North Texas Real Estate Talk

If you’ve been on the fence about purchasing a home, now may be the time to act. Effective April 1, 2012, FHA will raise their Upfront Mortgage Insurance Premiums (UFMIP). The fees will increase from 1.0% to 1.75%, which is a significant increase. Example: if you purchase a $200,000 home, your UFMIP today would be $2000, but after the first of the month it will be $3500. They will also raise the monthly fee a tenth of a point; while this is not a major increase it is one applied monthly.

What is mortgage insurance? Mortgage insurance is a financial guaranty for the lender that will help reduce or eliminate a loss in case of default by borrower. It is required when a borrower does not put down at least 20% on the home they are purchasing.

Therefore, if you are serious about buying a home, then I believe we should focus our attention to your search now, rather than later, in order to save you thousands of dollars. You do not have to close on your home by the April 1, but we are required to have your loan in process by that date and then close within a reasonable amount of time.

If you’d like more information about this increase, or if you’re ready to find your home, just let me know. I’m here to help! And as always, if you know someone who would benefit from my services, please have them contact me.

Lenders have been cautious with home mortgage loans of late – right up to the closing date.

Many homebuyers mistakenly believe that being approved for a home loan means the deal is done. But that’s not the case. Now, more than ever, it’s important to toe the line after being approved for a mortgage, at least until you close the deal.

Even buyers with good credit scores and substantial savings may find themselves being denied a loan if they make one of these mistakes before closing:

Avoid making major purchases. Lenders have been known to deny a previously approved applicant (at the closing table) if they purchase a new car, furniture, appliances or other major purchases before signing on the dotted line. These purchases suggest more debt for the buyer, and more risk for the lender. Avoid the big-ticket items until you’ve closed and funded the deal.

Don’t make career changes. Your job stability and salary are major factors when being approved for a home purchase. Any career move you make, even for a higher paying job, could potentially jeopardize your loan status. Worst-case scenario, you could be denied the loan completely. Otherwise, they could choose to delay the closing until you’ve demonstrated stability and financial ability to repay the loan. This is especially true if you changed professions or industries entirely.

Be prepared for last-minute credit check. In June 2010, new rules initiated by Fannie Mae’s loan quality initiative prompts banks and lenders to run a second credit check before closing. So, if you missed credit card payments or were late on a mortgage since the initial credit check and approval, then you could putting your purchase in jeopardy. It is recommended by many lenders not to do anything that could affect your credit score. This includes opening or closing credit accounts, paying late or anything that could trigger a credit inquiry.

Understand closing costs. When you begin your loan process, be sure to inquire about estimated closing costs, or the costs associated with the purchase. Depending on the type of loan, (FHA, Conventional, VA), your closing costs could range from 2% – 6% of the purchase price. Your loan officer will be able to answer questions and provide estimates to help insure you have the funds necessary to close. And if you have a real estate professional working for you, then you can even discuss the possibility of having the sellers assist with some of your closing expenses before you put an offer on the home.

Good luck with your home purchase!

If you’re like most people, you’ve often considered purchasing a home, or homes, for investment reasons. After all, real estate is still the best long-term investment choice available. Well, with interest rates being at historical lows, now may be the perfect time for you to start or expand your portfolio.

Before we go any further, let’s set the stage for the type of investments I’m referring to in this post – primarily residential. Investment properties are usually not occupied by the owner and are geared towards profit by means of renting or leasing the property. They are usually held for long-term profit generation and capital appreciation. These properties can include manufactured homes, condos, homes and even multi-family units.

As with any investment, it’s wise to do research or hire a real estate professional to assist you. You will want to have a clear understanding of the surrounding area, the rental market demand, nearby employment districts, etc. Properties situated in central business districts or near high-level employment areas are often key locations.

Another thing to consider is the proximity of universities with high student population. Something to consider when looking into these education locations, is the cost of tuition, as it is often a key indicator. Affluent families are likely to consider renting a place near campus for their children, as opposed to dorms.

