Financing Tips

WHO TOLD YOU THAT YOU COULD NOT BUY A HOME?

OWNING YOUR OWN HOME IS THE SINGLE MOST IMPORTANT FINANCIAL DECISION YOU WILL EVER MAKE. I WILL GUIDE YOU ON THE PATH TO HOME OWNERSHIP. LET’S BEGIN NOW!

Dear Neighbor,

My name is David Bradley. I want to thank you for taking the time to visit my website, where I guarantee you’ll find plenty of helpful information to assist you in purchasing your new home or refinancing your current mortgage. I am a Mortgage Consultant serving Dallas, Texas and the surrounding areas.

If you’re planning to buy your next home, your first home, that dream home, a condo, vacation home, investment property or looking to refinance in Texas or the surrounding areas, you will find that this site is a complete resource full of insider secrets that will allow you to choose the loan program best suited to your financial needs.

I make it fast and easy for all kinds of people-including first-time homebuyers, small business owners, and homebuyers with perfect or less-than-perfect credit to get the loan you need for the home you want.

David Bradley
Founder, Just Mortgages

Your Total Mortgage Payment

Your monthly mortgage payment is typically made up of four components: principal, interest, taxes and insurance, together known as PITI.

The principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. The interest is the fee charged for borrowing money. You can determine the amount of principal and interest by using our Mortgage Payment Calculator.

Taxes refer to property taxes your community levies which are generally based on a percentage of the value of your home. The lender usually collects 1/12th of the yearly property tax bill each month. The lender collects taxes in advance and places the money in an escrow fund.

Lenders won’t let you close on your home loan if you don’t have hazard insurance to cover your home and your personal property against losses from fire, theft, bad weather and other causes. The insurance amount is collected and paid much like the taxes. Each month 1/12th of the insurance bill is collected and stored in an escrow account until the bill is due. Even if you pay cash for your home, it is a good idea to buy hazard insurance in the event your home is damaged or destroyed.

Principal and interest comprise the bulk of your monthly payments in a process called amortization, which reduces your debt over a fixed period of time. With amortization, your initial monthly payments are largely interest, and as the loan matures, a greater portion of your payment is allocated toward the principal.

For more information on what to expect for your mortgage payment, please call our Dallas/Fort Worth Texas mortgage office at 972-248-1390 or complete the form below to receive our monthly newsletter.

Two Key Factors in Qualifying for a Home Loan

When a lender makes a decision about a mortgage application, they consider two basic factors: 1) your ability and 2) your willingness to repay the loan.

Ability to repay the mortgage is determined by verifying your current employment and analyzing your total income. Lenders prefer for you to have been employed at the same place for at least two years, or at least be in the same line of work for a few years. Your proposed monthly payment will be compared to your monthly income and debt.

Willingness to repay is influenced by how you have paid previous loans and by examining how the property will be used. Willingness can be gauged by your credit report and previous commitments to pay rent and/or utility bills. There is also a greater tendency to stick with your payments if you live in a house as opposed to a rental property or vacation home.

It is important to remember that there are no set rules and each applicant is handled on a case-by-case basis. Many applicants come up a little short in one area, but make up for it with other strong points. These compensating factors may include a large down payment, solid employment, extensive educational background or overall financial health.

For applicants who need to make a lower down payment, mortgage insurance is protection for the lender in case you stop making payments. This allows low and moderate income families to become homeowners with low down payment programs.

For more information on what to expect to qualify for your mortgage, please call our Dallas/Fort Worth Texas mortgage office at 972-248-1390 or complete the form below to receive our monthly newsletter.

12 Ways to Save Money on Homeowners Insurance

1. Shop Around
Friends, family, the phone book and the Internet are some of the sources you can use to find homeowners insurers. Get a wide range of prices from several companies. But don’t consider price alone. The insurer you select should offer both a fair price and excellent service. Quality service may cost a bit more, but you buy insurance in case you need to make a claim, so it’s important to get a company with a good reputation. Talk to a number of insurers to get a feeling for the type of service they give. Ask them what they would do to lower your costs. Check the financial ratings of the companies with AM Best or Standard and Poor’s.

2. Raise Your Deductible
Deductibles are the amount of money you have to pay toward a loss before your insurance company starts to pay. Deductibles on homeowners policies typically start at $250. Increase your deductible to
$ 500 — save up to 12 percent
$1,000 — save up to 24 percent
$2,500 — save up to 30 percent
$5,000 — save up to 37 percent

3. Buy Your Home and Auto Policies from the Same Insurer
Some companies that sell homeowners, auto and liability coverage will take 5 to 15 percent off your premium if you buy two or more policies from them.

