Jenny's Guide to Home Loans

Dallas Morning News articles: DFW Rents see record rise in 2011 / Home Mortgage Outlook for 2012

2012-01-07T18:08:00.001-06:00

Couple great articles to share with your "on the fence" clients:

Here are 2 articles in Dallas Morning News Briefing on January 6th 2012:

D-FW rents see record rise in 2011-

North Texas apartment renters paid almost 5 percent more in 2011, the biggest annual increase on record.
At the end of 2011, DFW apartment rents averaged a record $804 a month, the Carrollton-based apartment analyst said Thursday. And most new North Texas rental units start above $1,000.
~DMN

Home mortgage outlook:

Fran Nothaft, chief economist at mortgage giant Freddie Mac, is predicting that residential mortgage rates will be "relatively low during the first half of the year, with rates edging up during the second half."
This week, nationwide rates for 30-year fixed home loans were a record low 3.91 percent.
That means the payment on a $200,000 mortgage is less than $950 (principle and interest) a month. Most new apartments in the Dallas area will run you more than that.
~DMN

Night Before Christmas [Short Film]

2011-12-23T15:48:00.000-06:00

Two eager children wake the night before Christmas to discover the presents have already arrived.

Mortgage Market Update

2011-12-15T09:14:00.000-06:00

Thursday’s bond market has opened in negative territory following the release of stronger than expected economic data. The stock markets are in positive territory with the Dow up 121 points and the Nasdaq up 18 points. The bond market is currently down 8/32, but due to strength late yesterday, we may not see much of a change in this morning’s mortgage rates. Some lenders may have revised pricing slightly lower yesterday afternoon, but today’s early weakness simply offsets that improvement.

There were three economic reports released this morning. The most important was November's Producer Price Index (PPI) that revealed a 0.3% increase in the overall reading and a 0.1% rise in the core data. This data measures inflationary pressures at the producer level of the economy and is considered to be important to the markets. The rise in the overall reading exceeded expectations of 0.1%, but the more important core reading pegged forecasts. The core data is watched more closely because it excludes food and energy prices that are known to be much more volatile month-to-month. Therefore, the data should be considered neutral-to-slightly negative for bonds and mortgage rates.

The Labor Department also gave us last week’s unemployment figures early this morning. They surprised many with an announcement that the number of new claims filed for unemployment benefits fell to 366,000 last week. This much lower than expected and was the lowest number since May 2008. This is clearly negative news for the bond market and mortgage rates because it points towards a strengthening employment sector. Fortunately though, this is only a weekly snapshot of the sector, or we could have seen a large sell-off in bonds and a spike in mortgage rates. Because this report tracks only a single week’s worth of new claims, its impact on this morning’s trading and mortgage pricing has been somewhat subdued.

The third and final report of the day was November's Industrial Production data at 9:15 AM ET. It gave us a bit of good news by showing a 0.2% decline in output at U.S. factories, mines and utilities last month. This was short of the 0.2% increase that was expected, meaning the manufacturing sector may not have been as strong last month as many had thought. Since that hints at economic weakness, it can be considered good news for the bond market and mortgage rates.

Tomorrow has just one relevant economic report scheduled for release, but it is one of the most important pieces of data the bond market sees each month. November's Consumer Price Index (CPI) will be released at 8:30 AM ET. This is the sister report to today’s PPI, but measures inflationary pressures at the more important consumer level of the economy. Inflation readings are highly relevant to the bond market and long-term securities such as mortgage-related bonds because inflation is their number one nemesis. Rising inflation erodes the value of a bond’s future fixed interest payments, particularly several years down the road. This causes bonds to become less appealing to investors and leads to the securities being sold at a discount to offset the effect inflation has on them. As bond prices fall, their yields move higher. And since mortgage rates tend to follow bond yields, the end result is higher mortgage rates to consumers.

As with today’s PPI, there are two readings to the release. The core data reading is more important to the markets than the overall reading because it gives us a more stable measurement of inflation at the consumer level of the economy. Analysts are expecting to see a 0.1% increase in both readings, meaning inflationary pressures rose slightly last month. That would be considered favorable news for the bond market, but a decline would be better. As long as we don’t get much stronger than forecasted readings, especially in the core data, the bond market should respond positively to the news.

First Time Homebuyer Assistance Program

2011-09-01T11:39:00.000-05:00

Down Payment and Closing Cost Assistance Program for First Time Homebuyers

Begin a lifetime of homeownership through the Texas First Time Homebuyer Program (FTHB). This program allows qualified Texans access to down payment and closing cost assistance. Homebuyers who have not owned a home within the past three years, who meet program income guidelines and who do not exceed the program's purchase price limits are eligible to apply for a loan under the program.

Program Highlights:

$10,000 for down payment and/or closing cost assistance
0% interest loan
5 or 10 year loan term
First payment will be deferred for 5 years from closing date
Payment amount $83.33 OR $166.67 monthly, depending on term
Borrower must be a First Time Homebuyer (excludes qualified Veterans)
First Time Homebuyer counseling required
Minimum credit score 640

Borrower Requirements:

Income: May not exceed 80% area median family income regardless of family size
Liquid Assets: May not exceed $15,000 (excluding retirement and/or 401K accounts)
Home Value Limits: Total contracted purchase price of the single family mortgage limits under Section 203(b) of the National Housing Act
Combined Loan-to-Value: Must not exceed 105%

Eligible Properties:

New and existing single family homes, townhomes, and condominiums

Mortgage Market Update

2011-08-12T15:25:00.001-05:00

Yesterday’s stock rally allowed the Dow to recover 423 points and the Nasdaq 111 points of their recent losses. That, along with a weak 30-year Bond auction, led to further bond market selling during afternoon trading. Many lenders revised pricing higher late yesterday, but the size of the increase varied greatly between lenders. It will be interesting to see how the day goes as we wrap up one of the most memorable and volatile weeks that many can recall. The bond market is showing some strength, bucking the traditional "higher stock prices equal bond selling" trend. I would not be surprised to see more movement during afternoon trading as investors close out positions and protect themselves over the weekend. This may lead to afternoon changes to mortgage rates yet again today.

The Commerce Department reported early this morning that retail level sales rose 0.5% last month, meaning consumers spent more in July than they did on June. By theory, that is negative news for the bond market and mortgage rates, but since it matched forecasts it has not has not had much of an impact on this morning’s trading. If more volatile auto-related transactions are excluded, we saw a larger than expected increase in sales. However, it appears to have had no bearing on today’s rates.

Today’s second report came from the University of Michigan, who said their Index of Consumer Sentiment for August fell to 54.9. This was well below forecasts of 62.5, indicating a significant decline in consumer confidence about their personal financial situation. That is certainly good news for the bond market and mortgage rates because it means that consumers are less apt to make large purchases in the near future, limiting economic growth.

Next week brings us the release of several relevant economic reports, including two key inflation indexes. None of the data is scheduled for release Monday, so we can expect to see the bond market react to stock strength or weakness and any news that comes over the weekend.

Can you qualify for an FHA loan?

2011-08-03T12:17:00.000-05:00

FHA loan programs have become popular again as a reliable option for home buyers since the revival of the mortgage industry the past few years. It is a loan program that offers easier qualification and the least amount of down payment. So what do you need to know about it? Here are a few key guidelines:

Down Payment
Minimum 3.5% of the sales price is required from buyer's fund or gift from family member.

Seller Concession
Seller can pay up to 6% of the sales price for closing cost. This does not have to include owner title policy, survey, and home warranty.

Minimum Credit Score
To qualify with 3.5% down payment, your minimum mid credit score has to be 580 or higher. If buyer has 10% down, then the credit score to qualify will be even lower. (We can qualify most buyers down to 580 with 3.5% down payment versus many major banks who cannot due to their own requirements.)

Assets
Most buyers do not need large amounts of assets showing in their bank or retirement fund. Just enough for the down payment will be sufficient.

Appraisal
All properties must pass HUD standards, but that doesn't mean the house has to be perfect. The major items to look for are roof, structure, and foundation. Minor safety hazard items may have to be addressed too, but often are very workable.

Previous Foreclosure or Bankruptcy on Record
ANY previous foreclosure or bankruptcy history on your credit record has to pass at least 3 years from foreclosure date or bankruptcy discharged date for consideration.

Purchasing a HUD Foreclosure Home
HUD foreclosure homes are simple and easy to finance with an FHA loan. HUD already has an appraisal for the buyer and, if any repairs are needed, HUD will allow escrow repairs. Not many lenders will work with it, but we do.

Time to Close
Buyers with good solid credit history and income can close their loan as fast as 2 weeks (1 week for option period and 1 week for appraisal).

Mortgage Market Update

2011-07-20T14:05:00.000-05:00

Wednesday’s bond market opened in negative territory, despite weaker than expected housing news. The major stock indexes fluctuated in early trading, but the Dow and Nasdaq are both currently showing a loss of approximately 10 points. The bond market is currently down 12/32, but we will still likely see a slight improvement in this morning’s mortgage pricing due to strength in bonds late yesterday.

The National Association of Realtors said late this morning that home resales fell 0.8% last month, indicating further housing sector weakness. Analysts were expecting an increase in sales, making this good news for the bond market and mortgage rates. Unfortunately, it appears that bond traders aren’t too impressed by the data.

Tomorrow has two economic reports scheduled for release, neither of which is considered to be highly important. The first will come at 8:30 AM ET when the Labor Department gives us last week’s unemployment figures. They are expected to announce that 411,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week, making it favorable news for the bond market and mortgage rates. The higher the number of new claims, the better the news for mortgage pricing. However, since this report tracks only a single week’s worth of initial claims, it likely will not heavily influence the markets or mortgage rates unless it shows a sizable drop or spike in new claims.

June's Leading Economic Indicators (LEI) will be posted at 10:00 AM tomorrow morning. This Conference Board index attempts to measure economic activity over the next three to six months. While it is not a factual report, it still is considered to be of moderate importance to the bond market. It is expected to show a 0.3% increase, meaning that we may see a gain in economic activity over the next few months. A smaller rise in the index, or better yet a decline, would be good news for the bond and mortgage markets.

