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Home Buying: What is Earnest Money?
Earnest money can sweeten the deal when you are submitting an offer to buy a home. However, many first-time home buyers aren’t familiar with earnest money and how it works. Let us answer some of the most frequently asked earnest money questions for you: What is earnest money? Money that is given in earnest to show the sincerity of your offer to purchase a home, is often referred to as “earnest money.” Sometimes called a “good faith deposit”, potential home buyers give a portion of the down payment to the seller to hold before closing. Earnest money is a very clear way to show that you are a serious buyer and are potentially willing to lose the upfront “deposit” if you don’t fulfill your side of the purchase agreement. Is earnest money expected? No, seller’s don’t expect earnest money. However, they may appreciate the gesture and be more trusting of a potential buyer who offers a good faith deposit. Why do buyers offer earnest money? Offering an up-front deposit on the down payment amount strengthens your offer without increasing the overall purchase price. In a competitive housing market, making a strong offer is important. Seller’s are more likely to accept
Is Now the Best Time for a Cash-Out Home Equity Refinance?
Texas homeowners may have an advantage in the current housing market. The right conditions could make this the best time for many homeowners to consider a cash-out home equity refinance. In the past two years, and counting, we have been through a truly unique time. The financial impact of the pandemic has also been unique. Prices of goods and services have been rising as companies struggle to recover from the impact of labor restrictions, shipping delays, and availability of materials. However, one of the biggest increases we have seen, is a rapid rise in home values. The housing market has been HOT! Most major cities in Texas have more demand for houses, than availability. The effect of this competitive market has resulted in fast paced growth in home values. According to the Texas Real Estate Research Center, the median home value in Texas grew 9.7% year over year in 2020 and a record setting 17.1% in 2021. Looking at this growth in terms of dollars, makes it a bit easier to see the leap… The median home price in the state of Texas in January of 2019 was $220,000. Just two years later, in December of 2021 the median home
15 year vs. 30 year Mortgage
The differences between a 15 year and 30 year mortgage can be important to homeowners and potential home buyers. There are advantages to consider in choosing the mortgage options that best fit your needs. Although fixed rate mortgages are structured the same, adjusting the loan term to 15 or 30 years makes a difference. The loan repayment term on a mortgage can impact the interest rate and payment amount. A 15 year fixed rate mortgage often comes with a lower interest rate and a lower total amount of interest paid over the loam term. However, a 30 year fixed rate mortgage term has a lower monthly payment and gives homeowners more flexibility in their monthly budget. The choice between a 15 year vs. 30 year fixed rate mortgage deserves a deeper look at the details. Let’s compare the 15 year vs. 30 year mortgage terms to help you decide which is best for your financial goals: The Advantages 15 year Mortgage Term Faster Mortgage Payoff Term – A 15 year mortgage, structures your mortgage payments to a 15 year time frame. A quicker pay-off term also means higher monthly payments to pay back the balance on the mortgage. Lower Interest
Become a Homeowner in 2022
How to become a homeowner in 2022 Setting a goal to become a homeowner in 2022 is both exciting and challenging. There are a few things that make 2022 a unique time to buy a home in Texas. We look forward to helping many home buyers purchase their first home this year. In the past two years we have seen home prices rise across the state of Texas. In 2022 the housing market is likely to remain competitive for home buyers. There are more potential buyers in many areas with job growth, than homes are available to purchase. This is article a great place to begin planning your steps for buying a home in 2022. From understanding the impact of your credit history, your down payment options, mortgage pre approval, and staying competitive in the 2022 housing market, we are here to help. Here are the big “must do’s” you should have on your list to become a homeowner in 2022: Getting Your Credit “Mortgage Ready” Credit Scores To qualify for a conventional mortgage loan your FICO credit score should be a 620 or above. At a 740 FICO score or above your opportunity to get the best available interest
Custom Down Payment Savings Plan
Developing a custom down payment savings plan can be a great first step toward becoming a future homeowner. Understanding both what you need to save and setting the time you can give yourself is key to making a savings plan that is just right for you. There are a few upfront costs to buying a home, and making the down payment is usually the biggest hurdle for most first time home buyers. The good news is that you can plan for a traditional 20% down payment or consider a lower down payment mortgage option. Taking a look at your monthly income, potential down payment, target purchase price, and other financial factors will help you set a savings goal. Create your custom down payment saving plan with these things in mind: Mortgage Options Let’s begin a custom savings plan by narrowing the target. If you know how much a potential down payment could be, then you will know how much you should have in savings. A traditional down payment on a home is 20%, but with today’s home values rising higher and higher a 20% savings goal may be a quickly moving target. Waiting longer to save 20% may have an
Mortgage Payment Calculator
Using a mortgage payment calculator is a great place to begin if you are thinking about buying a home or refinancing your current mortgage. An online mortgage calculator can be a great tool to estimate your potential monthly mortgage payment. Adjusting the numbers in each field can help you take a look at the numbers that factor into your mortgage payment. We have mortgage calculators that are perfect for buying a home, refinancing your current mortgage, or taking a look at cash out refinance options. Find the right mortgage payment calculator for your goals here: Home Purchase Loan: Mortgage Payment Calculator Estimate how your potential down payment, home purchase price, taxes, and insurance can impact your monthly mortgage payment amount. This calculation may help you better understand how much home you can afford. Refinance: Mortgage Payment Calculator Utilize this calculator to estimate the potential savings of your refinance. Compare your current mortgage payment to the calculations provided by changing the variables of this calculator. See what your new payment could look like by refinancing to a different loan term, qualifying for a lower interest rate, or by dropping MIP or PMI. Cash Out or Home Equity: Mortgage Payment Calculator Take
Holiday Budget Planner
Holiday Budget Planner The most common reason that people over spend during the holidays, is that they don’t even think about how much they are spending. Putting a holiday budget in writing is an excellent way to organize your thoughts. This planning guide could be the best way create a financial plan for this holiday season. Why should I have a holiday budget plan? The holidays can be thrilling and it’s easy to get wrapped up in buying gifts and goodies. If you don’t keep an eye on your budget, it can be very easy for you to spend more than you should! We all know that over extending your credit is not a good financial decision. Overspending on holiday shopping can actually have a long-term impact on your finances. We discussed how holiday shopping can impact your credit in another helpful blog article. What should be included in my budget? Holiday spending is not a part of your usual monthly budget. It’s a good idea to consider all of the expenses that the holiday season can bring. Your holiday budget should include gifts, decorations, entertaining, and travel. Compare the extra expenses of the holidays to your monthly budget and
How to Drop Mortgage Insurance
Do you know that you can drop mortgage insurance from your home loan? We don’t think you should be paying more for your mortgage than you have to. That’s why it’s a good idea to keep an eye on the mortgage insurance that could be structured into your loan. Dropping your mortgage insurance can save you a few thousand dollars a year on your mortgage payment. The current average premium for mortgage insurance is $215 each month. That could mean saving over $2,500 each year on your mortgage if you drop the mortgage insurance from your loan. When you buy a home there are a number of factors to consider. Mortgage Insurance plays a role in whether you should choose a low down payment mortgage option or a traditional 20% down payment. This is why it is important to know how to drop mortgage insurance from your mortgage after a few years of home ownership. In this article we answer a few important questions about mortgage insurance and how you can save money by dropping it: What does mortgage insurance cover? Mortgage insurance protects the bank that services your mortgage in the event that you make late payments or default
