The housing market is making affordability a big issue for many would be buyers. This can make buying a fixer-upper a lot more tempting. We’ve all seen the home make-over shows with amazing before and afters, but should you do it? Here are a few things to consider: 1. Know Your Limits How much of the work can you do. How much time do you have to put into renovations. Are you prepared to live in a work zone for a while 2. Work Out Costs In Advance Have a contractor walk through the inspection with you and get a written estimate for work he would do. If you are doing the work yourself price the costs of supplies, either way add 15% to the costs because surprises are likely. 3. Check Permitting Costs and Procedures C heck with local officials to see if the work requires a permit and the permit costs. 4. Be Extra Careful with Structural Issues If the house requires structural repairs then double check the work and pricing. Hire a structural engineer to do an inspection and if structural work needs to be done make sure your bid discounts this work 5. Include Inspection Contingencies Make sure you hire professional inspectors and check for hidden issues like mold, piping issues, pest damage etc. And if things come up ask for discounts. And if too many red flags come up or the seller won’t properly discount the costs for repair then you may want walk away and keep looking!

Today we are going to discuss two common mortgage loan products, and the pros and cons of both FHA and Conventional Loans. Many people are familiar with the 20% down, good credit 30 year fixed conventional loan scenario. FHA loans on the other hand are designed for people who might have difficulty qualifying for a conventional loan to still get funding to buy a house. FHA Loans offer down payments as low as 3.5% and are more lenient on credit scores and past financial issues. Borrowers can qualify for FHA loans with as low as 580 credit scores. One of the downsides of FHA loans are mortgage insurance requirements, if you put down less than 10% you will be required to pay monthly insurance for the duration of the loan, as well paying Upfront Mortgage Insurance Premium. The best choice for you? Give us a call or apply online and we will analysis what programs suits your needs 😊

Throughout the country (and in some areas more than others) low inventory in the housing market and high rent prices have many home owners adding or considering adding ADUs (which stands for Accessory Dwelling Units). ADUs often called granny flats, are guest houses or rooms added to garages to create rental income for home owners. Home owners typically add ADUs to increase cash flow, as well as looking for their property value to appreciate. Whether ADUs are right for you, depends on a number of factors. ADUs often costs at least $100,000 to build so being in a high rent market helps to offset the initial investment. You’ll also need to make sure local ordinances allow them and what the regulations are. The old real estate adage about location stays true for ADUs as well. If you are in an area where rents are high or a popular vacation destination, then ADUs can make sense. Again you’ll need to check the local zoning and if you build one you will also need to have updated insurance to cover the ADU. Check with us to learn more and to see what financing terms you qualify for.

A lot of young Americans went to college, studied hard but in addition to getting a diploma, they also graduated with debt. Having loans is not a deal breaker but it will factor into the important debt-to-income (or DTI) ratio, and mortgage underwriters are primarily looking at the numbers so having it be student loan debt isn't different from a car loan in the math. Strategies to get approved with student loan debt Pay it down - this maybe easier said than done but if you have extra money or got a raise then try to pay down the debt Consolidate it - if you can consolidate your debt and lower your monthly payment (even not the overall loan amount) this will help your monthly DTI ratio Co-sign - this can be a delicate process but its one to consider if you have a trustworthy, reliable family member or friend Programs and Assistance Sometimes a conventional mortgage might not be possible but there are options! FHA, VA, and USDA loans offer a lot more flexibility and lower down payments than traditional mortgages Grants and Programs - there are a number of grants and programs out there from the federal to local level that you may qualify for If you're interested in qualifying for a loan but worried about your student debt give us a call or apply online and we can see what best fits your needs!

The home-buying journey usually starts with a preapproval. This preapproval not only reflects your seriousness about purchasing a house but also provides clarity about how much you can afford. However, as the home hunt progresses, you might need to increase the preapproved amount. What is Mortgage Preapproval? Mortgage preapproval is essentially a promise from the lender that you are likely to qualify for a mortgage, based on your financial situation. This involves a basic application where you submit details about your assets, income, and debts. This is not a guarantee, but a significant step indicating your creditworthiness. Determining the Preapproval Amount The preapproval amount is primarily influenced by factors like your credit score, income, debt load, and assets. An appraisal of the property ensures its value justifies the mortgage amount. Enhancing the Preapproval Amount If you need to increase the preapproved sum, the following strategies can be employed: Boost Your Credit Score: A higher score can qualify you for a larger loan by lowering the interest rate. Timely payments and cautious use of available credit can enhance your score. Present More Income: Besides your primary income, reliable secondary sources like dividends, rental income, or even alimony can be used to reflect a higher earning. Pay Off Other Debt: A lower debt-to-income ratio can amplify the loan you qualify for. Reducing credit card balances or paying off loans can significantly help. Increase Down Payment: Putting down at least 20 percent can save you from PMI costs, thus allowing a bigger loan. Explore Varied Loan Types: While fixed-rate loans offer predictability, adjustable-rate mortgages might provide lower initial rates. If you're planning to sell or refinance before the rate adjusts, ARMs might be beneficial. Add a Co-borrower: A co-borrower can enhance the combined income on the application, potentially leading to a higher loan amount. Accumulate Cash Reserves: Demonstrating financial responsibility by showcasing additional assets can boost lender's confidence in you. Ultimately, securing a high preapproval amount requires a combination of strong credit, a stable income, and low debt. Getting Started If you aren't sure how much you can get pre-approved go to our website and fill out our 30 second pre-approval engine.

