Plano Home Real Estate MortgageWhether you’re just out of college, recently married or simply haven’t jumped into the market yet, buying your first DFW home is an exciting prospect. It can also be an expensive one, which is why most people will take out a mortgage to help finance the cost.

If you are planning on engaging with a mortgage lender, you’ll need to have your finances in order. In today’s post, we’ll share a few key reasons why you’ll want to check your credit score well in advance of buying your first home.

Your Credit Score Is A Signal For Lenders

As you know, mortgage lenders have a responsibility to lend to those individuals and families who are at a low risk of default. So when a mortgage lender starts to dig into your financial background, they are looking at your credit history and credit score to help them assess that risk.

Note that having a low score doesn’t necessarily mean you have bad credit. If you’re still in your 20s and have only had a credit card, your score might be low even though you are fully capable of managing a mortgage.Plano Home Loan

Your Score Impacts Your Mortgage Interest Rate

As mentioned above, your credit score helps to signify your risk. If your credit score is in a lower range, perhaps a 640 or 660, you’re presenting a greater risk than someone with a score of 760 or 800. Because of this, the interest rate that you pay on your mortgage will in part be determined by your credit score. Those individuals who present a higher risk pay a higher rate to compensate. And vice versa, if your credit is spotless you can expect to pay a lower interest rate.

You’ll Need Time To Challenge Any Issues

Finally, you’ll need to give yourself some lead time to challenge any irregularities with your credit report. The credit reporting agencies aren’t perfect and they do make mistakes. There may be some old, retired credit card or other debt sitting on your report which is holding the score down. Even worse, there may be some incorrect delinquency or other error which ends up as a big red flag for potential mortgage lenders.

Plano mortgage ratesAs you can see, it’s worth spending the time to check your credit score. You get to check it for free once per year, so take advantage of the opportunity. And when you’re ready to discuss buying your first home, contact Warren Whitaker by phone or text at 972.523.8353 or Warren@Lendhome.com. He will share how to navigate the credit score and mortgage process so you can land the home of your dreams.

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Plano homesWhether you’re trying to improve the look of your home or are getting ready to put it on the market, the idea of renovations might seem like a significant financial burden to take on. Fortunately, there are a variety of easy solutions for improving the look of your home without spending a lot of money. If you’re wondering how you can spend $100 wisely, look no further than the following upgrading tips.

A Funky Light Fixture

It might seem like a cool light will cost an arm and a leg, but there are plenty of options available on the market that will instantly add a unique touch to your place. Whether you decide to go mod or classic, a fixture can draw the eye and instantly add interest to a room.

A Makeshift Curio Cabinet

In these days of smaller living, many people have to pile their stuff into closets and cabinets in order to make it all fit. Fortunately, a bookcase-cum-cabinet can be an inexpensive purchase and can house a variety of items like books, dishes and appliances for an easy, eclectic look.

Covering The CabinetsPlano Home Loan Plano Mortgage

Kitchen cabinets are often one of the first things to show age in a home, but getting out the can of paint can be a great way to instantly modernize their look. While you’ll want to go with a neutral tone that will compliment the space, the right color can add instant oomph.

Re-Upholstering A Chair

There are pieces of furniture in your home that you may be tired of looking at, but there’s an easy way to improve them without buying new: re-upholster! By trying out a new fabric on one of your favorite chairs, you might be surprised by how much it improves the room.

Plano mortgagePaint Does The Trick

Painting may be one of the least popular renovation tasks, but few things are as successful at improving the look of your home as a fresh coat of paint. Instead of going all out with a bright color, choose a neutral shade that complements the furniture for an instant brightening effect.

Home renovations may seem like an expensive endeavor, but you can easily improve the look of your home with a new light fixture or by giving your furniture some love. If you are interested in making valuable renovations to your home, contact Warren Whitaker by phone or text at 972.523.8353 or Warren@Lendhome.comyour local mortgage professional to learn more.

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Plano Mortgage RatesIt can be a stressful experience to put your Plano home on the market and wait for offers in the hope that you’ve priced it right. However, for those who are considering selling to family members, the sale of a home can be fraught with just as much stress before and after sealing the deal. If you’re wondering if it’s a good idea to sell to a family member, here are some things to consider beforehand.

Providing A Discount

Whether you’re selling to a sibling or a child, you may be considering offering the home at a discount to help them out. Fortunately, since the discounted value will be different than the market value of the price, this may mean a taxable gain when it comes time for them to sell the property after a few years of residing in it. On the other hand, if your financial health is not the best, selling at a lower price to a family member can create an undue financial burden for you.