Mortgage Market Update

2011-07-12T15:31:00.000-05:00

Tuesday’s bond market has opened in positive territory again as weakness in overseas markets continues to lead to finds being moved into the safety of bonds. The stock markets are showing weakness, but are much better than yesterday.

May's Goods and Services Trade Balance report was posted this morning, revealing a $50.2 billion trade deficit. This was its highest level since October 2008 and well above forecasts of $44.0 billion. A good portion of the increase is being attributed to higher oil prices in May, but the data can still be considered favorable for the bond market. However, this data is a little aged now and does not carry the importance that many of the other reports we see each month. Therefore, it has had little impact on today’s mortgage pricing.

Later today, we will get to take a peek at the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show any surprises or hints of a move by the Fed anytime soon. Many analysts use these minutes to help them form their own predictions of when the Fed will do something to help boost or contract economic activity. They often show no surprises and accordingly, have little influence on afternoon trading and mortgage rates.

Yesterday afternoon’s earnings release by Dow-component Alcoa showed better than expected results. It is only one of many companies to release earnings in the coming weeks, but if the majority of them also show strong earnings despite the economy slowing, we could see stock prices move higher and bonds prices drop lower. That could lead to higher mortgage rates as the flight-to-safety gains in bonds of the past couple days could be quickly erased again.

There is no relevant economic data scheduled for release tomorrow, but Fed Chairman Bernanke will present his semi-annual update about the economy and monetary policy before Congress. He will speak before the House Financial Services Committee tomorrow and the Senate Banking Committee Thursday, each at 10:00am ET. His testimony will be broadcast and watched very closely. Analysts and traders will be looking for the status of the economy and his expectations of future growth, particularly inflation and unemployment concerns that will lead to changes in key short-term interest rates. This should create a great deal of volatility in the markets during the prepared testimony and the question and answer session that follows. If he indicates that inflation may become a point of concern or anything that hints at rapid economic growth, we can expect to see the bond market fall and mortgage rates rise Wednesday.

We usually see the most movement in the markets and mortgage rates during the first day of this testimony as the Chairman's prepared words for both appearances are quite similar to each other, meaning that the second day of testimony rarely gives us anything we did not hear during the first day. The general exception is something asked or answered during the Q&A portion of the second day's appearance.

Tomorrow also has the first of the two important Treasury auctions when 10-year Notes will be sold. That sale will be followed by a 30-year Bond auction Thursday. These sales can influence market trading in bonds and possibly affect mortgage rates. If the sales are met with a strong demand from investors, particularly tomorrow's sale, we should see afternoon improvements in bonds that could lead to downward revisions to mortgage rates.

JENNY'S TIPS: When to Refinance

2011-06-03T10:19:00.000-05:00

Ever heard the old rule of thumb, you should only refinance if your new interest rate is at least two points lower? That may have been true years ago, but with refinancing dropping in cost, it's not the wrong time to think about a new loan. Refinancing has a number of benefits that often make it worth the up-front expenditure many times over.

When you refinance, you might be able to lower your interest rate and monthly payment -- sometimes significantly. You might also be able to "cash out" some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation -- whatever! With lower rates and balances, you might also be able to build up home equity faster with a shorter-term new mortgage.

All these benefits do cost something, though. When you refinance, you're paying for most of the same things you paid for when you obtained your original mortgage. These might include settlement costs and other fees, an appraisal, lender's title insurance, underwriting fees, and so on.

You might have to pay a penalty if you refinance your previous mortgage too quickly. That depends on the terms of your existing mortgage. These penalties are illegal in some places, and more often than not when you have one of these penalties on your current mortgage it applies only for the first year or two. We'll help you figure it out.

You might pay points to get a more favorable interest rate. If you pay (on average) three percent of the loan amount up front, your savings for the life of the new mortgage can be significant. You should be aware that the IRS has recently said that points paid for the purpose of refinancing your mortgage cannot be deducted in their entirety in the year you pay them, unless the refinanced loan is primarily for home improvements. Consult your tax professional before deducting points you pay on your new mortgage from your federal income taxes.

Speaking of taxes, if you lower your interest rate, naturally you will be lowering the amount of mortgage interest payments you can deduct from your federal income taxes. This is another cost that some borrowers consider. We can help you do the math!

Ultimately, for most people the amount of up-front costs to refinance are made up very quickly in monthly savings. We'll work with you to determine what program is best for you, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your taxes.

Kids talk about mortgages and what they want in a home [video]

2011-05-24T12:03:00.000-05:00

Produced for jennyloans.com by Caffeine-Free Films
Song: Bach's Minuet - Notebook for Anna Magdalena by Aaron Dunn

DEAR JENNY: Can I use funds from my 401(K) as a down payment?

2011-05-20T10:51:00.001-05:00

You've finally found the home of your dreams. There's just one thing standing between you and your new house: the down payment.

Hardship withdrawals

Many home buyers today opt to use funds from their employer’s 401(K) program to come up with the down payment on a house. Ordinarily, you can't take money from your 401(K) plan unless you retire, leave the company or become disabled, but many company plans permit certain “hardship withdrawals” when there is an immediate and heavy financial need, including the purchase of the employee's principal residence.

The drawback to a hardship withdrawal is that you will pay taxes and penalties on the amount withdrawn from your plan, which often must be paid in the year of withdrawal. And while hardship withdrawals are allowed by law, your employer is not required to provide them in your plan. Check with your employer’s human resources department if you're not sure if your 401(K) plan allows hardship withdrawal.

Borrow against your 401(K)

Another approach may be to borrow against your 401(K) – often as much as 50 percent of your account balance. You pay interest on the loan, but the interest goes back into your account. The money you receive is not taxable as long it is paid back and plans can give you anywhere from five to 30 years to pay back your loan.

There are risks involved in borrowing from your 401(K). If you lose your job or leave your employer, you must pay back the loan in full within a short period, sometimes as little as 60 days. If the money is not paid back in that time, it is considered a withdrawal from your plan and subjected to the same taxes and penalties. And while 401(K) accounts can usually be rolled over into a new employer’s 401(K) without penalties, loans from a 401(K) cannot be rolled over.

In addition, because the funds withdrawn from your account are no longer earning compound interest, your account will be smaller when you retire. And you’ll be replacing pretax money with after-tax money.

Some lenders will count the money you borrowed from your 401(K) as an additional debt that will go along with your car payments, student loans and credit cards. While it may seem unfair since you are borrowing your own money, most lenders view it as a payment obligation that affects your debt-to-income ratio in qualifying for a home loan. It may be a factor in whether you decide to make a hardship withdrawal from your 401(K) and pay tax penalties or borrow against it.

Consult your financial advisor before making any decisions regarding your 401(K).

JENNY'S TIPS: How much can you afford?

2011-05-13T13:43:00.000-05:00

Deciding how much house you can afford is a personal decision. Many factors come into play. How much can I borrow? How much can I put toward my down payment? What size monthly payment can I afford?

There are no black and white answers to these questions. It's a matter of give and take. If you plan on a 30 year mortgage, you can probably make a lower down payment and still manage the monthly payments. If, on the other hand, you plan on a 15 year mortgage, you'll probably want to make a larger down payment to keep your monthly payments in line with what you can afford.

How large a down payment can I make?

Many buyers look at their cash on hand as their only source for their down payment. This simply is not the case. One way to fund or partially fund a down payment is by using a gift. Parents, grandparents and other family members are often eager to help by making a cash gift toward the purchase of your home.

There are also down payment assistance programs that can help you. And, of course, if you are selling a home, the equity you've built up can be applied to your down payment.

What size monthly payment can I afford?

When determining what size monthly payment you can afford, you'll want to consider what other monthly expenses you have. Tangible expenses such as car payments, day care, and utility bills all play a role in how large a monthly payment you can afford.

There are also the intangible expenses or lifestyle expenses that you'll want to consider. Things such as dining out, travel, and when you buy your next car can effect how much you can afford. Are you willing to curtail or delay some of these expenses in order to afford a larger monthly payment?

How much can I borrow?

This is a question you'll want to get answered before you begin your home search. This is something that we're here to help you with. Our mortgage calculators will help you see how your down payment, monthly payment, and the amount you borrow are all interrelated.

JENNY'S TIPS: How to deal with a Bankruptcy

2011-05-06T11:27:00.000-05:00

A bankruptcy filing delivers a devastating blow to your credit and FICO score, but it doesn’t mean you have to wait 10 years before you can qualify for a mortgage. Many consumers who have filed for bankruptcy have been able to obtain a mortgage, although it is often at a higher rate than someone qualifying for a prime or "A-paper" loan.

While credit card companies may care about what happened before you filed for bankruptcy, many mortgage lenders are more interested in your recovery — what you’ve done since your filing. It won’t happen over night, but here are some tips and things to keep in mind when you inquire about a mortgage with a tarnished credit past:

Give explanations

No mortgage lender is going to ignore the fact that you’ve filed bankruptcy and he or she will likely want to know the cause of the filing. Your lender will be particularly interested in whether the same situation could happen again. Your chances of being qualified are much better if your bankruptcy was caused by a single event such as a loss of employment or a death in the family, than if it was the result of “just spending too much.”

If the bankruptcy resulted from a single event, it is important to show your lender paperwork describing the incident, such as the layoff notice or death certificate. You may also want to bring in court documents to indicate when the bankruptcy was filed.

Demonstrate good money habits now

Many people who file bankruptcy swear off credit altogether, however, it is important to re-establish your credit rating. Get a secured credit card or take on some sort of loan — furniture, a car or a major appliance — to demonstrate that you are able to make timely payments. Make sure you are making other payments (utility bills, cell phone, etc.) on time as well. You won't turn things around in a year but your credit score will improve over time.

Dispute any credit report errors

There’s no need to add to your troubled credit history with errors on your credit report. Get a copy of your credit report from each of the three major credit reporting agencies: Equifax, http://www.equifax.com; Experian, http://www.experian.com; and TransUnion, http://www.tuc.com. If you encounter any errors, inform the CRA in writing what information you believe to be inaccurate and request deletion or correction.

