want to know the maximum amount for which you can qualify, check out this calculator. Here, you’ll get an amortization sheet showing your entire payment schedule. It will help you know the qualifying loan amount, property tax payments, private mortgage insurance, etc.

Using the online loan mortgage calculators will help you make the right decision regarding your home loan. These calculators will make it easier for you to calculate your payments thereby helping you know whether or not you can afford a loan. You can use the following for some of the calculation.

By Mortgagefit Community

Fortunately though, there is a new program available from the United States Department of Agriculture that offers 100% financing for people that live (or are looking to live) in rural areas.

Why would they do this?  Is it too good to be true?  Well, long story short, the government offers the option of “zero money down” so that people who live in rural areas (who may have always been renters) can finally have access to affordable mortgages. Consequently, this type of loan is often the best scenario for people who live in the country and want to find a place they can call home. 

Another amazing feature of this loan is that 100% of repairs that need to be made to the property can actually be finance into the loan based on “after repair value.”  What this means is that the USDA Rural Development Loan can also be considered a renovation loan as well.  Because of all these qualities, these loans are quite possibly the best option on the market today. 

So you may be asking, what features does this type of financing entail?  What can I do to make this work for ME?  Well, here are some of the benefits of the USDA Rural Development Loan:

- NOT ONLY FOR FIRST TIME HOME BUYERS - This isn’t like the tax credit!

- LOW INTEREST RATES – Just because you are getting a good deal doesn’t mean you will pay more over the long run.  Rates on these loans are generally better than VA and similar to FHA.

- NO PMI (MORTGAGE INSURANCE) - This makes your monthly payment even lower.

- NO LIMIT ON PURCHASE PRICE - Buy what you want!  (Property must still be reasonable for your income)

- NO MINIMUM FICO SCORE- People that have zero credit history may even qualify.  Those with a credit histoty should have a reasonably good score.  Call for more details.

- SELLER CONCESSIONS UP TO 6% - What this means is that the person selling the house can pay for all or some of your closing costs, which saves you even more money.

- NO CASH RESERVES REQUIRED - Most loan programs require you to have a certain amount of money saved up before you can purchase a home.  This is not the case with the USDA Rural Development Loan.

- 100% FINANCING!!! - NO DOWN PAYMENT IS REQUIRED.  That’s right. NO DOWN PAYMENT.

So next is the issue of actually qualifying for the loan.  Here’s what you need to do, and some of the main requirements involved:

 - You must be a legal US citizen or legal permanent resident.

 - Your income must qualify for the house or property you desire.  As a point of reference, your mortgage payment should not exceed 29% of your gross monthly income.

 - The property must be used as a residence (no farms or commerical deals).

 - You can’t already own a suitable residence in the same area as your proposed new property.

 - Your total family income should not be more than 115% of the median United States income.

Probably the biggest requirement for this type of loan is that the property MUST be in a qualified rural area.  What constitutes a qualified rural area? Well, mostly this has to do with Income and Population Density restrictions, but you may be surprised to find out just how many areas around Dallas and Fort Worth in fact qualify.  As always, you can call or CONTACT US and we will review your situation and see if you (or a house you desire) qualifies.  (free of charge too!) 

But the government didn’t stop there.  Not even close.  The new bill even makes more homeowners eligible to claim the credit on their taxes.  First-time homebuyers (those who haven’t owned a a home in the past 3 years) still qualify for the existing credit of $8000, but now those who have owned (and lived in) a residence for at least 5 years can claim a credit in the amount of $6500!

“The new version of the tax credit has the potential to stimulate the housing market even more than the old version due to the fact that more people will qualify under the new rules,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.

You might be asking “how does this crazy tax credit work?”  Well, the tax credit is applied in relation to the taxes you actually owe. For example, if you owe $8750 in taxes and then apply your $8000 credit, your new tax bill will be reduced to only $750!  If you only owe $500 you will get a credit back in the amount of $7500.  It’s that easy.  As always, you can still amend your 2008 return and take the deduction in 2008, as long as you closed on a home before November 6, 2009.