Embark on your journey as a first-time home buyer in Texas with our comprehensive guide. Discover expert tips on navigating the real estate market, securing finances, and personalizing your new home. Essential reading for anyone looking to make their Texas dream home a reality.

The dream of owning a home is a significant milestone in many people's lives, and for first-time home buyers in Texas, it's an exciting journey filled with both challenges and rewards. Texas, with its diverse cities and booming real estate market, offers a unique experience for those looking to purchase their first home. In this article, we will explore the key considerations and steps that first-time home buyers in the Lone Star State should keep in mind.

The Texas Real Estate Landscape: Texas is known for its vast landscapes, vibrant culture, and economic opportunities. The state's diverse regions, from the bustling metropolitan areas of Dallas, Houston, and Austin to the charming small towns, provide a wide range of options for first-time home buyers. Understanding the Texas real estate market is essential to make informed decisions.

Budgeting and Financial Preparedness: Before embarking on the home buying journey, it's crucial to establish a realistic budget. Take into account your income, expenses, and savings. Utilize online tools and consult with financial advisors if needed to determine how much you can afford for a down payment, monthly mortgage payments, and other homeownership-related expenses.

Mortgage Options:Texas offers various mortgage options designed to accommodate first-time home buyers. These include FHA loans, VA loans (for eligible veterans and active-duty military personnel), and conventional loans. Each option has its unique requirements and benefits, so it's essential to explore them and choose the one that suits your financial situation and goals.

Down Payment Assistance Programs: First-time home buyers in Texas can take advantage of down payment assistance programs, which provide financial assistance for the initial home purchase costs. These programs aim to make homeownership more accessible, particularly for those with limited funds for a down payment. The Texas State Affordable Housing Corporation (TSAHC) and local housing authorities offer valuable resources and information about such programs.

Choosing the Right Location: Texas offers a wide range of communities, each with its own unique charm and amenities. Consider factors like proximity to work, school districts, safety, and access to amenities when selecting your ideal location. Texas' cities and towns provide diverse living experiences, catering to a range of preferences.

Home Inspection and Negotiation: Once you've found a potential home, don't skip the home inspection process. A professional inspection can uncover any hidden issues with the property, helping you make an informed decision. Additionally, negotiate with the seller to ensure the terms of the deal align with your needs and budget.

Closing Costs and Additional Expenses: Remember that there are additional costs associated with closing the deal, such as title insurance, appraisal fees, and property taxes. Factor in these expenses to avoid any last-minute surprises.

Homeownership Education: Texas offers homeownership education programs designed to equip first-time buyers with the knowledge and skills needed to navigate the process successfully. These programs cover topics such as budgeting, mortgage options, and home maintenance, providing valuable insights for a smooth transition into homeownership.

Becoming a first-time home buyer in Texas is an exciting journey filled with opportunities. By taking the time to understand the Texas real estate market, budgeting effectively, exploring mortgage options, and utilizing available resources, you can make informed decisions and turn your homeownership dream into a reality. Texas offers a rich and diverse range of communities, each with its own unique character, ensuring that there is a perfect place for every aspiring homeowner in the Lone Star State.

