September 5- Texas Memorial Museum
September 6- Free Day of Yoga
September 7- Free Salsa Lessons at Speakeasy
September 8- Movies In The Park
September 9- Unplugged at The Grove
September 10- Austin Ghost Tour
UT Football
09/04/10 at Rice Houston, Texas 2:30 pm CT
09/11/10 vs. Wyoming Austin, Texas 6:00 pm CT
From Application to Closing
Once you’ve submitted your mortgage application and received a decision, the steps leading up to your closing will be unfamiliar. We want you to know what to expect. Prior to closing on your new home, you’ll need an appraisal, a home inspection, home insurance and title insurance.
PreApproval
Upon application credit check, and submission of your supporting documentation, your lender will have discussed what you can qualify for and have a preliminary plan for financing. It is preliminary because you may find a home at a different price or the rates may change. Your lender will be ready to issue a Conditional Approval letter upon the location of a home on which you’d like to make an offer.
Finding A Home
At this point, you’ll go home searching based on our preliminary financing plan. Your Realtor may want basic information on the financing plan as the Purchase contract does require some of this info. Once you have a home you’ll provide the lender with a contract.
Your Option Period
Your contract will give you an Option Period to get additional information on the home and decide to continue with the purchase. This usually includes your inspections and time for the Realtors and Sellers to get you information such as the survey, restrictions, and other info.
Appraisal
Upon the completions of your Option Period and your decision to proceed with the purchase, the lender will order an appraisal from a professional appraiser to determine the value of your home. Most loan programs require an appraisal to make sure the sale of the property would provide enough funds to repay the mortgage balance. This protects the lender in case of default, and can also help you make sure you don’t overpay for the home. An appraiser will give a professional assessment of the property’s value based on a number of factors, including:
Home Inspection
A professional home inspection can help put your mind at ease by identifying any potential issues with the home. In some cases, a home inspection may be required as part of your loan approval process. A home inspector will give a professional assessment of the property’s physical condition and notify you of any existing or potential problems. At minimum, the inspection should cover all the home’s major systems and structural elements, including the foundation, electrical system, heating and cooling systems, insulation, roofing, plumbing and all exterior features.
You should make every effort to be present during the inspection, so you can see any problems first hand. Accompanying the inspector can make the inspection report easier to understand, and you may even get some valuable maintenance tips. Your Realtor can make suggestions on Inspectors.
Home Insurance
Home insurance will protect the investment you’ve made in your home. Your policy will compensate you for damage done to your home or its contents by natural hazards such as fire and wind and will protect you from liability if someone is injured on your property.
Before you close on your mortgage, you’ll be required to show proof that you have purchased home insurance. Your lender will probably require you to purchase a minimum amount of coverage, usually equal to your loan amount. You may, however, want to purchase a larger policy to make sure you’re protected from additional losses.
Title Insurance
There are two types of title insurance: one protects the lender and one protects the borrower.
Title insurance is purchase as protection from claims against your ownership of the property. Such claims may be made by undisclosed spouses, heirs of previous owners, creditors holding liens against previous owners or other parties.
Your lender will most likely require you to purchase a title policy, which will cover their interests in the property. It’s up to you to purchase a policy to protect your interest in the home. Your home mortgage consultant will be able to recommend a title insurance company who can provide additional information about the policies available in your area.
BREAKING NEWS
Provided by IMMAAG
On August 16, 2010, the Federal Reserve Board (for reasons that are not completely clear, but possibly in a defensive move to preempt any chance for the new Director to do things his or her way) announced FIVE ACTIONS in almost 1,200 pages:
Check out the following links to learn more:
If you haven’t refinanced or are thinking of buying, I saw 4.5% (4.61APR on $200K) this am for a 30 year. This is not for everybody–you must be a #1 borrower with 740 Ficos, equity and job stability- My first house was at 13.5% fixed!!! Call if I can help.
Down payments vary from program to program. The most common downpayment requirements today are 3.5% for FHA (and this can be a gift from family members), 5% conventional (currently rather expensive in fees and rate and rather restrictive when qualifying), 10% down which is fairly inexpensive, and the most cost effective would be 20% down. VA loans require $0 down if the veteran has the eligibility.
Any time you put less than 20% down, you will pay extra, either in rate, closing costs, or mortgage insurance. but the closer to 20%, the cheaper.