Save your money

Lenders may be more willing to loan you money if you’ve saved up a considerable amount of money for a down payment.

Live within your means

Think small when the time comes to look for a home. Smaller homes often mean smaller mortgages.

Jenny's Home Buying Guide: 8 Steps to Home Ownership

2011-04-29T11:17:00.000-05:00

Step 1: Develop a Plan

The first step in every successful home purchase is to plan. You'll need to decide if buying a home right now is the right decision for you. If so, how much can you afford? Now is the time to start visualizing your dreams and writing down your goals.

Rent vs. Buy

Buying a home is one of the biggest investments you'll ever make, so you want to be sure that you are ready to make the leap. As a homeowner, you'll benefit from the equity you keep, tax deductions, and just the pride of ownership. But make sure the time is right. Predicting future job relocation, unstability at work, or other changes to your income will help avoid common pitfalls for new homeowners. Determining your long-term ability to pay the mortgage is part of Jenny's effort to practice Ethical and Responsible Lending.

How much can you afford?

Creating a budget makes you a smart and responsible homebuyer. Buying a home is a long-term commitment, so knowing how much you can afford to spend on the down payment, closing costs, and monthly payment will help you find the right-sized home. The typical range for the down payment is 3-20% of the sales price while closing costs usually are 2-5% of the loan amount.

Step 2: Understanding Rates

Understanding how mortgage rates work will help you become a smart homebuyer to ensure you get the loan that's right for you.

Rate affects monthly payment

The lower the interest rate, the lower the payment. Use our mortgage loan calculator to help determine your monthly payment based on any given rate.

Fixed Rate vs. Adjustable

A fixed interest rate gives you a secure rate that does not change over the life of the loan. An adjustable rate can be attractive to homeowners who plan on staying in their home for a short period of time.

Lower your rate with points

A discount point is an up-front fee that lowers your annual interest rate and total interest due over the life of your loan.

What is the Annual Percentage Rate (A.P.R.)?

The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.

When to lock your rate

Did you know that interest rates fluctuate daily according to market conditions? Lock-in your interest rate to protect your rate from going up before you head to the closing table. Jenny will help you decide when the time is right.

Step 3: Understanding Loans

With access to hundreds of loan programs from top national lenders, Jenny can offer you the most complete and diverse mortgage programs in the industry from her extensive loan portfolio. She can help you decide which loan best fits your financial goals.

Fixed Rate Loans

With a fixed-rate loan, your monthly payment of principal and interest never change for the life of your loan. Your property taxes may change, and so might your homeowner's insurance premium part of your monthly payment, but generally with a fixed-rate loan your payment will be very stable. Fixed-rate loans are available with 40-year, 30-year, 20-year, 15-year, and 10-year terms. You might choose a fixed-rate loan if you want to lock in a low rate and have the security of knowing it will never go up.

Adjustable Rate Mortgages (ARM)

With an ARM, the interest rate varies based on a particular index, normally the prime lending rate. Most programs have a "cap" that protects you from your monthly payment going up too much at once. In addition, almost all ARM programs have a "lifetime cap" -- your interest rate can never exceed that cap amount, no matter what. You might choose an ARM to take advantage of a lower introductory rate and count on either moving, refinancing again or simply absorbing the higher rate after the introductory rate goes up.

Hybrid Loans

Hybrid loans are an attractive loan choice for borrowers who want an ARM, but feel the need for added interest rate protection during their first years in the home. A hybrid loan gives you a fixed rate term, usually three, five, seven or ten years, with adjustable rates thereafter. These loans are typically expressed as a 3/1, 5/1, 7/1 or 10/1 ARM. The advantage of a hybrid loan is that it gives you a lower fixed rate mortgage than you'll typically receive with a 30 year mortgage. This is often an attractive loan choice for borrowers who expect to be selling their home within the first 10 years.

Jumbo Loans

A home mortgage for an amount greater than $417,000 is called a Jumbo or non-conforming loan. Jumbo mortgages exceed the loan limit set by Fannie Mae and Freddie Mac, two government sponsored, shareholder-owned, private companies that work to make sure mortgage money is available for people to purchase homes. Although they typically have a higher interest rate, Jumbo loans are available for homebuyers who require loan amounts up to $5 million.

Step 4: Get Prepared

Now that you're familiar with rates and loans, it's time to prepare for the steps ahead by getting to know your credit profile and gathering a few things you'll need to start your loan. Also, now is the time to figure out what your costs will be.

Review your credit report

Getting to know your credit history before you apply for a loan will help you understand what kind of mortgage you'll qualify for. You can find out important information like your credit scoreand any mistakes you may wish to dispute to help improve your credit rating. Before and during the mortgage process, you should refrain from making any credit purchases that may show up on your report and adversely affect your ability to get the mortgage you want. Jenny has worked with borrowers of all credit levels and will work with you to provide a solution that fits your needs.

Free Mortgage Planning Review

A personal one-on-one consultation with Jenny where you can discuss your goals and find out your best options. She will order and receive a copy of your credit report within seconds, review your credit report with you, and provide you a preliminary mortgage plan, usually all done within 10 minutes over the phone. Call 972.731.0165 today for your no-charge consultation.

Locate your financial records

Save valuable time by gathering together the loan documents that you may need to get your loan approved. Traditional loans require typical documentation to verify income, employment, and assets. If you are self-employed, retired, or work on commission, you may qualify for a low-documentation loan which requires fewer documents but usually with a higher interest rate and possible penalty fees.

Understanding loan costs

The key to understanding loan costs is to figure out what the fees are actually for. Also known as "closing costs", these fees represent the cost of doing the loan. Closing costs you may be responsible for include loan-related costs, tax costs, andinsurance costs. If you are buying a home, some costs may be negotiated with the seller, and your Real Estate Agent will help you negotiate these fees into the sales contract.

Jenny's Low Fee Promise

Unlike the big banks with high overhead, Jenny's promise as President of North Dallas Mortgage LLC is to keep your rates and fees as low as possible. With substantially lower overhead, Jenny is positioned to create an attractive loan program to fit your needs and earn your repeat business.

Step 5: Get Pre-Qualified first, then Pre-Approved

Before you go house hunting, Jenny recommends that it's best to go with leverage. Arm yourself with a pre-qualification or pre-approval letter and let sellers know you're serious. Don't let that dream home get away from you because the Seller is more willing to work with another buyer who is in a stronger position to make an offer on their home.

Pre-Qualification

During the pre-qualification process, we help you determine how much of a monthly mortgage payment you can afford and how much we can loan you. We do this by considering your income and debts, your employment and residence situations, your available funds for down payment and required reserves, and some other things. It's short and to the point, and we keep the paperwork to a minimum.

Pre-Approval

It is important to understand that a pre-qualification is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home because you have been approved for a loan for a specified amount.

Jenny is a Pro who knows how to get you approved. Throughout her over 14 year career, Jenny has helped hundreds become homeowners and encountered every possible loan situation. She has worked with everyone from the first-time homebuyer to the experienced veteran. Jenny has become successful by listening to your needs and goals, understanding your individual financial situation, and customizing a mortgage solution to get you approved and into your new home quickly.

Step 6: Shop for a Home!

It's time for the most exciting part of the process: home shopping! With your budget already mapped out, you can now start the fun process of finding the right home in the right neighborhood.

Target the Right Home

Consider features you would like in a home such as number of rooms, pool, fireplace, and yard size. Take into account design features like one vs. two story, modern vs. colonial, front vs. back garage, etc. Also consider your current and future needs: proximity to your job, schools, and family; do you need a yard for the dogs and a two car garage?; will you need more bedrooms if you're starting a family soon? Take the time to discuss your needs and find a home you will love for years to come. For a free wish list worksheet to print and take with you while touring homes, visit Realtor.com.

Work with a Professional

Why work with a Real Estate Buyer's Agent? Because they know the current market, price trends, and neighborhood conditions in the area you're looking for. They also know how to negotiate your sales contract and close the deal on your new home. And they will help you shop homes, tour listings, and use all available tools like MLS, the Web, and their network of referrals to make sure you find the right one. Best of all, there is no cost to you to use a Buyer's Agent because they are paid a commission from the seller when the home sells. A Licensed Agent is also known as a Realtor. Learn more about why you should use a Realtor. Jenny has worked with hundreds of Realtors and can help you find the right Agent.

Step 7: Processing Your Loan

While you're out house hunting, Jenny is busy taking care of your loan so you don't have to worry about getting to the closing table. She will put together all your loan documents in a way that best delivers the approval you need quickly and efficiently. This is where Jenny's experience comes into play: while most big banks and other lenders try to fit you into their cookie-cutter loan program, Jenny will work to develop the loan around you. As a result, over 90% of her loans are approved. How long will it take to close? A typical loan takes 3-4 weeks from the time you sign the sales contract to go to closing. If you require faster closing Jenny can assess your individual situation and, if possible, provide a quicker timetable. Let's take a look at what happens during the processing phase:

Get the right fit

The key to getting your loan approved is to make sure you get the right "fit" from the start. This fit will make sure you and your loan meet the Lender's Underwriting guidelines, the basis for approval. Based on the data from the loan application you provided, Jenny will develop a loan program around you and use her extensive knowledge of Lender's requirements to make sure that every loan she starts is a loan she closes.

Get a Home Inspection

If you are buying a home, you need to know exactly what you are getting. A home inspection, performed by a professional home inspector, will reveal any hidden problems with the home so that they may be addressed BEFORE the deal is closed. You should require an inspection at the time you make a formal offer. Make sure the contract has an inspection contingency. Then, hire your own inspector and pay close attention to the inspection report. If you aren't comfortable with what he finds, you should back away from the deal. Although not typically a lender requirement, home inspections are highly recommended for your piece of mind. Typical fees range from $200-250. Ask Jenny for a list of her personally recommended Home Inspectors. If you are concerned about wood damage, most Home Inspectors can also conduct a termite inspection for an additional fee.

Submit loan documention

During the pre-approval process, you will receive Jenny's Welcome Packet which includes your loan application, disclosures, and an initial checklist of documents we will require to process the loan. Among these documents is a copy of the sales contract. You may also be required to provide additional documentation during loan processing if more information is needed.

