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    • Home
    • New Home Buyers
    • Dream Homes
      • Current Listings
      • Recently Sold
    • Useful Information
      • For Sale By Owner (FSBO)
      • Handling Foreclosures
      • Loan Information
      • Moving Benefits
      • Local Schools
      • Fort Hood
      • Rentals
    • Contact Us
  • Home
  • New Home Buyers
  • Dream Homes
    • Current Listings
    • Recently Sold
  • Useful Information
    • For Sale By Owner (FSBO)
    • Handling Foreclosures
    • Loan Information
    • Moving Benefits
    • Local Schools
    • Fort Hood
    • Rentals
  • Contact Us

Century 21: Premier Realtors

Century 21: Premier Realtors

Century 21: Premier Realtors

Century 21: Premier Realtors

Century 21: Premier Realtors

Century 21: Premier Realtors

LOANS / MORTGAGES

Factors such as your FICO / Credit Score, current employment, assets, debt to income ratio, etc. paints a picture to a lender on how much risk they will underwrite to loan you money. 


There are primarily two common mortgage categories: 

Conventional and Government Back Loans


Government Backed Loans:

  • The Federal Housing Administration (FHA)
  • The Department of Veterans Affairs (DVA) - Usually referred to as VA
  • Texas Veterans Land Board Program (TVLB)
  • Other State, County or City Backed Subsidized Loan Programs


Below are some potential types of mortgages you can apply for through your lender of choice. 


Let me know when you would like to move forward  with finding and  purchasing your new home!

Selecting A Lender

Your Current Bank

I would assume you like your bank if you have been with them for a while; probably good customer service. They could verify funds quickly and can see your track record. However, consider shopping around. Different lenders can have variations in loan options, APR, points, closing costs and other fees. Consider a local lender if you prefer face to face communication.

Questions To Ask Lenders

What types of loans do they offer? Ask for a specific loan if you know what you want.

What is their turn-around on pre-approval, appraisals, lists of mandatory lender repairs and closing?

What fees do they charge to originate and issue the loan?

Can any of the fees be waived, reduced or be part of the loan? Fees can be negotiated.

Do they offer or allow documents to be signed online?

Do they have a down payment requirement?

Do they have a pre-payment penalty?


You do not want your loan process to be the delay in closing.

Obtaining A Loan

Debt To Income (DTI) Ratio

Debt To Income (DTI) Ratio

Debt To Income (DTI) Ratio

This is pretty easy to figure out. The below military example will only take into account BAH and Base Pay.


A married Sergeant with six years of service makes $3,272 in Base Pay and $1,236 in BAH.


Gross monthly income: $4,508

Estimated monthly debt: $1,200


Divide your debt by your income:

1200/4508 = 0.266


27% DTI Ratio

Pre-Qualification

Debt To Income (DTI) Ratio

Debt To Income (DTI) Ratio

There are many calculators online to use and can be fairly accurate. However, below you will see there are many loan options. I suggest just going to your lender and find out if/what you qualify for; regardless of Credit Score.


Your lender should initially collect information on your assets and debts. The typical thresholds for DTI ratios are listed below in the Common Mortgage Types. 


The difference between your debt to income ratio and that threshold will allow your lender to compute the estimated pre-qualified loan amount.

Pre-Approval

Debt To Income (DTI) Ratio

Pre-Approval

This process is a little more lengthy on both you and the lender's time. Ask your lender what proof of assets/debts, employment, etc they will require upon your application submission. This is where they verify what you previously told the lender.


This output from your lender is an approval for a specific loan amount. The interest rate and potential monthly payments may be included.


Being pre-approved can be more enticing to a seller. It shows that you are more serious. You do not have to found a home yet to apply.

Credit Scores

Equifax

Transunion

Transunion

You are allowed 1 FREE report per company per year. 

Learn more

Transunion

Transunion

Transunion

Get one now or all three. Each report can be slightly different. A lender will pull all three and usually use the middle score.

Learn more

Experian

Transunion

Experian

Obtaining one every four months will keep your fingers on the pulse of where your credit is heading or any identity theft.

Learn more

Common Mortgage Types - Compared Side By Side

There are other variations - Such as the VA charges a VA funding fee. The above covers a majority of the differences but engage your lender for their specifics.