The news from the Federal Reserve this week is a pause on rate hikes and while the Fed does not set these rates outright, its monetary policies and decisions inevitably echo through the housing market. This relationship has been notably evident through the 11 rate hikes since early 2022, leading to the Fed's recent announcement of a pause in September. A Glimmer of Hope for the Housing Market Housing economists have found solace in this pause, with anticipations that the steep incline in mortgage rates may be nearing its terminus. Mike Fratantoni, the Chief Economist at the Mortgage Bankers Association, states, “We anticipate a continual decline in inflation, aligning it closer to the Fed’s target. Concurrently, the job market is projected to decelerate, reflecting expectations that the Fed’s 2024 movements will be characterized by cuts instead of increments. This shift is foreseen to ameliorate affordability for prospective homebuyers.” The Mechanisms of the Federal Reserve The Federal Reserve delineates the borrowing expenses for short-term loans through modifications in its federal funds rate. This integral rate defines the interest paid by banks to each other for overnight reserve borrowing from the Fed. Since 2022, the elevation of this fundamental rate was adopted as a strategy by the Fed to mitigate inflation, inadvertently escalating the borrowing expenses for Americans. It is crucial to note that fixed-rate mortgages, which dominate the home loan sector, do not replicate the federal funds rate. Instead, they are anchored to the 10-year Treasury yield. However, the fed funds rate does shape the contours of short-term loans like credit card rates and adjustable-rate mortgages. The Federal Reserve also engages in the purchase and sale of debt securities, sustaining the credit flow and subsequently impacting mortgage rates. Diverging Influences on Mortgage Rates The intricacies of fixed-rate mortgages are inherently tied to the 10-year Treasury yield. The fluctuations in this yield reverberate through fixed-rate mortgages, although the exact mortgage rate maintains a gap with the yield. This gap has extended to 3 percentage points through much of 2023, inflating the cost of mortgages. Mortgage rates move based on variety of factors including inflation, supply and demand balance in mortgage lending, and the secondary mortgage market dynamics. Of course if you're looking to finance a home loan check with us - you can fill out our 60 second analysis on our website or just schedule a meeting and we can review your options and see what best fits your needs!

What's a 10/1 ARM? An ARM is a mortgage with an interest rate that can adjust over time in response to changes in the market. The 10/1 ARM has a fixed interest rate for the first decade, followed by annual rate adjustments for the next 20 years. This makes it distinct from traditional fixed-rate mortgages which lock in one rate for the entirety of the loan term. The beauty of the 10/1 ARM lies in the balance it offers: the certainty of a fixed rate for a substantial period and the potential savings from rate adjustments thereafter. How the 10/1 ARM Rate Works: Essentially, the interest rate on a 10/1 ARM is determined by a combination of a fixed margin rate and a variable index rate. The index rate reflects general market interest rates and can move up or down, while the margin remains constant. Lenders often offer a cap on how much the interest rate can adjust. For instance, a 2/2/5 cap structure means: A maximum of 2% increase at the first adjustment after 10 years. A maximum of 2% increase for subsequent annual adjustments. A total maximum of 5% increase over the life of the loan above the starting rate. The Good and the Bad of 10/1 ARM: Pros: Initial Savings: With typically lower initial interest rates than fixed-rate mortgages, the 10/1 ARM offers initial cost savings. Potential for More Home: The lower initial payment might enable you to afford a larger or better-situated house. Further Savings: If market rates fall after the fixed period, your interest rate and payment can also decrease. Cons: Future Cost Risks: After the 10-year fixed period, you are exposed to potential rate hikes. Complexity: With multiple variables at play – rate caps, index rate changes, and resets – ARMs can be complex to understand. The Temptation of Interest-Only Payments: Some ARMs offer the option to pay only interest initially, but this can lead to much higher payments later and risk of negative equity if property values decline. Comparing the 10/1 ARM with Other Mortgages: 10/1 ARM vs 5/1 ARM: The shorter five-year fixed period of the 5/1 ARM typically offers a lower initial rate but exposes the borrower to rate adjustments sooner. 10/1 ARM vs 7/1 ARM: With a 7/1 ARM, rate adjustments start after seven years, offering a middle ground between the 5/1 and 10/1 ARM. 10/1 ARM vs 30-year Fixed: While the 30-year fixed offers rate certainty, the 10/1 ARM can offer initial savings and the potential for more if rates decrease. Is the 10/1 ARM for You? The decision rests on your unique situation. Consider: The initial rate being offered. How long you intend to stay in the home. Your risk tolerance regarding future rate adjustments. If the initial rate is attractive and you don't see yourself in the home for significantly more than a decade, the 10/1 ARM might offer significant benefits. In conclusion, the 10/1 ARM presents an interesting option for homeowners who wish to capitalize on initial savings, while also taking a calculated risk on future interest rates. Schedule a consultation on our website and we can review if a 10/1 ARM is right for you.

