Frisco Texas Mortgages, Real Estate, Events, and more

If you wait a few more days or weeks to purchase a home, you could lose thousands of extra dollars. Why? Because the Housing and Urban Development (HUD) is implementing several changes for loans guaranteed by the Federal Housing Authority (FHA).

These changes are coming shortly before the April 30th First Time Home Buyer Tax Credit deadline, and just after the March 31st experation of the Federal Reserve Board's mortgage backed securities purchase (which has kept home loan rates artificially low for over a year now), these FHA changes make it even more important to act now to save BIG!

In case you have not heard about these changes, here is a quick explanation:

• March 30, 2010 - Federal Reserve Board is no longer purchasing Mortgage Backed Securities (MBS) which has been keeping mortgage rates at historic lows.
• April 5, 2010 - HUD is implementing new requirements for Up-Front Mortgage Insurance (UFMI). Currently, the amount of UFMI is 1.75% and is increasing to 2.25%. What does this mean? For a borrower purchasing a home for $200,000 with a $7,000 down payment, the UFMI will increase by $965. Typically, this amount is financed into the loan, so the mortgage payment increase will be minimal, but overall the fee is increasing for the buyer.
• Later this Sping - HUD will implement the reduction fees allowed to be paid by a seller. Currently, the seller can pay up to 6% of the buyers closing costs. This percent is decreasing to 3% maximum. Using the same example above, a home buyer purchasing a $200,000 home will lose on "seller concessions" by $6,000.

How do you avoid this loss? GET OFF THE FENCE! Submit your FHA Mortgage Application by the last week of March.

How do you see today's Real Estate Market? More like a 'Stop Sign' or a 'Speed Bump'?

First it started with Home Appreciation and how it has slowed down. In some states, appreciation took a hard hit. Luckily in Texas, we were not hit as hard with rapid appreciation or depreciation values.  Then we heard all of the hype about mortgage interest rates going up, then down, then up, etc.

Is this any time to buy a home? OF COURSE, if you're buying for a place to live, not as a property to flip for fast profit.

Over a year ago, it wasn't uncommon to have 15 offers for a property. And it wasn't uncommon for people to waive their contingencies, which lets you off the hook if the home inspection turns up something you don't like or your financing falls through. In today's soft market, such desperate sacrafices aren't required.

What some people think is a stop sign is really just a speed bump. A normal Real Estate market books our speculators, people who flip properties for quick profit. Now people are buying for the right reasons. Sellers no longer hold all the cards and this helps balance out the market.

There are several benefits of home buying in a Cooling Marketing:

More Selection - Inventory has inflated to record high levels, giving a huge selection to choose from. In the past, you were forced to outbid other buyers on homes the moment it appeared on the Multiple Listing Service (MLS). Now you can tkame more time finding your next dream home.

Negotiating Power - The market slowing down helps your negotiating power for many homes. Keep in mind that there are still quite a few 'steals' out there and your offer is not necessarily the 'best' offer. So, although you have the power to negotiate, sellers are still waiting for a 'reasonable' offer. Talk with your Real Estate agent before determining what is a 'reasonable' offer in that particular area.

Interest Rates - It is easy to get caught up in rising rates. Some people act like "Chicken Little" and scream about the sky falling when rates inch up a quarter of a point. Rates are still way below wher they were 5 years ago. Work with a Reliable Mortgage Consultant to ensure you know the options available to you.

A home is a great investment, especially if you plan to live in it long term. The national median home price has risen each year since 1968 which is when record keeping began. When you consider the volatility of the stock market, the benefits of owning real estate still outweigh it and you get the tax benefit.

Do you still see the Real Estate Market as a Stop Sign or do you now see it as a Speed Bump?

If you want to know what your home is worth, or you're exploring the possibilities of home ownership and you would like to discuss adding real estate to your investment portfolio, feel free to contact me.

How Much Money Do You Need to Buy a Home in Texas?  First and foremost, you should not just focus on the down payment, although that's not a bad place to start. When you contact a Mortgage Consultant, they will typically walk you through a few scenarios and help you determine which type of loan is best for your financial situation.

When buying a home, you need to consider the following cash factors:

• Down payment - min. 3.5% FHA or min 5% Conventional of the purchase price
• Earnest money -usually requested by the seller, but overall will be deducted as part of the transaction
• Hazard Insurance - typically, insurance companies require the first year to be paid upfront
• Closing Costs & Pre-paid Expenses - Displayed on the Good Faith Estimate which is provided by a Mortgage Consultant.
  • Lender Costs
  • Title Costs
  • Pre-paid items - 2 to 3 months worth of hazard insurance/tax reserves
  • Mortgage Insurance Premium - Can be financed into the loan
  • Can negotiate with the seller to pay for some/all of the closing costs (speak with your Real Estate Agent)
• Reserves - 2 to 3 months worth of cash reserves, after all costs above are paid. 

As you can see, there are many factors to consider when buying a home in Texas. The exact amount needed to close can fluctuate depending on the loan amount, property taxes, and hazard insurance plan. For an accurate breakdown of what fees to expect, contact your local Mortgage Consultant.

These items should be determined before you make an offer on a home. Part of your offer will include the request for the seller to pay for some of the closing costs. Without knowing the closing costs, it makes it harder to request the exact amount (although it can be done).

Have you hired a Real Estate Agent?  Watch for my upcoming post which will help you narrow down your search for a Real Estate Agent in your area. If you are in the market and need a few suggestions, feel free to contact me directly as I can assist you with finding a Real Estate Agent anywhere in the state of Texas.