Texas Veterans Land Board (VLB)

Land Loans

The VLB Veterans Land Loan Program is the only one of its kind in the nation—giving Texas Veterans and Military Members the opportunity to borrow money to purchase land at favorable interest rates and terms while only requiring a minimum 5% down payment.

Home Loans

In 1983, the Legislature created the VLB Veterans Housing Assistance Program to assist Texas Veterans and Military Members in purchasing a home. Through this program, eligible Texas Veterans and Military Members have an opportunity to purchase a home with an unbeatable, low-interest loan with little or no money down.

Home Improvement Loans

This program was introduced in 1986 to provide below-market interest rate loans to qualified Texas Veterans and Military Members for home repairs and improvements to their existing homes.  

SCRA Assistance

Reservists and National Guard troops with a VLB Land, Home or Home Improvement Loan may be able to defer interest payments when called up for active duty, thanks to the Servicemembers Civil Relief Act (SCRA).


All Information pulled from the VLB website. 

Click on the picture to learn more.

Home Ready Mortgage

Low income 

First-time or repeat homebuyers 

Limited cash for down payment (3% currently)

Credit score ≥ 620; borrowers with credit scores ≥ 680 may get even better pricing

 Supplemental boarder or rental income 

Looking to purchase or refinance


If all occupying borrowers are first-time homebuyers, then at least one borrower is required to take homeownership education, regardless of Loan To Value (LTV) ratio.


-Fannie Mae Website

Find out more

Home Possible Mortgage

Down payment can come from a variety of sources, including family, employer-assistance programs, secondary financing, and sweat equity.


Qualifying income is limited to 80% of Area Median Income (AMI), effective July 28, 2019. There are no geographic limits on loan amounts.


Low down payment with a maximum of 97% Loan To Value (LTV). (This means 3% down payment)


Mortgage insurance (MI) on 1-unit properties can be cancelled after loan balance drops below 80% of the home's appraised value and cancellation criteria are met. MI coverage requirements are reduced for LTV ratios above 90%.


Credit fees are capped and less than standard fees for all loans over 80% LTV.


-Freddie Mac Website

Find out more

Homes for Texas Heroes Program

At the Texas State Affordable Housing Corporation (TSAHC), we help Texans buy a home for themselves and their families. We are a nonprofit organization that was created by the Texas Legislature to help Texans achieve their dream of homeownership. 


Our Homes for Texas Heroes Program offers home loans and down payment assistance for teachers, police officers, firefighters and EMS personnel, corrections officers, and veterans. 


-TSAHC Website

Find out more

Home Sweet Texas Home

Another program under the Texas State Affordable Housing Corporation:


Our Home Sweet Texas Home Loan Program offers home loans and down payment assistance to low and moderate-income families.


-TSAHC Website

Find out more

Concerned About Your Current Home?

Purchase Contingency

One option is to set a contingency, with the TREC promulgated form, that your home is  sold prior to closing on your new home. This type of contingency is generally not looked upon favorably to a seller.

Bridge Loan

Another option is to apply for a Bridge Loan. This is typically a short term loan that will allow you to put a down payment on your new home while your current home is on the market.

Mortgage Payment

Most lenders set up an escrow account for you. It is good to verify they will. Most loans will include your principle, interest, (property) taxes and insurance (PITI). The lender does this so your insurance and property taxes are paid and current.


Amortized loans typically have the same monthly payments. If your payment increases, look to see if there was any change to your property taxes or insurance. If not, contact your lender.

Disclaimer

I am not recommending one mortgage type over another nor do I receive anything from any programs listed. This information is solely being provided to help educate you. 


Information can change over time. Engage your lender or Government entity that runs a particular program that interests you for more information.


Nobody involved with this website is a Texas Licensed Loan Officer or Attorney. Questions specific to that line of work should be directed to those types of professionals.


Not all lenders and mortgages are the same. There is nothing wrong with shopping around to find a lender you trust and who is reputable.

Copyright © 2022 KC21 Properties - All Rights Reserved.

©2022 Century 21 Real Estate LLC. All rights reserved. CENTURY 21®, the CENTURY 21 Logo and C21® are service marks owned by Century 21 Real Estate LLC. Century 21 Real Estate LLC fully supports the principles of the Fair Housing Act and the Equal Opportunity Act. Each office is independently owned and operated. Listing information is deemed reliable but not guaranteed accurate.

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