Home ownership is part of the American dream and often thought of as a step towards financial stability. For parents, the thought of helping their child set foot on this path can be both appealing and daunting. Here's an in-depth look at why and how parents can provide that initial boost. Why Consider Gifting a Down Payment? In 2022, the National Association of Realtors revealed an intriguing statistic: 22% of first-time homebuyers were aided by gift funds from family or friends. This underscores the trend of families stepping in to aid the next generation in achieving their homeownership dreams. In today's environment, skyrocketing rents, expensive homes, and the looming shadow of student debt make saving for a down payment increasingly challenging for many young people. A down payment gift is a direct way to benefit the child without the long-term obligations and risks associated with co-signing. Things to Consider Before Gifting 1. Your Financial Health: Before jumping in, it's crucial to analyze your financial situation. Gifting shouldn't jeopardize your retirement plans or other financial goals. 2. Your Child’s Financial Savvy: Ensure that your child has the financial knowledge and responsibility to manage homeownership. 3. Tax Implications: Thankfully, gifting for down payments often has fewer tax implications. For 2023, parents can gift up to $34,000 to their child without triggering the gift tax. The How-To of Down Payment Gifting 1. Assess Your Financial Situation: Reflect on what you can afford without affecting your financial health adversely. As Geller advises, always discuss with your child, understand their finances, and know their repayment strategy. 2. Time the Gift Right: Transfer the gift at least two months before your child's mortgage application. This “seasoning” period ensures the funds are seen as part of your child’s legitimate assets. 3. Draft a Gift Letter: This letter, addressed to the lender, confirms the nature of the gift. It should detail the amount, purpose, and assure that repayment isn't expected. Alternative Ways to Assist 1. Direct Home Purchase: Consider buying the home and having your child repay you. But always consult a real estate attorney before embarking on such agreements. 2. Co-signing or Becoming a Co-borrower: These are valid options but come with their own sets of responsibilities and risks. For instance, as a co-signer, you don’t have ownership, but you are liable for payments if your child defaults. 3. Home Search Assistance: Being a pillar of support during their home search can make the process smoother for your child. 4. Renting Options: Letting your child live with you at discounted rates or for free can help them accumulate savings faster. In conclusion, gifting a down payment can be a significant step towards ensuring your child's financial future. You can schedule a meeting with us on our website and we can review your situation and what best makes sense for you. If done right, it can be a win-win situation, paving the way for the next generation's financial success.

As we've seen large storms hit both coasts recently, it's a good idea to use the old Boy Scout motto and "be prepared." We are going to review general steps to take to prepare for something we of course never happens. Natural disasters, from hurricanes to earthquakes, wield a devastating power that leaves homeowners and entire communities grappling with significant property damage and high repair costs. The Financial Impact of Natural Disasters on Homes In 2022, the Insurance Information Institute documented nearly $100 billion in insured losses stemming from natural disasters. Here's a breakdown of the data: Severe storms: These accounted for over $29 billion. Earthquakes: About $14.7 billion per year, as per a joint study between the USGS and FEMA. Floods: 15 instances in 2022 led to $3.3 billion in losses. Wildfires: Resulting in a staggering $8.9 billion from 26 separate events. Hurricanes: Three events led to a total loss of $53.2 billion. Winter storms: Produced $4.1 billion in damages from 13 occurrences. How Can Homeowners Prepare? 1. Reinforce Vulnerable Areas Install wind-resistant doors and storm-proof shutters. Use plywood to board up windows and doors when a storm approaches. 2. Know Your Utilities Identify where water, gas, and electrical lines are and know how to shut them off. 3. Water Diversion Use sandbags around entryways and flood-prone zones. 4. Secure Loose Items Ensure outdoor furniture is tied down. Move grills, tools, toys, and other items inside. 5. Tree Maintenance Trim trees regularly to prevent overhanging branches from causing damage. 6. Furniture Safety In earthquake-prone areas, attach heavy furniture to walls. 7. Landscaping Smartly Choose fire-retardant plants like Rockrose and aloe, and avoid flammable trees like pines. 8. Guard Against Pipe Bursts Wrap vulnerable pipes to protect them during extreme cold. 9. Have an Emergency Plan Assemble an emergency kit with food, water, medications, chargers, and other necessities. Keep both digital and physical copies of important documents, including evacuation routes and insurance policies. What Does Home Insurance Typically Cover? A standard homeowner's insurance policy covers damage due to: Thunderstorms Hurricanes Tornados Wildfires Blizzards However, it's essential to note that standard policies usually exclude flood or earthquake damage. Those living in vulnerable zones should consider supplemental policies to stay covered. In conclusion, while the unpredictable force of nature cannot be avoided, homeowners can adopt a proactive stance. By understanding your insurance policy and taking preventive measures, you can shield yourself from the worst financial aftershocks of natural disasters.