An Owner-Financed Sale

If you’re trying to help your child get on their feet, the option exists for an owner-financed sale where your child will be making monthly payments to Plano home loanyou. This provides the benefit of not having to worry about a lender and avoiding interest rates on top of the payment. While this can be a great feeling as a parent to be able to help your child, it’s important to weigh the decision carefully to determine that your child will not default on the loan and it won’t be tiresome for you to act as the lender.

Keeping It In The Family

For most people, the home they live in has sentimental value, whether they’ve lived there for a few years or it’s been in the family for generations. That’s why it can be a great comfort for many to sell to a family member who will understand the house’s history and the family traditions. If the deal is going to put a strain on relationships, though, it may not be worth the well-being of the family to keep the home among the relatives.

Plano HomesIt can be a comfort to sell a home to a family member and secure their well-being, but there can be financial hurdles involved that can have an adverse impact on the relationship. If you’re currently considering purchasing from a family member, contact Warren Whitaker by phone or text at 972.523.8353 or Warren@Lendhome.comyour local mortgage professional to learn more.

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Plano HomeSo you’ve been pre-approved for a Plano Home mortgage – great! You’ve taken the first step toward becoming a Plano Homeowner. But before you start picking out china patterns, you’ll want to keep in mind that a pre-approval isn’t the same thing as a mortgage agreement. There’s still no guarantee that you’ll actually get a mortgage.

But why would a lender deny a mortgage after pre-approving a borrower? Here’s what you need to know.

Sudden Changes In Income Or Employment HistoryPlano Home Loan

A number of mortgages will require borrowers to have consistent employment for a certain length of time. If you apply for an FHA mortgage, for instance, you’ll be obligated to have an employment history dating back at least two years. Any gaps in your employment history will require a written explanation that your underwriter will need to approve.

If you switch career fields while in the process of buying a home and it has a significant impact on your income, your lender may deny your mortgage.

Credit Mismanagement After Pre-Approval

Lenders like to see consistency – so if your credit score suddenly drops after you’ve been pre-approved for a mortgage, it sends up a red flag. Even something as minor as a late payment on a cell phone bill could affect your credit score just enough to cause your lender to deny you. Pay extra attention to your bills throughout the home buying process, and make sure nothing slips past you.

Plano Real EstateTaking On More Debt In The Interim

A number of buyers will take on more debt after they’ve been pre-approved for a mortgage. Although it may be tempting to get a new car to go with your new house, getting a car loan will change your debt-to-income ratio and cause your lender to think twice about how responsible you are. If you’re in the process of buying a home, hold off on any other major purchases until after the deal has closed.

An Unsatisfactory Bank Appraisal

Sometimes, your mortgage can be denied for reasons that have nothing to do with you. Some lenders will only Plano Real Estateissue a mortgage if the property value of the house in question is appraised above a certain level. Others will deny a mortgage if the home requires roof repairs, electrical work, or a new heating system.

You’ll want to check with your lender to see what home conditions could be cause for denying your mortgage application.

Getting approved for a mortgage is a convoluted process at best, but a mortgage advisor can help you to navigate the approval process with ease. Contact Warren Whitaker at 972.523.8353 or Warren@Lendhome.comyour local mortgage professional for more information and for more tips on how to ensure you get approved.

Plano home loansThere is so much to know when it comes to Plano home ownership that even wading into all of the information can seem overwhelming, but if there’s one thing you need when the time comes to purchasing a home, it’s to be prepared. Here are a few ways that you can ensure you’re ready for what a mortgage entails so that buying your dream home will be a positive experience you won’t regret.

Consider All Of Your Options

Instead of accepting the mortgage that your bank is offering you, it’s very important to do some research and determine what some of the best options out there are for you. While it’s entirely possible that the option pushed forward by your bank will work out, in the days of so much information online it’s silly to go into your biggest purchase blindfolded. Take some time out and read about the products available so that, when the time comes, you can make an educated decision.

Know Your Credit Historyplano home loans

Lenders will most definitely be digging through your finances and credit history for anything that might make them leery of your financial state, but you’ll want to be aware of your own standing so that you can be prepared for what this might entail. By getting your credit report and score before going through the process of acquiring a mortgage, you can fix any errors that might be on your credit report so that you’ll be prepared for the result when the time comes for pre-approval.

Plano Home LoansPlan For The Future Possibilities

If the mortgage amount you are planning on paying seems feasible on a month-to-month basis, it’s certainly a good place to start, but with the ever-fluctuating state of interest rates, you’ll need to prepare for this reality at the same time. It’s important to base the amount you’ll be spending each month off of the income and expenditures that you’ve worked out in a budget, but you’ll want to add in some wiggle room so that a jump in the rates won’t sink your dream of home ownership.

There are many things to be aware of when starting the process of purchasing a home, but delving into your credit history and doing the necessary background research can make for a smoother experience. If you’re looking for advice on purchasing a home,contact Warren Whitaker at 972.523.8353 or Warren@Lendhome.comyour local mortgage professional for more information.