ONE IMPORTANT THING TO CONSIDER:

If you purchase a home and take advantage of the tax credit, you can’t sell your home within the first 3 years of ownership without the entire amount of the tax credit being recaptured. This means you will be required to give that money back to the I.R.S.  So, if you take advantage of the tax credit, plan to stay put for 3 years.  After that you won’t owe anything!

As always, if you have any questions about the tax credit, don’t hesitate to CONTACT US and we will get back to you blazing fast!  You can’t even imagine how fast we will get back to you!  Just try it!  I dare you!

Once the loan officer has this information from you they will run your credit and and make an estimate of approximately home much money you can afford to borrow at the current interest rates.

After this is done you will get a “prequal letter” that will have this amount indicated on it.  Prequal letters are often given to realtors as a a form of good faith because they show that a borrower can in fact afford a house payment of a certain amount.

This way a realtor will know what price range of houses to show a borrower, and they also know that the borrower is working with a loan officer, and thus serious about finding a home.

Another benefit of getting pre-qualified is that it makes you much more desirable to someone who is selling their home. When there are multiple offers on a particular property, a seller will be much more inclined to go with a buyer who has already been pre-qualified, because by having already proved your creditworthiness you are a lesser risk than someone who has not!  It makes perfect sense!

So if you are interested in getting prequalified, or if you have any questions about finding a home in the DFW area don’t hesitate to CONTACT US and we will do everything we can to make it happen.

Believe me, all the different types of loans can be quite intimidating to someone uneducated on the subject.  In fact, most people in America don’t know hardly anything about their financing options.  But don’t worry. That’s to be expected.

BASIC LOAN TYPES

The type of mortgage that the majority of people today will get is know as the traditional fixed rate mortgage, or FRM. Over 70% of homeowners this year will get this type of financing for their new home. The main reason for this is that the FRM offers a much stronger sense of stability over the other types of financing. Whether the life of your loan spans 15 or 30 years, the interest rate of this loan is locked in at origination and will not change, no matter what happens to the economy or the mortgage market.

The other main type of loan is called an Adjustable Rate Mortgage, or ARM loan.  This type has an interest rate that is tied to an index, and can rise or fall depending on the current mortgage market.  In general, if the prevailing market increased during one adjustment period (which is specified when you close the loan) then your interest rate will rise, along with your payment.  Adversely, your payment amount will drop if the market drops.

The main reason some people decide to go with an ARM loan is that it will initially offer you a much lower interest rate, which means your monthly payment will be significantly cheaper.  That dark side is that your interest rate can sky rocket, leaving you with a mortgage payment that can be hard to pay every month.  Luckily, though, when you go to your closing, caps are usually set on how high your rate can go.  Be careful though. Make sure you know what you’re doing before you get setup in one of these loans.

OTHER LOAN TYPES

Payment Option ARMs. You may hear this type of mortgage referred to as a “flexible payment ARM.”  These loans have an interest rate that adjusts every month (like a regular ARM loan) but with no adjustment caps, meaning the sky is the limit.  The draw of these loans is that they allow homeowners to make a very low initial monthly payment, but unfortunately the amount will often jump up over time, and usually quite steeply.

Interest Only Mortgages. This type of loan allows borrowers to pay only the interest portion of their payment for a certain amount of time.  This is a good type of financing for the short term, because the principle of the loan is not paid down, and the outcome  is a lower monthly payment for the homeowner.  That being said, the interest only period doesn’t last forever, and once it expires you can expect your payment to increase due to the fact that you are repaying all of your principle over a shorter period of time.  Basically, the longer your setup your interest only period, the higher your monthly payment will be once it expires.

Balloon Mortgages. At first glance, these types of loans will very much resemble a traditional 30 year fixed rate loan.  The difference being that the term of the loan is almost always much shorter, usually around 5-7 years.  After this time limit is over, the remaining balance must be paid in one single lump sum.  In most cases a borrower will refinance once this point is met, or else pay the entire amount.

Biweekly Mortgages. CLICK HERE to read more about these types of loans.  They can take years off the life of your loan if done correctly.

As always, if you have any questions about the different types of loans, please don’t hesitate to CONTACT US and we will get back to you with an answer ASAP.

- Pate

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!