Order Property Appraisal

In many cases, lenders need a professional, independent appraisal of the property you want to buy to ensure that it is worth at least as much as they are being asked to lend on it. If required, Jenny will order the appraisal and schedule the date with you. Typical appraisal fees are $350-500.

Order Title Search

Your loan closing will most likely occur at a Title, or Escrow company. Prior to closing, we will work with the Title company to order a title search,title insurance, a survey of your property's boundries, and a flood certificate. If a new survey is required, typical third party survey fees range from $350-500.

Order Homeowners Insurance

A homeowner's insurance policy is a package policy that combines more than one type of insurance coverage in a single policy. There are four types of coverages that are contained in the homeowners policy: dwelling and personal property, personal liability, medical payments, and additional living expenses. Homeowner's insurance, as the name suggests, protects you from damage or loss to your home or the property in it, and is a requirement of many lenders.

Lock-in your rate

A rate lock or a rate commitment is a lender's promise to hold a certain interest rate and a certain number of points for you for a specified period of time while your application is processed. This prevents you from going through your whole application process and at the end of it finding out the interest rate has gone up. Jenny will recommend the right time to lock-in your rate to prevent any rate changes during the processing period.

Underwriting

Once you have submitted the necessary loan documents, Jenny will review your loan file and prepare it for submission to Underwriting for loan approval. At this time the Underwriter may request any additional information they need to help the decision-making process. Once the Underwriter has granted final approval, your loan will be ready for the next step: loan closing.

Step 8: Closing Your Loan

By now you've found a home, turned in all your loan paperwork, and with Jenny's help, placed all your "ducks in a row" to get your final loan approval. In this last stage, you will complete the loan process and finally get the keys to your new home.

Schedule closing meeting

Your closing meeting usually takes place at the Title/Escrow company on weekdays during business hours. Jenny and the Escrow Agent will arrange the date and time with you.

What to bring to closing

Be prepared to bring a money order or certified bank check for the down payment and closing costs. Jenny will let you know ahead of time the amount you should bring. Also bring your driver's license for identification.

Consider an Escrow Account

If you plan to include property taxes and insurance as part of your monthly payments, the Closing Agent will setup an escrow account to hold your reserves. If not, you will be responsible for making your property taxes and homeowners insurance payments every year on your own. Jenny can help you decide your best option.

Review HUD-1 Settlement Statement

The HUD-1, also known as the settlement statement, is a prescribed form from the U.S. Department of Housing and Urban Development (HUD). This form itemizes all charges imposed on the borrower and all charges imposed on the seller in connection with the settlement of your real estate transaction. The Title company completes and provides the HUD-1 Settlement Statement usually one business day before the closing date. Jenny will help you review the HUD-1 to make sure there are no surprises.

Receive Truth-in-Lending (TIL) Disclosure

Important information provided by the Lender disclosing details of your loan including the amount financed, total payments over the term of the loan, total finance charges, monthly payment schedule, and Annual Percentage Rate (APR).

Receive your Mortgage or Deed of Trust

A mortgage is actually the formal document proving the legal claim or lien on a piece of property that you give to the lender who holds it as security for the money you borrowed. The lien is recorded in public records. On a mortgage, you pledge the property as security for the repayment of your loan, but you do not transfer title to the lender.

Receive the Note

A binding legal document that obligates you to repay the mortgage loan at a stated interest rate during a specified period of time.

Get your keys!

Once your loan has funded, it's time to get the keys to your new home from the Title company. Congratulations, you're now a proud homeowner!

DEAR JENNY: What are Closing Costs?

2011-04-22T09:36:00.000-05:00

There are so many different charges involved in buying a home, it is important to know what to expect at the settlement. Your lender is required to give you a Good Faith Estimate (GFE) of your settlement costs within three business days of your loan application. Once you get it, review the charges below to avoid any surprises when you sit down to close on your loan.

1. Fees to get a mortgage

This includes lender fees and points, as well as a host of other charges involved in obtaining and processing your loan. Points are an upfront charge expressed as a percent of the loan amount (e.g., 1 point is 1 percent of the loan) to increase the lender's effective yield on a loan.

Specific lender fees can include:

Loan Origination Fee - This is a charge for your lender's work in evaluating and preparing your mortgage loan.
Application Fee – This charge covers the initial costs of processing your loan application and obtaining your credit report.
Appraisal Fee – Your lender will need an opinion from an independent appraiser of the market value of the home you wish to purchase.
Survey – This fee goes to a surveying firm who will verify that your lot has not been encroached upon by any structures since the last survey conducted on the property and to ensure that the home and other structures and legally where the seller says they are.
Mortgage Insurance – A lender may require this type of insurance for buyers who make a down payment of less than 20 percent of the value of the house. The policy covers the lender's risk in the event the buyer fails to make the loan payments. Premiums are typically paid annually from an escrow or reserve account, or in a lump sum at closing.
Homeowner's Insurance – Insurance that protects property against loss caused by fire, some natural causes, vandalism, etc., depending on the terms of the policy. Also includes coverage such as personal liability and theft away from home. Your lender will expect you to have a policy in effect by closing.

2. Fees to establish and transfer ownership of the property

Your lending institution is not likely to give you a loan on a house unless you can prove that the seller owns the property you want to buy. This is where title search and title insurance fees come into play. A title agent will verify that the seller is, indeed, the owner of the property and issue a title insurance policy to guard the lender against any errors that could have occurred in the searching process. The cost of the policy is usually based on the loan amount. There may also be attorney, escrow, courier fees and other charges involved in the settlement process.

3. Fees to state and local governments

These fees include transfer, recordation and property taxes collected by local and state governments. Your taxes based on the assessed value of the home, which you pay for community services such as schools, public works, and other costs of local government. Taxes can often be paid as a part of your monthly mortgage payment.

DEAR JENNY: What is the difference between interest rate and A.P.R.?

2011-04-15T12:55:00.000-05:00

You'll see an interest rate and an Annual Percentage Rate (A.P.R.) for each mortgage loan you see advertised. The easy answer to "why" is that federal law requires the lender to tell you both.

The A.P.R. is a tool for comparing different loans, which will include different interest rates but also different points and other terms. The A.P.R. is designed to represent the "true cost of a loan" to the borrower, expressed in the form of a yearly rate. This way, lenders can't "hide" fees and upfront costs behind low advertised rates.

While it's designed to make it easier to compare loans, it's sometimes confusing because the A.P.R. includes some, but not all, of the various fees and insurance premiums that accompany a mortgage. And since the federal law that requires lenders to disclose the A.P.R. does not clearly define what goes into the calculation, A.P.R.s can vary from lender to lender and loan to loan.

The A.P.R. on a loan tied to a market index, like a 5/1 ARM, assumes the market index will never change. But ARMs were invented because the market index changes and makes fixed rate loans cheaper or more expensive to make -- that's why they're variable rate in the first placed!

So, A.P.R.s are at best inexact. The lesson is that A.P.R. can be a guide, but you need a mortgage professional to help you find the truly best loan for you.

Note when you're browsing for loan terms that the A.P.R. will not tell you about balloon payments or prepayment penalties, or how long your rate is locked. Also, you'll see that A.P.R.s on 15-year loans will carry a higher relative rate due to the fact that points are amortized over a shorter period of time.

Why you should get a home inspection

2011-04-08T11:19:00.001-05:00

Whether you are buying or selling a home, you should have a professional home inspection performed. A home inspection will look at the systems that make up the building such as:

Structural elements, foundation, framing etc.
Plumbing systems
Roofing
Electrical systems
Cosmetic condition, paint, siding etc.

If you are buying a home, you need to know exactly what you are getting. A home inspection, performed by a professional home inspector, will reveal any hidden problems with the home so that they may be addressed BEFORE the deal is closed. You should require an inspection at the time you make a formal offer. Make sure the contract has an inspection contingency. Then, hire your own inspector and pay close attention to the inspection report. If you aren't comfortable with what he finds, you should back away from the deal.

Likewise, if you are selling a home, you want to know about such potential hidden problems before your house goes on the market. Almost all contracts include the condition that the contract is contingent upon completion of a satisfactory inspection. And most buyers are going to insist that the inspection be a professional home inspection, usually by an inspector they hire. If the buyer's inspector finds a problem, it can cause the buyer to get cold feet and the deal can often fall through. At best, surprise problems uncovered by the buyer's inspector will cause delays in closing, and usually you will have to pay for repairs at the last minute, or take a lower price on your home.

It's better to pay for your own inspection before putting your home on the market. Find out about any hidden problems and correct them in advance. Otherwise, you can count on the buyer's inspector finding them, at the worst possible time.

Tarrant County: Homebuyer Financial Assistance for First Time Homebuyers

2011-04-03T21:22:00.004-05:00

As a leader in the effort to make quality, affordable housing accessible to all, Tarrant County Housing Partnership administers a number of programs that provide down payment, closing cost or principle reduction assistance for low and moderate income individuals and families.

Each program varies: in some instances, assistance is only available for specific properties, in other instances, assistance is open to homebuyers in specific communities. A brief overview of each program’s key components and eligibility requirements follows.

Important note: You must at least attend a TCHP Orientation Class in order to be considered for assistance. Attending TCHP’s other homeowner classes is strongly encouraged, and in some instances, may be required in order to receive your funding. Your counselor can provide additional information. View a class schedule.

Arlington Homebuyer Assistance Program (AHAP)

• For first-time homebuyers purchasing a home in Arlington only.

• This program provides up to $7,500 in down payment/closing cost assistance. Up to $10,000 of assistance is available for qualified Social Security Income recipents OR for purchase of properties located in the NSRA target area.

• The home purchased must meet minimum property standards.

Development Corporation of Tarrant County (DCTC)

• This program provides up to $14,999 in down payment/closing cost assistance and principle reduction for first-time homebuyers who are purchasing DCTC-owned properties, which are located throughout Tarrant County.

