Register Real Estate Advisors

Did you know there is special financing available when purchasing a home in a rural area?  Also, when using a USDA Loan you may qualify for a 0 downpayment!  The USDA Home Purchase Program requires no mortgage insurance, competitive fixed rate mortgages, and the seller can pay seller concessions at closing.  This program can only be used on a primary residence.  The loan is restricted by geographic location, but you will be surprised how many areas are considered in the program.  For more information on how you can take advantage of this special program, contact RREA at 281.288.3500.  We want to help you purchase your next home!

There are mortgage programs that are aimed specifically for foreign nationals moving to the United States.  If you are a foreign national moving to the United States to live in the Houston area, contact RREA’s in house lender to get qualified for a loan specialized to your needs.  Properties that are eligible for foreign national loans are both single family homes and condominiums.  These loans do require at least 25% down payment.  Call RREA today at 281.288.3500 to talk with our in house lender about qualifying and to our Realtors who can help you purchase a home.  Realtors work differently in Texas than in other parts of the world, so talk with a Realtor before you purchase a new or resale home in the states.

When you are purchasing a property, whether a townhouse or single family home, you need a Realtor that specializes in that area. You will want your Realtor to evaluate the community where you are considering your purchase. If you’re looking to buy a property for investment purposes, you will want to know the rental rates in the area and how long it takes to find tenants. If you are purchasing a home for your family, be sure you know the statistics of the neighborhood. For example, the foreclosure rates and owner occupancy rates will be important. These factors can impact your loan options.

The Spring is when most sellers want to put their houses on the market and most buyers want to start looking for a home.  However, April is also Tax Season.  Tax Transcripts are important for lenders representing buyers.  If you are buying a home and have not filed your taxes, your closing could be significantly delayed.  If you are a seller, be sure to ask your agent to ask the buyer’s lender if the buyers have filed their taxes so that you won’t have to worry about it close to the closing date.  The reason this has become such a big issue for buyers is due to the amount of fraud from buyers who provided false tax returns showing they qualified for the loan, but they had turned in a different return to the IRS.  So now all returns have to be verified and we see a lot of closings held up due this issue, or the buyer finds their dream home and cannot make an offer until their tax returns are filed.  So I recommend that buyers take care of all tax filing issues before they get pre-approved to purchase a home in the Spring.

Here are some general guidelines, but check with your particular lender to see if you need to file your tax returns before you close on your home purchase.

1. If the borrower is a W-2 employee & has no self employment or commission income then most lenders won’t require the tax return for 2011 until after April 15^th  when it is due.
2. If the borrower is earning commission or is self employed, & their income for 2009 & 2010 is sufficient, most lenders will just require a profit loss statement for 2011 showing they are in line with previous years in addition to tax returns for 2009 and 2010.
3.  If the borrower is commission based or self employed  & the lender needs 2011 income to justify their earnings, then a lot of lenders will need the tax return for 2011 and the Tax Transcript pulled directly form the IRS.
4. It can take the IRS about 4-6 weeks to make the transcripts available after the return is filed (longer if it is mailed in rather then sent electronically). And if the borrower OWES taxes, they actually put those returns aside and they take longer to get transcripts back to the lenders.  This is what can drag out your closing!
5. If the tax return shows the borrower owes taxes, then most lenders have to show the taxes as paid or show a payment agreement with the IRS that will be include in the debt ratios

In today’s market there are a lot of short sales and foreclosures.  If you are one of the unlucky home owners that had to go through this process then you will have a waiting period before you can get qualified for another home loan.  Depending on the type of loan you want or need for purchasing your next home, you will have different requirements.  If you had to file a Chapter 7 or Chapter 13 there are also requirements before you can get a home loan.  Please see below:

Conventional Loans Require:

• Chapter 7 BK – 4 year waiting period from the discharge/dismissal date
• Chapter 13 BK – 2 year waiting period from the discharge date or 4 years from the dismissal date
• Multiple Bankruptcies – If there are multiple bankruptcies within a 7 year period, the waiting period is 5 years from the most recent discharge/dismissal date
• Foreclosure – 7 year waiting period from the completion date
• Deed-in-Lieu/Pre-Foreclosure Sale (Short Sale) – Minimum 2 year waiting period

FHA/VA Loans Require:

• Chapter 7 BK – 2 year waiting period from the discharge/dismissal date
• Chapter 13 BK – 1 year of the payout must have elapsed and the borrower’s performance must have been paid as agreed.  Document that the borrower’s current situation is not likely to recur.  The court must grant permission to the borrower to enter into a mortgage transaction.
• Foreclosure/Pre-Foreclosure/Short Sale – 3 year waiting period
• VA Loans ONLY – 2 year waiting period for Foreclosures

In today’s real estate market, there are many different mortgages available for you to choose from. If you are thinking about purchasing a home, you can call RREA’s in house lender today to see what type of loan products you qualify for. Our in house lender, Terry Traylor, can help you determine your mortgage limit, interest rate, and what product will best meet your home purchasing needs.