Don’t forget to consider the location in relation to popular districts like shopping, dining & entertainment, as well as public transportation. You probably won’t find many properties with access to all of these things, but they should be taken into consideration.

With the help of a qualified professional, you could be well on your way to building a successful investment portfolio. You might be surprised at just how possible it is. If you’d like more information, be sure to contact me and we can discuss your long-term goals.

A Texas state law that went into effect September 1, 2011 has changed proof of residency requirements for homeowners who apply for the property tax homestead exemption.

In 2012, all new applicants in Texas must provide the following documentation to qualify for the new homestead exemption:

• Application for Residential Homestead Exemption (available on most county appraisal district websites). Here is a list of Dallas/Fort Worth area counties contact information.
• Copy of Texas Driver’s License or Texas ID Card. The address must match the homestead address intended for the exemption.
• Copy of vehicle registration receipt. The address must match the homestead address intended for the exemption. Homeowners can get a copy of their registration receipt from the Department of Motor Vehicles. If you do not own a vehicle, you must complete the Non-Ownership of Motor Vehicle Affidavit (found on the Homestead Exemption application), have it notarized and attach a copy of a utility bill showing the homestead address.
• The Homestead Exemption will NOT be allowed unless all the required documents show the same homestead address.

Although the list seems daunting, the requirements are quite simple. Remember: Filing your Homestead Exemption is FREE (discard any offers from companies that charge for the service), but the deadline for filing your application is April 30th.

In today’s economy, it may not be an easy choice to make improvements to your home. From basic necessities like a new roof to luxury enhancements such as an upgraded kitchen, deciding how much money to spend in a tightened economy can be a difficult decision for many homeowners to make.

Luckily, there are some federal government grants for home improvements available if you meet certain criteria. And for those that don’t qualify, you might be able to deduct home improvements from income taxes.

Federal Government Grants for Home Improvements

Below are some of the most popular federal government grants for home improvements and who may qualify:

Rehabilitation and Repair Loan - Also known as the Section 203(k) program, this loan is the Department of Housing and Urban Development’s main program providing assistance for repairing and rehabilitating single family properties. To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year.

Property Improvement Loan - Also known as Title 1, this program insures loans to finance the light or moderate rehabilitation of properties as well as the construction of nonresidential buildings on the property. This program may be used to insure such loans for up to 20 years on either single- or multifamily properties. The maximum loan amount is $25,000 and only lenders approved by HUD can qualify.

Rural Area Loans - The Department of Housing and Urban Development offers a number of single family housing programs to low- and moderate-income rural Americans through various loan, grant, and loan guarantee programs. Certain income and credit restrictions apply and should be verified with HUD.

Native American Loans - The Section 184 Indian Home Loan Guarantee Program is a home mortgage specifically designed for American Indian and Alaska Native families, Alaska Villages, Tribes, or Tribally Designated Housing Entities. Section 184 loans can be used for new construction, rehabilitation, the purchase of an existing home, or a home refinance.

HOME Program - The HOME program provides grants to communities in partnership with local nonprofit groups to fund a wide range of activities that build, buy, and/or rehabilitate affordable housing for low-income people.

Community Development Block Grant - This program provides homeowners with resources to address a wide range of development needs, benefiting low and moderate income households through the elimination of slums and addressing urgent community needs.

For those that don’t qualify for any of the above grants, you can also check out the U.S. Department of Housing and Urban Development (HUD) website for additional home improvement programs. New programs are updated and added on the government website on a routine basis. If you’re planning to deduct home improvements from income taxes, the IRS website is a great resource to see which improvements might qualify for a deduction. Generally, you can deduct expenses such as construction loan interest and sales tax on building materials. If you operate a home-based business or use part of the home as a rental, you can even deduct a percentage of all home improvement costs on your tax return.

Between all the government grants and tax return deductions available, you can be well on your way to enjoying an updated and improved living space that won’t put a strain on your bank account.

Always consult a tax attorney, financial expert or CPA for financial advice.