To learn more about these programs, contact Jenny or visit http://www.tchp.net/programs_services/financialassistance.html

JENNY'S TIPS: How to Get Your Loan Faster

2011-04-01T09:17:00.000-05:00

Five ways to make the loan process go faster

We should say that "working with us" is the first way! When you let us help you find the loan that's right for you, you truly are taking advantage of some of the area's best technology and expertise to get you a loan decision and funding on your loan quickly. But here are five "other" ways you can speed up the process of getting a mortgage loan:

1. Have everything ready and in one place.

You'll find a list of things you might need in support of your mortgage application by clicking here. If you get them all together and keep them in a safe, portable place like a special pouch or folder, you can cut down on time spent rooting around for things we may need. Also, you'll help cut down on your own anxiety and confusion.

2. Be honest and complete when you fill out your application.

"Fudging" your employment or residence history or omitting open credit accounts you'd rather not have considered doesn't increase your chances of getting a favorable loan. In 100 percent of cases, it makes it harder, and take longer.

3. Respond promptly to requests for additional information.

During processing, we or the lender considering your loan may need additional information. Provide it as soon as you get the request, or return the call as soon as you get the message.

4. Be prepared to explain derogatory items in your credit report.

This is really part of number 2 above. If you had an illness or a divorce where you missed or made late payments, or you have other instances of late payments or delinquencies on your credit report, be prepared to explain them. Be honest, and don't be nervous! The loan processor isn't judging you, they're trying to fill in all the blanks in their paperwork.

5. Let the appraiser in!

The appraisal is one of the lengthiest parts of the mortgage loan process. Studies have shown that the single biggest factor in appraisal "lag time" is the appraiser's inability to reach the homeowner to make an appointment. If you're refinancing and the appraiser calls to make an appointment, make it as soon as convenient for both of you.

And remember that the appraiser doesn't want to buy your house. He or she will say what the house is worth clean and tidy and in reasonable repair, even if you have some dirty laundry on the laundry room floor or dirty dishes in the sink. Cleaning doesn't get you a higher appraisal! Letting the appraiser in as soon as possible gets you a loan faster, though.

How to Reduce Your Mortgage with One Additional Mortgage Payment a Year

2011-03-25T10:38:00.000-05:00

There's a simple trick to significantly reduce the length of your mortgage and save you thousands of dollars. The trick is to make one extra mortgage payment a year and apply that payment toward your loan's principal.

This is the method being used by "Bi-Weekly Mortgage Reduction Services" and "Bi-Weekly Mortgage Savings Programs". Only, when you do it yourself, you don't pay a third party unnecessary set-up costs and fees!

Example: $100,000 loan, 30-year mortgage, 6.5% fixed interest rate

Extra Mortgage Payments/ Year	Principal & Interest	Additional Monthly Payment	SAVINGS	Total Paid	# of Years
0	$632.07	0	0	$227,542.98	29.92 / 359 mos.
1	$632.07	$52.68	$29,088.02	$198,454.96	24.12 / 290 mos.
2	$632.07	$105.35	$46,492.13	$181,050.85	20.5 / 246 mos.
3	$632.07	$158.02	$58,320.95	$169,222.03	17.92 / 215 mos.
4	$632.07	$210.69	$66,969.79	$160,573.19	15.92 / 191 mos.
5	$632.07	$263.36	$73,607.77	$153,935.21	14.34 / 172 mos.

One-time Payment

It may not be possible for you to increase your monthly mortgage payment. Keep in mind that most mortgages will permit you to make additional payments to your principal at anytime. Perhaps, five-years after moving into your home you receive a larger than expected tax return, or an inheritance or a non-taxable cash gift. You could apply this money toward your loan's principal, resulting in significant savings and a shorter loan period.

Example:

With a $100,000, 30-year, 6.5% fixed interest rate mortgage loan, the borrower will pay a total of $227,542.98 to pay back the loan in 30 years. That equals $127,542.98 in interest payments.

If the same borrower makes a one-time $5,000 payment the first day of year 6, he/she will pay a total of $204,710.75 and pay off the loan in 27 years (324 months). That's a savings of $22,832.23 in interest.

DEAR JENNY: Should I get pre-qualified before house hunting?

2011-03-18T14:56:00.000-05:00

Absolutely! Even if you haven't so much as picked out houses to visit yet, it's important to see your mortgage professional first. Why? What can we do for you if you haven't negotiated a price, and don't know how much you want to borrow?

When we pre-qualify you, we help you determine how much of a monthly mortgage payment you can afford, and how much we can loan you. We do this by considering your income and debts, your employment and residence situations, your available funds for down payment and required reserves, and some other things. It's short and to the point, and we keep the paperwork to a minimum.

Once you qualify, we give you what's called a Pre-Qualification Letter (your real estate agent might call it a "pre-qual"), which says that we are working with you to find the best loan to meet your needs and that we're confident you'll qualify for a loan for a certain amount.

When you find a house that catches your eye, and you decide to make an offer, being pre-qualified for a mortgage will do a couple of things. First, it lets you know how much you can offer. Your real estate agent will help you decide on an appropriate offer, but being pre-qualified gives you the confidence to know you can follow through. More importantly, to a home seller, they won't have to wonder if they're wasting their time if you don't qualify for a mortgage to finance the amount you're offering for the home.

If you don't qualify right now due to income or credit issues, its best to know as early as possible so we can work with you to improve your situation. Purchasing a home is a step-by-step process and preparation is the key.

JENNY'S TIPS: Buying a home? Then don't do this!

2011-03-11T11:01:00.004-06:00

Things to Avoid Before You Buy a Home

Many new homebuyers make the mistake of rushing out to buy things to fill their home with as soon as the seller accepts their purchase offer and the lender pre-approves their loan. But there are still a few major hurdles to overcome before the keys are handed out. Here are some things to avoid during the home buying process to assure your transaction goes as smoothly as possible.

Don't make an expensive purchase

It may be tempting to order that new sofa for your soon-to-be living room, but its best to avoid making major purchases like furniture, cars, appliances, electronic equipment, jewelry, or vacations until after the closing. Financing that furniture with a store credit card or even one of your own credit cards could jeopardize your credit worthiness during the time it means the most. Using cash to purchase big items can also create a problem because many banks take into consideration your cash reserve when approving your mortgage.

Don't get a new job

Lenders like to see a consistent job history. Generally, changing jobs will not affect your ability to qualify for a mortgage loan - especially if you are going to be making more money. But for some people, getting a new job during the loan approval process could raise some concern and affect your application.

Don't switch banks or move money around

As your lender reviews your loan package, you will likely be asked to provide bank statements for the last two or three months on your checking accounts, savings accounts, money market funds and other liquid assets. To eliminate potential fraud, most loans require a thorough paper trail to document the source of all funds. Changing banks or transferring money to another account - even if its just to consolidate funds - could make it difficult for the lender to document your funds.

Don't give a good faith deposit directly to the seller in a FSBO (For Sale By Owner) purchase

As a rule, your good faith deposit belongs to you, not to the seller, until the deal closes. Your FSBO seller may not know that your good faith funds should be applied to your expenses at closing. Get an attorney or other neutral party who can hold the deposit or put it in a trust account until you close on the home. Your purchase contract should dictate to whom the funds go should the transaction fall through.

Don't disregard your lenders requirements

You may have been pre-approved for the loan but your work with the lender is far from over. In order to process your loan, you need to meet certain requirements. Your lender will need copies of your bank statements, W2s and other paperwork. It is up to you to get it to him or her as soon as possible. Failure to submit certain qualifying documents could cause you to lose your loan and the financing you need to buy your home.

FHA 203(k) Loan Program - Turning “Fixer-Uppers” into Dream Homes

2011-03-04T12:05:00.003-06:00

What is the Section 203(k) Loan Program?

If you want to buy a home that needs repair or finance needed repairs to your current home, the Section 203(k) loan program by the U.S. Department of Housing and Urban Development (HUD) may be a good option for you. This program allows you to finance the purchase of a house—or refinance your current mortgage—and include the cost of its repairs through a single mortgage.

The Section 203(k) loan program is HUD’s primary Program for the rehabilitation and repair of single family properties. Section 203(k) loans are provided through HUD-approved mortgage lenders nationwide and insured by the Federal Housing Administration (FHA), which is part of HUD. “Section 203(k)” refers to the law, part of the National Housing Act, which allows FHA to make this mortgage insurance available.

The loans are beneficial for low and moderate income individuals or families since the loan down payment can be as little as 3 percent. While individuals, local governments, and non-profit organizations may participate as borrowers in the program, the property must be used as a principal residence by an individual or family.

How the Loan Works

You can take out a Section 203(k) loan as a 15 or 30 year fixed-rate mortgage or as an Adjustable Rate Mortgage (ARM) from a HUD-approved lender. The total amount of your mortgage will be based on the projected value of your home after the renovation is completed, taking into account the cost of the work. A portion of your loan is used to pay for the purchase of the home, or in the case of a refinance, to pay off any existing debt. The remainder is placed in an interest-bearing account on your behalf and released in stages as rehabilitation is completed.

FHA requires that you use a minimum of $5,000 toward eligible repairs or improvements and that you complete the repairs within six months after the loan’s closing depending on the extent of work to be completed. This first $5,000 primarily covers eliminating building code violations, modernizing, or making health and safety-related upgrades to the home or its garage. You may add minor or cosmetic repair after this requirement is satisfied, if applicable. You cannot include improvements for commercial use or luxury items, such as tennis courts, gazebos, or new swimming pools.

Eligible Home Improvements

The Section 203(k) loan covers a range of home improvements. These include, but are not limited to, the following:

• Remodeling bathrooms or a kitchen, including new built-in appliances

• Replacing a roof, gutters, and downspouts

• Adding a family room, bedrooms, or bathrooms

• Replacing flooring, tiling, or carpeting

• Completing a basement or attic conversion or adding a second story

• Expanding or building a garage or carport

• Renovating a deteriorating property, such as repairing a chimney, termite damage, or structural problems

• Upgrading plumbing, heating, air conditioning, or electrical wiring

• Eliminating health and safety hazards, such as removing lead-based paint

• Making the home accessible to the disabled

• Installing a well or a septic system

• Adding a porch, deck, or patio

• Adding or repairing siding or repainting

• Installing energy efficient windows or doors

• Repairing an existing swimming pool

(Source: HUD-2005-09-FHA February 2005 http://www.hud.gov/ espanol.hud.gov)

McKinney Grant Program Offers Up to $10,000

2011-02-22T10:39:00.000-06:00

The City of McKinney’s Community Services Department is helping first-time homebuyers fulfill their dreams of owning a home. The Homebuyer Assistance Program provides down payment and closing costs assistance up to $10,000 for first-time homebuyers purchasing in McKinney with low to moderate income. Funds are made available through a grant from the Texas Department of Housing and Community Affairs' HOME Investment Partnership Program.