Even though each home and each home buyer is unique, the same mistakes are made over and over again when making a purchase.  I have put together a quick report which outlines 7 common mistakes made during home buying and how to avoid them.

Buying a home is one of the most exciting events in a person's life, whether it's the first home or the fifth one; however, it can also be one of the most stressful.  Purchasing a home should be regret-free and anxiety-free.

Learning to avoid these 7 most common mistakes when buying a home can help lower your stress and help you focus more easily on possibly the single largest purchase of your lifetime.

1. Not Being Prepared : When you consider the scope of the purchase, it's surprising how many people haven't done sufficient research.  Research your buying power - it's easy to get a cursory idea of what you can afford through some of the Realtor websites.  Many have calculators that allow you to input your salary and debt.  Although that can be helpful to get a quick calculation, there are many factors those calculators do not consider.  The best option is to sit down with a professional before you go house-hunting.  You can find out exactly what you can afford in less than an hour with a qualified mortgage consultant - like myself.  When it comes to making an offer on a home, sellers are far more interested in offers that come from pre-qualified buyers.  They know that the sale will in all likelihood go through and that there won't be any unforeseen problems at the last minute.  I offer clients a loan qualification letter to present to sellers to verify their ability to close a loan.
2. Thinking Too Long Term : There is danger in buying a home that's not right for you because you are planning too far in advance.  Your life can change pretty dramatically in the space of a few short years.  You may experience a change in health, family, or financial status for example.  While you can't plan for everything, you do need to consider that you may have to sell the home unexpectedly in the not-so distant future, and the house must have some resale value.
3. Waiting Too Long : It's a big decision and only a foolish person would enter into it lightly.  But it's just as easy to let caution get the better of you.  The real estate market isn't fixed, it can change dramatically.  Some markets are very tight, with few homes available - a tight market probably won't get better in the next year.  The National Association of Realtors estimates that the appreciation rate in most markets will be at least 4 to 6 percent.  Looking at everything before making a decision, it's tempting to think that the grass is always greener somewhere else, but you have find that the first home is the best home for you.  If you wait, that home may not be available later.  Don't rush into a decision, but if a house feels right, contact a local Real Estate Agent to help you make an appropriate offer.  Don't have an agent?  I'd be happy to refer a few professional and knowledgeable Realtors in your area of choice.
4. Focusing on a Single Feature : If you develop microscopic vision when looking at a house, it's possible to overlook far greater potential problems.  Interior Decorating - Don't get caught up in decorating features.  These are all easy features to change.  However, the layout and floor plan of the home isn't easy to change.  Exterior - It's important to have a home with nice curb appeal, but again, you can change that later.  it's far easier to change landscaping than it is to rip out walls or add-on to a home to try and make it livable.  Price - Don't focus completely on the price.  Most buyers go out with an idea that they will only spend a fixed amount.  A budgeted amount is often the first criteria when it comes time to evaluating homes.
5. Overlooking New Construction : Many buyers focus on existing homes, and don't consider newly constructed homes.  It's hard to see the final vision of a planned home community, especially when touring through a development that is merely empty lots and partially built homes.  However, these homes have great appreciation value, especially when you get in during the initial phases of the development, before the model homes have been built and the developer has invested a lot of money in marketing the community.
6. Working Without an Agent : Many people start looking at homes by driving by a home for sale and getting the number off the sign, visiting an open house, or looking online.  While that's a great way to get a feel for the market, it's also easy to make a commitment to buying a home that doesn't necessarily reflect your best interest.  Working with a real estate agent can actually save you time and money.
7. Rushing the Process : Let's say you found your dream home and put in an offer.  What happens next?  If your sale follows most standard sales, the home is inspected and appraised, the information is shared with the buyer (via the agent) and the mortgage company.  The mortgage company processes the loan agreement, the buyer and seller sign-off and the home is yours.  However, in highly competitive markets, some buyers waive the home inspection so that the loan can go through more quickly.  So what's the problem?  If there are defects that the home buyers discover later, they have no recourse - the house is theirs, warts and all.  In a nutshell, be patient.  It's at this stage, when people try to rush the process, that some of the biggest and most costly mistakes can take place.

Plan Your Needs!

It's important to plan carefully for some future events and how they may affect your home buying.  Plan to stay in each home for at least two years, because when you sell you want to make at least your purchase price, plus any closing costs.  If the house hasn't appreciated by 6 to 8 percent (typical percentage costs associated with closing), you can lose money.

How Much Can You Afford?

Answering these questions can help you find out how much house you can afford.  Meet with me and you'll also find out if you are eligible for any special mortgage packages or interest options.

• Do you receive any yearly bonus?
• What debts do you have outstanding?
• How much of your annual earnings is overtime?
• Can you pay-off any debts before buying a home?
• Do you have any expenses that will deplete your savings?
• Do you have cash for down-payment and closing costs?
• How much is your annual salary?
• How much do you spend?
• Do you have any "gift" money?

Are you are looking to buy or sell a home in Frisco or another city in North Texas?  If so, then I can help.  I am a licensed Mortgage Consultant located in North Texas with over 15 years experience in the industry.  I can help you get pre-approved for your new home loan in Texas and even suggest some very knowledgeable and professional Real Estate Agents in your area of choice.  If you are available to talk, then I am available to listen.  Give me a call any time or visit my website for more details.

John Cannata    p# 214.545.5604  

www.JohnCannata.com or www.TxMortgageConsultant.com