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.

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.

Before we get into this too deep, lets first get an idea of what this seasoning requirement originally entailed.  Basically, since 2003, the FHA has required that a house is “seasoned” on the market for 90 days before it is allowed to be resold.  This means that an investor or any other person who purchased a property had to wait for approximately 3 months before they were allowed to sell the house to an FHA insured buyer. 

More than anything, this was done to prevent people from buying a house and immediately selling it at an inflated price to a naive or uninformed buyer.  Luckily, over the past several years, most of the riff raff has been weeded out of the market, and this type of practice isn’t as widespread, or even really possible (as you will see from the rest of this article). 

So, this is obviously good news for investors, but why is it good for home buyers?  Well, per the official waiver:

“…the 90-day resale restriction often hinders community stablization and revitalization.”  They also said:

“FHA borrower, because of the restrictions we are now lifting, have often been shut out from buying affordable properties.  This action will enable our borrowers, especially first-time buyers, to take advantage of this opportunity.” 

Basically what this means is that more houses will be put on the market that were otherwise just sitting there collecting dust.  Consequentally, this presents more options for people looking for the perfect house!

BUUUUUUT……before you get too excited, it should be noted that there are several specific nuances to the waiver that investors and homebuyers alike should both be aware of. 

4 IMPORTANT POINTS TO CONSIDER

1.  Seller MUST Hold Title

In other words, the person who is selling the house must legally and officially own the property, and thus, be on title.  In fact, FHA will expect to see the investor/seller as the owner of record as of the date the contract to sell to the FHA buyer is executed.  Long story short, no more back to back, same day closes to FHA end buyers.  Sorry. 

2.  You Still Need Short Term Funding

Basically what this means is that if the property doesnt sell immediately you need to be financially able to make the payments.  Be prepared to come up with short term funding for however long it takes to sell the house.  Luckily, in most cases, it is easier to find 30-60 day financing compared to 90. 

3.  Is There A Flipping Pattern?

This is an easy step.  FHA mainly wants to know that the subject property doesn’t display a history or pattern of previous flipping activity.  You can go and check the title from last year to see if the property has changed hands very often.  Best case scenario would be not at all. 

4.  The 20% Rule

If the sales price exceeds 20% of the previous purchase price, you will have to show proof that you actually made repairs making the property worth that much more.  This is done to ensure the sale is legitimate, and can include a full FHA inspection, or even a second appraisal.  The best way to combat this is to simply take accurate records as proof of what you did to enhance the value of the property.  Take plenty of before/after pictures, document the entire process, and you should be fine. 

Other Important Points:

 - All transactions must be arms-length

 - Assignments of a contract for sale will trigger a red flag.  No taking over deeds for people. 

LONG STORY SHORT, KEEP IT CLEAN AND STRAIGHTFORWARD! 

The better documented your case, the better chance you have of the process going smoothly.  As always, if you have any questions please don’t hesitate to CONTACT US and we will reply to your query as soon as possible.  I also urge you to read the original waiver from the FHA regarding the subject matter:

FHA WAIVER

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!) 

Here are some of the basic guidelines to see if you might qualify for the tax credit.  First of all, a “first time home buyer” is considered to be someone who has not owned a home for the past three years.  As for the limit you can receive, just look at the purchase price of the home and take 10%.  The max is  capped at $8,000, and is subject to income limitations, meaning that if you are single you would need a modified adjusted gross income of $75,000 or less to qualify for the full credit.  Married couples need a gross income of $150,000. If you happen to make more than that, you may in fact be eligible for reduced credits.  The last main requirement is that you must live in the house as your primary residence for at least 3 years.

Honestly it would be a big mistake to miss out on this opportunity.  I don’t care who you are, but $8000 is a good chunk of change to get for buying a house.  We may never see something like this come about again.

To see a video explaining the tax credit in further detail, please CLICK HERE.

And if you don’t feel like doing the research yourself just CONTACT US and we will find out if you qualify.  Here at dfwmortgageguide.com we will do everything we can to get you in a new house and out of the rent race.

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!

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!