There are a variety of mortgage loans available. There are Jumbos for loans over $417K. There are loans for investors that allow homes to be flipped before the 90 day limit. For first time home buyers, there are Down Payment Assistance Loans that help with closing costs. For Foreign Nationals that are non-U.S. Citizens there are loans that allow them to purchase second homes in the U.S. With the 203K Loan people can make improvements before or after closing. The HomePath Program was designed for Foreclosed Fannie Mae owned properties. The REO Extended Lock Program helps homeowners purchase a short sale or REO property by allowing an extended interest rate lock. The credit 580 Program increases the FHA guidelines to include borrowers with credit scores between 580-639. Dissipating Asset Programs provide asset-rich clients the ability to qualify with no income up to a maximum loan amount of $5 Million while the Pledged Asset Mortgage allows borrowers to pledge eligible assets in lieu of a down payment, second mortgage or a home equity loan to cover normal down payment requirements. And you thought there were only FHA, Conventional, and VA Loans! Today’s lender has lots of options for you to take advantage of. Call today to find out more -281-288-3500.

If you need to purchase a home for your aging parents because they cannot qualify for a mortgage on thier own, there are mortgage programs that can help you. The property would be classified as a primary residence for your mother and father. It can be an investment property for you at the same time. Your parents must have insufficient income to qualify for the mortgage on their own and you must be their primary source of loan qualifications. Technically, you will own the property, but your parents will also be on the title. There are no distance requirements for the location of your parents residence, so they can be cities apart from your primary residence. To learn more about this or any other mortgages available, please call RREA’s in house lender, Terry Traylor at 281.288.3500. He can help you get pre-approved for your next real estate purcahse.

Bond 77 and the Texas Housing Trust Fund (THTF) might help you get an even lower interest rate if you are a first time home buyer in today’s market. However, you do not have to be a first time home owner if you are a Veteran. First time home buyer’s may qualify for a special interest rate when they combine these two Texas Homebuyer’s Assistance Programs. The THTF is a zero percent interest loan (as a second lien) paid over 5-10 years. The first payment can be deferred up to 5 years from closing if needed. It is available on a first come, first served basis. There are restrictions on income and purchase price. With these programs, you may be able to get up to $10K for down payment and/or closing cost assistance when purchasing a residential home. For more information about the Texas Housing Trust Fund Homebuyer’s Assistance Program, please call RREA today at 281.288.3500 to talk with our in house lender, Terry Traylor.

Sometimes when I get to the closing table clients will tell me, “It’s About Time.”  Especially first time home buyers who are anxious to get into their new homes, but they have to wait on their lenders and the title company to have everything ready for closing.  Then there are those cash buyers that think we should be able to close a home purchase in just three days!

In today’s real estate market it takes a minimum of seven days to close on a home purchase.  That is because a recent Real Estate Settlement Procedure Act disclosed rules stating that lenders cannot close a loan until seven days after they have provided the borrower with the original required RESPA disclosures and application (including the Good Faith Estimate and Truth-In-Lending Disclosure).  This is a consumer-protection measure designed to help ensure that a buyer has enough time to read and understand a loan before the closing.

If there are any last minute changes to the loan amount, purchase price, or seller contributions that will add three extra days to the closing.  RESPA now requires lenders to again provide the Truth-in-Lending Disclosure when the annual percentage rate changes 0.125% or more from the original disclosure of the APR on the Truth-in-Lending Disclosure—every single time.  Some lenders interpret this to mean that a re-disclosure is required only when the APR increases, while others require a re-disclosure when the APR changes 0.125% regardless of the direction of the change.  This is a protection that was put in place to prevent lenders from changing the loan note rate or fees on borrowers at closing without proper disclosure to the borrower.

Something else that slows down closings is when the buyer has not filed their tax returns.  All Self-employed borrowers must provide tax returns to their lender.  Consumers want to know why closings are being pushed back or why they fall through completely.  If you are the seller, you are really angered when the sale falls through and you have to put your house back on the market when you were already preparing to move out.  Below is an example to explain one of the many things that can go wrong…

A couple wants to buy a home.  The wife is a W2 employee and qualifies for the loan on the home.  The husband is self employed.  Under new lender rules, the lender has to request the tax returns for the past two years for the self employed spouse and could even require the financials for his company.  The lender has to then consider his business losses a liability, which affects the amount for which they can qualify.  See where I am going with this?  It is common for self employed people – especially those operating an LLC, LLP, or Subchapter S corp – to run their businesses at a loss.  Sometimes this is the difference between pre-qualified and pre-approved.

All of these new lending regulations can slow down or derail real estate transactions, so understanding the requirements will help you to be better prepared for your mortgage process so that you can close on time.  If you would like to pre-qualify for a mortgage, please contact RREA’s in-house lender at 281.288.3500 to get started on your path to home ownership.  We have Realtors that can provide you with a smooth transaction – from house hunting to the closing table.  Call us for more information.