4. When Buying a Home Consider How Much Insuring It Will Cost
A new home’s electrical, heating and plumbing systems and overall structure are likely to be in better shape than those of an older house. Insurers may offer you a discount of 8 to 15 percent if your house is new. Check the home’s construction: In the East brick is better, because of its resistance to wind damage, and in the West frame is better, because of its resistance to earthquake damage. Choosing wisely could cut your premium by 5 to 15 percent. Avoiding areas that are prone to floods can save you about $400 a year for flood insurance. Homeowners insurance does not cover flood-related damage. The closer your house is to firefighters and their equipment, the lower your premium will be.

5. Insure Your House, Not the Land
The land under your house isn’t at risk from theft, windstorm, fire and the other perils covered in your homeowners policy. So don’t include its value in deciding how much homeowners insurance to buy. If you do, you’ll pay a higher premium than you should.

6. Improve Your Home Security and Safety
You can usually get discounts of at least 5 percent for a smoke detector, burglar alarm, or dead-bolt locks. Some companies offer to cut your premium by as much as 15 or 20 percent if you install a sophisticated sprinkler system and a fire and burglar alarm that rings at the police station or other monitoring facility. These systems aren’t cheap and not every system qualifies for the discount. Before you buy such a system, find out what kind your insurer recommends and how much the device would cost and how much you’d save on premiums.

7. Stop Smoking
Smoking accounts for more than 23,000 residential fires a year. That’s why some insurers offer to reduce premiums if all the residents in a house don’t smoke.

8. Seek Out Discounts for Seniors
Retired people stay at home more and spot fires sooner than working people and have more time for maintaining their homes. If you’re at least 55 years old and retired, you may qualify for a discount of up to 10 percent at some companies.

9. See If You Can Get Group Coverage
Alumni and business associations often work out an insurance package with an insurance company, which includes a discount for association members. Ask your association’s director if an insurer is offering a discount on homeowners insurance to you and your fellow graduates or colleagues.

10. Stay With an Insurer
If you’ve kept your coverage with a company for several years, you may receive special consideration. Several insurers will reduce their premiums by 5 percent if you stay with them for 3 to 5 years; by 10 percent if you remain a policyholder for 6 years or more.

11. Compare the Limits in Your Policy to the Value of Your Possessions at Least Once a Year
You want your policy to cover any major purchases or additions to your home. But you don’t want to spend money for coverage you don’t need.

12. Look For Private Insurance First
If you live in a high risk area, one that is especially vulnerable to coastal storms, fires, or crime, and have been buying your homeowners insurance through a government plan, you should check with an insurance agent or company representative. You may find that there are steps you can take that would allow you to buy insurance at a lower price in the private market.

If you would like to schedule an appointment with David please call our Dallas/Fort Worth, Just Mortgages Office at 972-248-1390 or use the form below for our free newsletter!

Closing Costs Explained

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Closing Costs Explained

Closing costs are the actual expenses that the lender incurs in the origination of a new home loan. Some of the costs are related to your loan application, such as the expense of a credit report on all applicants. Other fees are related to the house itself, such as the property appraisal. Others are payment to the lender for processing your application, such as the loan origination fee.

Unless the seller offers to pay them for you, these expenses are charged to the buyer and often runs between 2 and 3 percent of the amount being borrowed. Because different states have different fees and taxes that are a part of these costs, it’s impossible to generalize nationwide.

Common closing costs can include processing and underwriting fee, mortgage insurance premium, appraisal fee, the cost of a credit report, tax service fee, application, commitment, wire transfer fee, etc… Escrow accounts are often required for many loans for homeowners insurance, real estate taxes, and homeowners associations and require cash deposits at closing.

After your initial meeting with a mortgage professional, you should receive a Good Faith Estimate (GFE) that shows all of the closing costs associated with your mortgage application. If a credit report costs $100 at one shop and $20 at another, but the second lender’s deal is better overall, point out the discrepancy and ask the preferred company to lower its charge. Just remember, any third party fees have been previously negotiated and established between the mortgage company and third party.

Refinance Considerations

When you’re making your decision, there are several things to keep in mind.

If your current interest rate is significantly higher than today’s lowest rates, you may be able to roll your loan costs into the loan and still get a lower rate than you have today, thereby reducing your interest payments and saving money immediately.

Second, if you are planning to stay in your home for at least three to five years, it may make sense to pay “points” (a point equals 1% of the loan amount) and closing costs to get the lowest available rate.

And third, you can avoid laying out cash and still get a low rate by adding the points and closing costs to your new mortgage. Does that mean shouldering a lot of extra debt? Not necessarily. If you’ve had your current mortgage for at least three years, you’ve probably reduced your balance by several thousand dollars. So you may be able to tack your closing costs onto your new loan and still end up with a mortgage that’s smaller than your original one — plus, of course, a lower rate and lower monthly payment.