The Prime Lending Rate – sometimes just called “Prime Rate”  – is the interest rate that banks charge each other for overnight loans. Some consumer rates – like ARMs – are set in relation to Prime.

Plano homesIn the US, Prime is affected by the Federal Reserve lending rate to banks; historically, Prime is about 3 percent above the Fed rate.

The video shows  an example.

  • The Federal Reserve loans to Bank A at 1%
  • Bank A loans to Bank B at 4%
  • Both banks – A & B – will recalculate variable-rate loans like ARMs on that 4% Prime figure.

ARM rates are frequently defined as “% above Prime” – that gap is usually called the “margin” or “spread.” Just remember those 3 layers in Prime: Federal Reserve Bank A Bank B And finally, YOUR rate.

Plano home loanWhen delving into the realities of home ownership in Plano, TX, there can be many factors involved that make it difficult to determine what you need to know and what can wait until later. If you happen to be a first-time buyer who’s looking for the best tips for purchasing a home, look no further than the following three pointers to set you on the right path

Number 1 – Get Familiar With Your Credit Score

If you haven’t looked at your credit report for a long time, it can be a daunting task to request this information. Fortunately, your credit report is free from AnnualCreditReport.com and it will prepare you for what lenders are going to see. By taking this important step, you will be able to determine any delinquent accounts or balances owing that have gone to collections, and hopefully have these cleaned up before they can become a problem for your mortgage.  Be aware that the credit report from AnnualCreditReport.com WILL NOT include your mortgage credit score.

Number 2 – Determine The Price You Can or Want To PayPlano Home Loan

While you may have a price in mind for what you’re willing to pay for a home, it’s important to determine your debt-to-income ratio before putting in an offer. Your DTI ratio can be determined by taking your total monthly costs, adding it to what you would be paying for a home and dividing it by your monthly gross income. If it’s a housing price that will work for you, this amount should equate to less than 45%.

Number 3 – Organize Your Housing and Work History

If you have a good history as a tenant, the next step will probably be the easiest of all, but it’s very important in order to prove you’re a responsible candidate for home ownership. A lender will need a 2 year history of your home addresses plus a 2 year history of your employment address.  A lender will use your Gross Monthly Income (income before taxes) to determine your DTI.

Plano Home LoansThere are a lot of things to know when it comes to buying a home, but if you’re a first time buyer the most important thing is to ensure that your finances are organized and that you’re not diving into more house than you can be approved for. By taking the time to determine your debt-to-income ratio and looking into your credit, you can ensure a positive first-time buying experience. If you’re wondering about homes for sale in your area, you may want to contact Warren Whitaker at 972.523.8353 or warren@lendhome.com, your trusted real estate professionals for more information.

Plano rentIf you’re at the stage in life where home ownership is nearly within your reach, you’re probably wondering whether you should start looking for a Plano home or whether you should just keep renting. Renting is easier and less hassle – people say, and it gives you more mobility. But…over the long term, all that rent money can really add up – and it eventually reaches a point where buying a home is a better deal.

So why is paying a high rent a worse option than buying a house and getting a mortgage? Here’s what you need to know.

Renting Doesn’t Generate Equity

One of the single biggest sources of wealth in the United States is home equity – as you pay down your mortgage, you invest more and more of your Plano Rental Homemoney into your property, and it appreciates in value. When you eventually sell that home, you make a profit. The monthly payment is something you’d have to make anyway, whether you rent or own – but when you rent, your monthly rent money lines someone else’s pockets, while when you own, paying down your mortgage actually creates wealth for you.  In the DFW area, residential real estate has appreciated between 8% and 15% per year.  Take a look at this recent Dallas Morning News graphic.

Renting Doesn’t Give You Access To Homeowner Tax Credits And Deductions

There are all sorts of tax benefits available to homeowners that renters simply can’t access. As a homeowner, you can deduct your mortgage interest from your taxes owing, reducing your taxable income – but there’s no such deduction for renters. You can also deduct property taxes and some closing costs when you buy a home – there are no corresponding tax benefits for renters.

There are also several tax credits available to homeowners that aren’t available to renters. Things like renovations or simply buying a home for the first time can give you tax benefits that renters can’t access.

If You Can Muster Up A Down Payment, Owning Is Cheaper In The Long Run

One of the biggest hurdles keeping young people out of the real estate market is the down payment. It’s not easy, but if you can save up enough money for a down payment, you’re actually better off buying a home than continuing to rent.

Plano real estateAccording to NTREIS, the median sales price of single-family homes sold by North Texas Realtors was $204,000. That’s up 9 percent from a year earlier, while the median monthly rent for an apartment is $1,550 in North Dallas. That means renting would cost $18,600 per year, while buying a home (assuming a 20% down payment and 30-year term) would cost $15,000 per year in mortgage payments. In other words, owning is about half as expensive as renting in the long run.