Some requirements of the program include:

First-time homebuyers. A first-time homebuyer is an individual or household who has not owned a home in the last three years or is a displaced homemaker.

Proof of U.S. citizenship or permanent legal resident alien status.

Qualifying for a mortgage loan with a private lender.

Income that does not exceed 80 percent of the Area Median Income.

The home purchased through the program will be the principal residence.

The home must be located within the city limits of McKinney.

Completion of a HUD and City of McKinney approved homebuyer counseling workshop.

Contact Jenny today for more information or to see if you qualify for this grant program.

JENNY'S TIPS: FHA vs Conventional Loans

2011-02-18T11:44:00.001-06:00

One of the most popular questions I get asked by my home buyers is "What is the difference between FHA and conventional loans (Fannie Mae and Freddie Mac)?"

Here is a general comparison:

FHA Conventional

3.5% Down Payment Required 5% Down Payment Required

6% Maximum Seller Contribution 3% Maximum Seller Contribution

Up Front Mortgage Insurance Premium No Upfront MIP
(MIP) Financed into the Loan

Monthly Mortgage Insurance Monthly Mortgage Insurance
with less than 20% down with less than 20% down

Lower credit score required Higher credit score required

Max 1 FHA Loan per Person for Max 4 Loans per Person -
Primary Residence Loan 1 Primary Residence and
3 Investment Properties

These are general guidelines. Borrowers should be reviewed on a case-by-case basis. In today's market, mortgage guidelines are constantly changing as regulators try to "fix" the industry. The trend is that mortgage qualifications will only get tougher, so if you qualify to purchase now, ACT TODAY! What is available today may not be available tomorrow!

JENNY'S TIPS: How to Dispute Errors on your Credit Report

2011-02-15T10:11:00.005-06:00

Your credit report is a record of your credit activities. It lists all of your credit card accounts and loans, the balances as well as your payment history. It also shows if any action has been taken against you because of unpaid bills such as a lawsuit or bankruptcy filing. Because businesses use this information to evaluate your applications for credit, insurance and employment, it’s important that the information in your report is complete and accurate, especially if you plan to make a big purchase like a home.

The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission (FTC), is designed to promote accuracy and ensure the privacy of the information used in consumer reports. Under the FCRA, both the credit reporting agency (CRA) and the organization that provided the information to the CRA (usually the credit card company) must correct any errors or incomplete information in your report.

If you do encounter a mistake on your credit report, several steps need to be taken to correct the matter:

1. The first thing to do is get a copy of your credit report from each of the three major CRAs: Equifax, http://www.equifax.com/; Experian, http://www.experian.com/; and TransUnion, http://www.tuc.com/.

2. In a written letter, tell the CRA what information you believe to be inaccurate. Include copies (not originals) of documents that support your position. Provide your complete name and address, identify each item in your report you dispute, and request deletion or correction. Be sure to make copies of your dispute letter and enclosures.

3. Send your letter by certified mail, return receipt requested, so you can document what the CRA received.

4. The FCRA mandates that all CRAs reinvestigate the items in question — usually within 30 days — unless they consider your dispute frivolous. They also must forward all relevant data you provide about the dispute to the credit card company. After the credit card company receives notice of a dispute from the CRA, it must investigate, review all relevant information and report the results to the CRA.

5. If the disputed information is found to be inaccurate, the credit card company must notify all nationwide CRAs so they can correct this information in your file. Disputed information that cannot be verified must be deleted from your file.

6. When the reinvestigation is complete, the CRA must give you the written results and a free copy of your report if the dispute results in a change. If an item is changed or removed, the CRA cannot put the disputed information back in your file unless the credit card company verifies its accuracy and completeness, and the CRA gives you a written notice that includes the name, address, and phone number of the credit card company.

7. In addition to the CRA, you should also write to the credit card company about the error. Again, include copies of documents that support your dispute. If you are correct — meaning the information you disputed is found inaccurate — the credit card company cannot use it again. Further, at your request, the CRA must send notices of corrections to anyone who received your report in the past six months.

There are several credit montoring companies online. If you plan to purchase a home in next 12 months, using a credit monitoring service will help you know what improvements you need to complete in order to reach your goal of buying a home.

Mortgage Market Trend

2011-02-14T11:58:00.001-06:00

The near-term trend trajectory for mortgage interest rates hinges on the current pace of inflation - both at the factory gate and on Main Street.

Market participants expect Wednesday's Producer Price Index (released at 8:30 a.m. ET) to show an overall gain of 0.8% driven by higher food and energy prices -- while Thursday's Consumer Price Index (released at 8:30 a.m. ET) is projected to show a composite gain of a more modest 0.3%. As long as the actual values for these two big inflation reports match or fall below their respective forecast mortgage interest rates will likely move sideways to perhaps fractionally lower. That's the good news. The bad news is that if one, or both, of these reports exceed the consensus estimate -- mortgage investors will almost certainly be quick to push mortgage interest rates higher.

This is not the time to aggressively take mortgage market risk - especially for loans planning to "lock" within the next five trading days.

JENNY'S TIPS: Are you pre-qualified or pre-approved for a loan?

2011-02-09T12:35:00.001-06:00

Before you begin to shop for a new home, you should figure out how much you can afford. This will put you in a better position as a buyer. That’s when it is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be important when you decide to make an offer on a house.

To get pre-qualified for a loan, I will collect information about your debt, income, and assets. We’ll look at your credit profile and assess goals for a down payment and get an idea of different loan programs that would work for you. I will issue you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow, not a commitment to lend. Getting pre-approved for a loan gives you more of a competitive advantage when the time comes to bid on a home because you have actually been approved for a loan for a specified amount.

To get pre-approved, you will complete a mortgage application and provide me with various information verifying your employment, assets and financial status such as W-2 forms, bank records and credit card statements. We’ll review your mortgage options and submit your application to the lender that best meets your needs. Once the application process is complete you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.

GOOD NEIGHBOR NEXT DOOR PROGRAM: Home Loans for Police, Teachers, Firefighters, and EMTs

2011-02-07T09:15:00.005-06:00

Source: Creative Commons

Law enforcement officers, pre-Kindergarten through 12th grade teachers, firefighters, and emergency medical technicians can contribute to community revitalization while becoming homeowners through HUD's Good Neighbor Next Door Sales Program. HUD offers a substantial incentive in the form of a 50% discount from the list price of a home. In return, you must commit to live in the property for 36 months as your sole residence.

For more details: http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm

TIPS FOR REALTORS: Tax Refund as Down Payment

2011-02-03T12:10:00.006-06:00

Right now is the perfect time to call all your clients and encourage them to use their tax refund as down payment to purchase a home! From an underwriting perspective, tax refund is an accumulated income from buyers and is perfectly acceptable to use as down payment.

Some buyers are locked in with an apartment contract for as long as 12 months, and may not be ready to buy now. They should be referred to an experience loan officer to help get them ready. Preparation is vital when comes to getting a home loan approved. Let me help your clients today!

Mortgage and Economic News This Week 01-31-11

2011-01-31T10:24:00.003-06:00

This week is extremely busy in terms of economic data scheduled for release and will likely be another active week for mortgage rates. There are five economic releases scheduled for the week, some of which are known to be extremely influential on the financial and mortgage markets. All five of these reports are considered to be of moderate or high importance, meaning we should see quite a bit of movement in mortgage rates this week.

The first report of the week is January's Personal Income and Outlays data tomorrow morning, which gives us an indication of consumer ability to spend and current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for an increase in income of 0.5% while spending is expected to rise 0.6%. Larger increases would be good news for the stock markets and could hurt bond prices, driving mortgage rates higher tomorrow. Smaller than expected increases would be considered good news for mortgage rates.

Tuesday also has only one economic report with the Institute of Supply Management's (ISM) manufacturing index. This index tracks manufacturer sentiment by rating surveyed trade executives' opinions of business conditions. It is usually the first economic data released each month and is one of this week's very important reports. Current forecasts are calling for a reading in the neighborhood of 57.5 that would be an increase from December's reading. The lower the reading, the better the news for the bond market and mortgage rates because weak sentiment indicates a slowing manufacturing sector.

Wednesday has no government reports scheduled or data that is considered likely to impact mortgage rate. However, there are a couple of private sector employment-related reports due to be released. They normally would not be of much concern, but one of them showed an unexpected spike in new hires recently that caused selling in bonds and an increase in mortgage rates. I still am not too concerned about their results, but the potential does exist that a significant variance in the numbers could lead to changes in mortgage pricing.

Employee Productivity and Costs data for the 4th quarter will be released early Thursday morning. It can cause some movement in the bond market, but should have a minimal impact on mortgage pricing. If it varies greatly from analysts' forecasts of a 2.2% increase, we may see some movement in mortgage rates. However, the markets will be much more interested in Friday's data, so a slight difference shouldn’t cause a noticeable movement in mortgage rates.

Late Thursday morning, December's Factory Orders data will be posted. It is similar to last week's Durable Goods Orders release in giving us a measurement of manufacturing sector strength, but this data includes new orders for both durable and non-durable goods. It is one of the less important reports of the week, but can influence mortgage pricing if it varies greatly from forecasts. Analysts are expecting a 0.7% decline in new orders, hinting at manufacturing sector weakness.