Prepaids are additional cash to close. Your payment will be made up of Principal and Interest, 1/12 of your yearly taxes and 1/12 of your yearly insurances. An escrow account (forced savings if you will) will be set up so that when each of these are billed the money is in there to pay for taxes and insuance. Typically in Texas, you will pay your regular homeowners policy amount for 1 year, 3 months taxes, 3 months insurance, and simple interest to the first of the following month for prepaids. This is in additions to your down payment and your closing costs.
Points and Origination fees are technically 2 different things–but as time has passed they serve the same purpose. A Point/Origination is 1% of the loan amount. They “buy” you a better rate. For instance, 5.0 % might be quoted as 1% origination and 1% Points (1+1), whereas, 5.25% might be 1% origination (0+1) and 5.5% might be no Points and no Origination (0+0). Usually 1 point “buys” you 1/4 in rate on a 30 year rate. Also as a rule of thumb on a 30 year note, it takes about 5 years to break even on paying points/origination–not counting tax benefits, future value of money, and other things.
What do they (the credit bureaus that give you the score) look for? They basically want to see that you use credit and use it wisely, that you are able and willing to pay back all debts owed by you.
The obvious: Do you pay your obigations on time?
The not so obvious: Do you have a lot of (or no) outstanding credit? You should have at least one major credit card (MC,VISA, AMEX) and at least 1 other creditor that reports to the credit bureaus. Your credit card balances should be less than 40% of your limit. For instance if you have a $1000 credit limit, you shouldn’t have more than $400 on it card for maximum credit ratings. If you have a number of credit cards then spread your debt out. Using the department store cards can cause a bit of a problem. Ususally people who use themhave a number of them, with $600 balances, but their Limits are only $1000.
More to come in Credit #3
Real Estate Outlook: Pending Sales Up
by Kenneth R. Harney
Signs of recovery in the housing market and the national economy keep popping up – and are even beginning to surprise veteran analysts on Wall Street and elsewhere.
Though economists had expected the latest pending home sales index to be down – after all, February saw the worst weather in decades in large parts of the U.S. – the numbers actually took a big bounce.
The National Association of Realtors reported that pending sales jumped 8.2 percent for the month and were 17 percent higher than they were at the same time last year.
<Contracts in the Northeast were up by 9 percent, the Midwest by 22 percent and in the South by 9 percent. Only the Western region came in negative – down by 5 percent. But even in the West, pending sales were 15 percent higher than they were the year before.
With the April 30 deadline for sales contracts to qualify for the two housing tax credits just weeks away, analysts expect home sales activity to remain high. Lawrence Yun, chief economist for the National Association of Realtors, says he thinks we may be in “the early stages of a second surge” of real estate transactions that could continue into mid-year.
But let’s be clear: Home sales are not only being pushed by tax credits. Far stronger impetus is coming from steadily improving conditions in the national economy and rising consumer perceptions that finally things are getting better.
Look at the latest monthly employment numbers from the Bureau of Labor Statistics. For the first time in nearly two years, there was significant new job creation during the month of March – 162,000 payroll positions.
That was helped along in part by Census Bureau hiring to conduct the 2010 census, but there was growth elsewhere as well: 15,000 net new construction jobs, 17,000 manufacturing jobs, and 11,000 business services jobs.
Home Depot and other big household-oriented retailers announced that they have begun hiring again. Retails sales nationwide jumped by 23 percent for the month; home furnishings and furniture sales were up 14 percent
Mark Zandi, chief economist for Moody’s Economy.com, told the New York Times that “consumers are (getting) almost giddy” in their zeal to resume spending, and they are cutting their savings to fund their new purchases.
All of this, of course, is great news for housing, which is hardwired to employment growth and consumer confidence
But don’t assume we’re out of the woods quite yet — not with the national unemployment rate stuck at 9.7 percent. And there’s another challenge taking shape on the horizon: Rising mortgage rates that are inevitable in an economy rebounding out of recession.
Published: April 12, 2010
FICO Scores. Credit Scores. Same thing. Basically, these are statistical models that rate the specific characteristics of your credit history. They’ve been in place about 10 years. At first they were “clues” to help lenders make good lending calls. Now they’re the gold standard. If you don’t have good (and I mean very good) credit scores, you may not be able to borrow or you’ll pay dearly in the terms of the credit you’re offered. In mortgage lending you’ll pay a premium if you are not a 740 or higher. Said a different way, you’ll get much better terms if you have a 740 or higher score.
Stay tuned for more info….