Don’t Forget About Down Payment Assistance Programs

Say What?  That’s right – Down payment assistance programs are often utilized by first time buyers as the tool to get into their first home by providing up to 5% of the loan amount as down payment assistance.  The DPA is a gift/grant that never has to be repaid. Qualifications do apply for all DPA programs.

Rent vs. Buy Calculators

For more information about determining if renting or buying a Plano Home, take a look here and utilize this nifty calculator.

Renting may be a good short-term solution, but over the long haul, owning is almost always better. Call Warren Whitaker at 972.523.8353 or Warren@LendHome.com, your mortgage professional to learn more about Down Payment Assistance Programs and how to qualify.

DTIThe real estate market is rife with terminology that can make a Plano home purchase seem more than a little complicated. If you’re currently looking for a Plano home and are considering your loan options, you may have even heard the term ‘Debt to Income’ ratio. In the interest of simplifying things, here are some insights on what this term means and how it can impact your home investment.

Determining Your ‘Debt to Income’ Ratio

It’s important to consider what exactly your Debt-to-income or DTI ratio is before your home purchase as this will quickly determine how much of a home loan you can actually qualify and be approved for. To calculate this number, take your monthly debt payments – including any credit card, car loan, student loan, child support, and mortgage payments – and divide them by your monthly gross income to get a percentage. For example, your total monthly debt is $700 + your new monthly home payment is $1600 = $2300 and you make $5800 per month in gross (before taxes) income, your DTI is 40% (2300 / 5800 = .40).

 What Your DTI Means To The LenderDTI

The DTI is a very important number when it comes to a home loan because it enables the bank to determine your financial situation. A DTI of 25% leaves some wiggle room, as most Lenders will allow a DTI percentage that runs up to 43%. In the case of the above example, this means that the most debt this person could take on per month is about $1749. While banks vary on this percentage, credit history plays an important part in the DTI that will be allowed.  With excellent credit, stable income, assets and reserves in the bank after closing, Highlands Residential Mortgage could potentially allow up to 54% DTI.

DebtPaying Down Your Debt Or Purchasing A Home

In the event that you have a DTI ratio that exceeds what your bank will allow, you will need to consider your debts before moving on to investing in a home. If you’re planning on purchasing a home in the next year, it’s a good idea to tackle high-interest debt first. However, if you happen to have a chunk of money saved up that you’re planning on putting into a down payment, it’s worth considering that putting more than 20% down may slightly increase the DTI percentage your bank will accept.

There are many fancy terms that go along with the world of real estate, but it’s important to understand what they mean so you can make them work in your favor. If you’re calculating your DTI ratio and are planning a home purchase down the road, call Warren Whitaker at 972.523.8353 or Warren@LendHome.com, your trusted mortgage professionals for more information.

Down paymentWhether or not you’re new to Plano real estate, there’s little doubt that you’ve heard the term down payment as it relates to purchasing a home. There’s a lot of different information out there in regards to how much this figure should be and it can be hard to determine exactly what the importance of this payment is. If you’re trying to determine the ideal amount to put down, here are some things to consider.

Explaining Down Payments And Why They’re Important

The down payment is probably one of the largest single payments you’ll make for anything, and this is why so many people save for years. When you buy a home, the down payment is the amount of money that goes into the initial home investment, and this is taken off of the cost of the house. In essence, while this money qualifies as an asset, it is tied up in paying off the total cost of your home.

The Differing Amounts For Down PaymentsDown payment

It’s often the case that many figures are thrown around in regards to the ideal down payment percentage, and they generally vary from 3-20% of the home’s cost. If you are paying a percentage on the low side of the scale, this can unfortunately mean that you will have fewer mortgage options and will be stuck with an increased interest rate. The amount you should pay depends on your financial health and purchasing commitment, but the larger the down payment is, the more minimal your monthly payments will be.

Down PaymentDeciding The Perfect Percentage

Saving up 20% of a home’s total price may seem like a lot of time and effort, but this can be the ideal amount to put down. In addition to lowered monthly payments and a better interest rate, you’ll also be able to avoid Private Mortgage Insurance (PMI), which is required if you put down less than 20%. There is no right answer to the question of how much to put towards a down payment, but you may end up spending less in the long run if you can invest more in the beginning.

There are many figures thrown around when it comes to real estate, but the amount of a down payment should be economically feasible for you and enable you to make your monthly payments consistently. If you’re planning on purchasing soon and are looking for home options, you may want to contact Warren Whitaker at 972.523.8353 or Warren@LendHome.com, your trusted mortgage professional for more information.

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