Friday's data is by far the most important of the week. The Labor Department will post January's Employment data early Friday morning, giving us the U.S. unemployment rate and the number of jobs added or lost during the month among other related statistics. Analysts are expecting to see the unemployment rate rise from 9.4% to 9.6% and that approximately 150,000 new jobs were added to the economy. An increase in unemployment and a loss in payrolls would be great news for the bond market. It would probably create a bond market rally, leading to lower mortgage rates Friday morning. However, if Friday's report reveals stronger than expected results, we can expect to see mortgage rates move higher.

Overall, look for tomorrow, Tuesday or Friday to be the biggest day for mortgage rates. Friday's Employment report is the most important piece of data, but Tuesday’s ISM Index draws a lot of attention also. We could also see movement in rates tomorrow morning following the activity at the end of last week. If we get weaker than expected results from Tuesday's ISM report and Friday's employment data, we should see rates close the week lower than last Friday's closing levels. If the data shows stronger than expected results, we may see mortgage rates move higher for the week. With some very important data being posted over the next five days, I strongly recommend keeping fairly constant contact with me if you are still floating an interest rate.

Mortgage Case Study: Home Buyer with 580 Credit Score

2011-01-28T10:04:00.005-06:00

We closed a FHA loan with a home buyer that has a mid fico score of 580, which is below the current standard now of 640. The process does require more planning for the loan officer and buyers.

Here are the things we evaluated: (The best plan for a real estate professional is to work with a loan officer to evaluate the buyers ability to purchase a home, or just contact us.)

Credit - Their credit of course is less than ideal, but one major factor not listed on the credit report is their rental history. They had an excellent rental history and no collection or charged offs from any apartments they ever lived.

Assets - I recommended them to have (on top of their down payment) at least 2 months PITI (principle, interest, taxes and insurance) saved in any of their retirement, 401K, checking, or savings account.

Bank Statements - Bank statements took time to plan and execute. I reviewed their most recent 2 months statements and it is obvious they are spending more than what they made. Underwriters will view that as failure for the home buyers to budget their finances, and therefore cannot afford to purchase a house. I sat down with the buyers and worked out a budget for them to follow. After 2 months following the budget, they closed on their loan and were very happy.

I sincerely believe home ownership is for everyone. It does take planning, working the plan, and willingness to change your life style to fit a mortgage into the budget.

Tarrant County Bond Program

2011-01-25T08:46:00.002-06:00

Properties must be located in Tarrant County (excludes Grand Prairie, Southlake, Grapevine, and Keller)

◊ First come, first served reservation process: scan and email the completed 1003 and first page of the contract to: jenny@jennyloans.com

◊ 2010 Tax returns will be required when available

◊ FHA loans only: cannot be combined with TX Vet or MCC Program

◊ Owner Occupied

◊ 4.70% fixed rate, 30 year loan program provides 3.0% of the total loan amount as a gift to be used towards down payment or closing costs (called bond premium proceeds). Example: $100,000 loan receives a $3000 gift ◊ 1 discount plus 1 origination fee ◊ Sales price limit $243,945

◊ Income tax recapture provisions apply

◊ Income of all applicants count towards income limit: includes non-purchasing spouse

◊ Target area census tracts have different guidelines

City Grant for Down Payment Assistance

2011-01-24T17:34:00.002-06:00

For many years, I've worked with several cities in the Dallas Fort Worth area to provide down payment assistance through block grant programs for first-time homebuyers (or anyone else who has not owned a house in the last 3 years.)

Here is information you need know about the different city programs currently available in the market (Call me if you don't see the city you're wanting to purchase a house from):

McKinney: Must purchase house under $130,000. McKinney will pay 1/2 of your down payment and all of your closing cost up to $7,500.

Grand Prairie: Must purchase house under $160,000. $5,000 grant will be given without any repayment terms.

Plano: Must purchase house under $140,000. Plano will also pay 1/2 of your down payment and most of your closing cost or NSP program for purchasing a foreclosure home.

Lewisville: Up to $7,500 will be given to the first time homebuyer. Lewisville will pay 1/2 of your down payment and most of your closing cost. They are great to work with. The City of Lewisville will even offer improvement dollars after your house is purchased.

Irving: $10,000 grant will be given to first time homebuyers.

Frisco: Applicant must work within the city limits or be an employee of the city (i.e. police, fire fighter, teacher, or city administration employee.)

Garland: up to $10,000 for first time buyer.

Other cities with grants available: Arlington, Fort Worth

Other cities in Collin County may qualify for the USDA Rural program, which offers 100% financing and allows the seller to pay up to 6% of closing cost. Essentially, you will have to pay very little up-front money. USDA Rural program is one of the best programs available. YOU PAY NO MONTHLY PMI WITH 100% FINANCING.

JENNY'S TIPS: Understand Your Debt-to-Income Ratio

2011-01-24T15:57:00.004-06:00

Your debt-to-income ratio is simply a way of determining how much money is available for your monthly mortgage payment after all your other recurring debt obligations are met.

Debt limit

There is generally a debt limit associated with each type of loan, such as a 38/45 qualifying ratio for a conventional loan. These qualifying ratios are guidelines. An excellent credit history can help you qualify for a mortgage loan even if your debt load is over and above the limit.

Typically conventional loans have a qualifying ratio of 38/45, and FHA loan has 40/50. The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to housing (including loan principal and interest, private mortgage insurance, hazard insurance, property taxes and homeowner's association dues).

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes things like car loans, child support and monthly credit card payments.

For example, with a 28/36 qualifying ratio:
Gross monthly income of $3,500 x .28 = $980 can be applied to housing
Gross monthly income of $3,500 x .36 = $1,260 can be applied to recurring debt plus housing expenses

Remember these are just guidelines. We’d be happy to pre-qualify you to determine how large a mortgage loan you can afford. We look forward to helping you buy your dream home.

Need Down Payment? Check Your 401(K)

2011-01-24T08:58:00.002-06:00

You've finally found the home of your dreams. There's just one thing standing between you and your new house: the down payment.

Many home buyers today opt to use funds from their employer’s 401(K) program to come up with the down payment on a house. Ordinarily, you can't take money from your 401(K) plan unless you retire, leave the company or become disabled, but many company plans permit certain “hardship withdrawals” when there is an immediate and heavy financial need, including the purchase of the employee's principal residence.

The drawback to a hardship withdrawal is that you will pay taxes and penalties on the amount withdrawn from your plan, which often must be paid in the year of withdrawal. And while hardship withdrawals are allowed by law, your employer is not required to provide them in your plan. Check with your employer’s human resources department if you're not sure if your 401(K) plan allows hardship withdrawal.

Another approach may be to borrow against your 401(K) – often as much as 50 percent of your account balance. You pay interest on the loan, but the interest goes back into your account. The money you receive is not taxable as long it is paid back and plans can give you anywhere from five to 30 years to pay back your loan.

There are risks involved in borrowing from your 401(K). If you lose your job or leave your employer, you must pay back the loan in full within a short period, sometimes as little as 60 days. If the money is not paid back in that time, it is considered a withdrawal from your plan and subjected to the same taxes and penalties. And while 401(K) accounts can usually be rolled over into a new employer’s 401(K) without penalties, loans from a 401(K) cannot be rolled over.

In addition, because the funds withdrawn from your account are no longer earning compound interest, your account will be smaller when you retire. And you’ll be replacing pretax money with after-tax money.

Some lenders will count the money you borrowed from your 401(K) as an additional debt that will go along with your car payments, student loans and credit cards. While it may seem unfair since you are borrowing your own money, most lenders view it as a payment obligation that affects your debt-to-income ratio in qualifying for a home loan. It may be a factor in whether you decide to make a hardship withdrawal from your 401(K) and pay tax penalties or borrow against it.

SUCCESS STORY: Home Buyer with Low Credit Score Buys $284,000 House

2011-01-11T22:33:00.004-06:00

A JENNYLOANS.COM SUCCESS STORY
Home Buyer with Weak Credit but Strong Rental History Buys House

One of our clients closed a mortgage loan today, even though his credit score of 619 is 21 points below most lenders' standards. This client is a perfect example of how planning, strategizing, and taking action helped him reached his goal of buying a new home. The process started 3 months ago when I evaluated his income, assets, and credit. They were living in a rental house with $1,400 rent and $400 utility bill. Even with a low credit score, we found several positive traits (lenders would call it "compensating factors"):

-Low debt-to-income ratio

-12 months verifiable rental history through cancelled checks

-401K available for down payment

-Good employment history

With all this considered, he purchased a house for $284,000 and is moving in today! Is your credit good enough to purchase a house? Not every situation is the same, but contact me and we can evaluate your options.

NEW YEAR, NEW HOME! Tips for Buying A New Home in 2011

2011-01-10T21:11:00.003-06:00

If your New Year's Resolution is to buy a new home this year, then you need to follow these five steps to help you qualify for a mortgage.

The past few years have been rocky times for the real estate industry, and most lenders have tightened their lending standards. Is it still possible for most people to own a home? Absolutely! Mortgage and real estate industries are ever changing, especially in today's economy and era of government compliance, but you can prepare yourself with the right information. And get help from a loan officer who understands the new rules.

Many realtors and home buyers often call me and ask how to qualify for a mortgage. Well, the process has changed drastically over the last 2 years. I have to honestly say I am glad for the change in order to bring stability back to the market. We are now back to common sense lending. Getting a mortgage and borrowing a huge amount of money should not be a one day process. Buying a home should be planned. It is not complicated or difficult. It is simply the right planning with help from an expert. So what should a home buyer plan for? Here are the basics:

1. Take the time to talk to a Licensed Mortgage Loan Officer. A 20-minute consultation will map out a good plan of action to help you purchase a new home. A good loan officer should not take more than 1 day to get back with you.

2. Evaluate your credit with a Loan Officer. All lenders have certain fico score requirements. Although most lenders require a minimum 640 fico score, there are some lenders who will accept a score as low as 580 as long as you have a documented rental history. If your score falls below 580, a good loan officer will offer advice in what you need to do to improve your credit score.

3. Evaluate debt-to-income ratio with a Loan Officer. Most lenders can only accept no more than 50% debt-to-income ratio. This means all minimum monthly payments listed on the credit report plus projected new mortgage payment with PITI (principle, interest, taxes and insurance) should not exceed 45% to 50% of your income. Utility bills are not included.

4. Money for down payment. All FHA loans require minimum 3.5% down payment. The money can be from your savings and checking account, 401K, retirement, gift from relatives, and tax refund. The money should be traceable and documented. A good loan officer will evaluate 2 months of recent bank statements and inform you of any red flags.

5. Ask the Loan Officer about all the costs involved in purchasing a home. In most situations, home buyers should plan to pay for the inspection fee, appraisal fee, and earnest money when making an offer. When it comes to home buying, never under-estimate the power of preparation.

Of course not everyone's situation is the same. Self employed business owners are different than W-2 paid employees. You may have spotless credit. Some people have foreclosures on their credit, and others have bankruptcies. Anyone can qualify for a mortgage but planning a strategy and setting a realistic time frame will be different for everyone, so it is very important to work with an experienced loan officer who can help you plan and guide you through the home buying process.

New FHA Lending Standards

2010-03-14T13:25:00.003-05:00

Starting in early summer, the Federal Housing Administration is tightening lending standards in an effort to bolster its dwindling reserves. The new lending standards will make it tougher for some prospective buyers to purchase a home by requiring a higher down payment than the typical 3.5 percent for some borrowers, higher insurance premiums and reduced seller concessions.

Securing FHA-insured mortgages are attractive to borrowers because down payments are only 3.5 percent. Most conventional loans now require 20 percent down, keeping many creditworthy borrowers on the sidelines.

New Guidelines

The new rules — which are temporary and take effect this summer — come after more than a year of stringent standards from lenders. Among them:

Better Credit Score — New borrowers will have to have a minimum credit score of 580 to qualify for a 3.5 percent down payment. Previously, there was no minimum score. Those with lower scores will have to make at least a 10 percent down payment. The average credit score of FHA-insured borrowers is 693.

Higher Insurance Premiums — Buyers who get an FHA-insured loan will soon have to pay a higher initial insurance premium. The new premium will be 2.25 percent of the value of total loan amount, up from 1.75 percent now. A $100,000 mortgage would require a payment of $2,250, or $500 more. But buyers can roll the added cost into the loan amount.

Reduction in Seller Concessions — Starting this summer, sellers will not be able to offer as much help to buyers to pay their closing costs. The maximum amount of assistance will drop to 3 percent of the value of the property, from the current 6 percent.

FHA removes anti-flipping rule

Another FHA rule change could help foreclosure-plagued markets like Las Vegas, Phoenix, Miami, Detroit and Los Angeles, making it easier for investors to “flip” houses to buyers who use FHA-insured loans.Effective Feb. 1, the federal government will waive for one year an FHA anti-flipping rule that prohibits insuring a mortgage on a home owned by the seller for less than 90 days.The new rule lets investors buy today and re-sell as quickly as possible. The move is to allow REO homes purchased by investors to resell as quickly as possible, helping stabilize real estate prices and revitalize neighborhoods after the U.S. housing market collapse.This new rule will open up a new pool of homes to buyers. Waiving the 90-day flip rule is being heralded by many real estate investors as a boon to their ability to buy, rehab and resell foreclosed homes on a more efficient time line.

(Article courtesy of RealtyTrac newsletter)

DEAR JENNY: Should I talk to a mortgage loan officer before I go house hunting?

2010-02-10T09:32:00.003-06:00

Absolutely! Even if you haven't so much as picked out houses to visit yet, it's important to see your mortgage professional first. Why? What can we do for you if you haven't negotiated a price, and don't know how much you want to borrow?

When we pre-qualify you, we help you determine how much of a monthly mortgage payment you can afford, and how much we can loan you. We do this by considering your income and debts, your employment and residence situations, your available funds for down payment and required reserves, and some other things. It's short and to the point, and we keep the paperwork to a minimum.

Once you qualify, we give you what's called a Pre-Qualification Letter (your real estate agent might call it a "pre-qual"), which says that we are working with you to find the best loan to meet your needs and that we're confident you'll qualify for a loan for a certain amount. When you find a house that catches your eye, and you decide to make an offer, being pre-qualified for a mortgage will do a couple of things. First, it lets you know how much you can offer. Your real estate agent will help you decide on an appropriate offer, but being pre-qualified gives you the confidence to know you can follow through. More importantly, to a home seller, they won't have to wonder if they're wasting their time if you don't qualify for a mortgage to finance the amount you're offering for the home. read more

Questions? Contact me today!

JENNY PHUNG
Office: 972-731-0165
Email: jenny@jennyloans.com
Website: http://www.jennyloans.com/

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DEAR JENNY: What documents are required from me to submit a mortgage loan application?

2009-11-06T09:15:00.003-06:00

Here is a list of the information required to consider your loan application.

For all loans

Social Security Number, for borrower and co-borrower if any
Employment History: For the last two years, employment dates, addresses, and salary. Current pay stubs or W-2 forms.
Check and Savings Accounts and Certificates of Deposit: Location of bank accounts, account numbers, and balances; address of bank if out of town; last 3 months' statements.
Stocks, Bonds, and Investment Accounts: Broker's name and address, description of stocks, bonds, etc. Last 3 months' statements or copies of stock certificates.
Life Insurance Policies: Insurance company, policy number, face amount, cash value, if any.
Retirement Plan: Approximate vested interest value. Copy of latest statement.
Automobiles:Make and model of automobiles, their resale value.
Other Assets: Market value of personal and household property.
Liabilities and Other Non-Mortgage Debt: Creditors names, addresses, account numbers. Monthly payments and balances.

Other income information we may need

If you're self-employed: Two years tax returns, profit and loss statements, both company and personal, if separate. Current balance sheet and profit and loss statement if more than two months into the new fiscal year, signed by CPA.
If you have income from: Commission, Overtime, Bonus, Partnership, Rental Property, Trust, Notes Receivable, Interest/Dividends, you'll need two years' personal federal tax returns.
If employed in family business: Personal federal income tax returns and all schedules for the past two years.
If divorced or separated: Complete executed divorce decree and settlement agreement. Payment history of alimony/child support over the past 12 months, if it is a financial obligation. If you choose to have this be considered as part of your income (you don't have to), be prepared to provide 12 months canceled checks or bank statements reflecting income deposits.

If you own real estate

Name and address of all mortgage lenders for the past 24 months, including account numbers, monthly payments, and balances.
If you've sold your home but not closed: A copy of the sales contract.
If you've sold your home, closed, and you will use the proceeds for your new down payment: A copy of the HUD-1 Uniform Settlement Statement.

If you rent

Name, address and phone number of landlords for the past 24 months.

If you're buying a home

Purchase sales contract or offer to purchase and all addenda. Furnish contract with original signatures of buyer and seller.
If a source of your down payment is a gift: Name, address and relationship of donor. Gift funds will be verified in both the donor and recipient's accounts. Note: Not all loan programs allow gifts to be part of your down payment.
For Construction/Perm Loan: Signed construction with cost breakdown, builder plan and specifications.

Senate votes to renew tax credit for first-time home buyers

2009-11-05T13:05:00.002-06:00

The Senate voted Wednesday to renew the government's $8,000 tax credit for first-time home buyers through the first six months of next year as part of a broader bill designed to extend unemployment benefits.
For the first time, the tax credit program would also enable many homeowners who buy a new primary residence to receive a $6,500 refund.
The measure was attached to a bill that would provide 20 weeks of unemployment benefits in more than two dozen states with jobless rates above 8.5 percent and up to 14 weeks elsewhere. Another provision in the bill would allow businesses that had operating losses in 2008 and 2009 to seek refunds for taxes paid on profits over the past five years. read more

My FREE Foreclosure List: Find a great deal posted every week!

2009-11-04T10:53:00.003-06:00

ANNA TX FORECLOSURE: 3/2.5, 1965sf, 2 story, built 2002, $100 down w/FHA, $8000 tax credit for first buyer http://bit.ly/1OOuf7

DALLAS TX FORECLOSURE: Plano schools, 3/2.5, 2142sf, built 2004, $100 down w/FHA, $8000 tax credit for first buyer http://bit.ly/2yup8i

WYLIE TX FORECLOSURE: 4/2.5, 1900sf, 2 story, built 1998, $100 down w/FHA, $8000 tax credit for first time buyer http://bit.ly/4AtCqY

WYLIE TX FORECLOSURE: $91,000, 3/2.5, 1412sf, 2 story, built 2003, $100 down w/FHA, $8000 tax credit for 1st time buyer http://bit.ly/l5Isn

LITTLE ELM TX FORECLOSURE: 3/2.5, 2188sf, large lot, built 1999, $100 down w/FHA, $8000 tax credit for first time buyer http://bit.ly/48yhC9

LITTLE ELM TX FORECLOSURE: Frisco schools, 3/2, 1874sf, built 2001, $100 down w/FHA, $8000 tax credit for 1st time buyer http://bit.ly/2XGpP

LITTLE ELM TX FORECLOSURE: Frisco schools, 5/2.5, 3499sf, built 2005, $100 down w/FHA, $8000 tax credit for 1st time buyer http://bit.ly/2Tjn62

Questions? Contact me today!

JENNY PHUNG
Office: 972-731-0165
Email: jenny@jennyloans.com
Website: http://www.jennyloans.com/

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Senate Close to Deal Replacing Homebuyer Tax Credit

2009-10-28T10:47:00.002-05:00

U.S. Senate leaders moved closer to an agreement replacing an expiring $8,000 tax credit for first- time homebuyers with a smaller one that would expand access to so-called step-up purchasers, two people familiar with the matter said.

The deal would reduce the size of the tax credit to 10 percent of the sale’s price, capped at $7,290, the people said. The credit would be available on home purchases that are under contract by April 30, and borrowers would have 60 days more to close the sale. The existing credit is due to end Nov. 30. read more

My FREE Foreclosure List: Find a great deal posted every week!

2009-10-28T10:26:00.003-05:00

LITTLE ELM TX FORECLOSURE: GAMEROOM, 4/2.5, 2317sf, built 1999, $100 down w/FHA, $8000 tax credit for 1st time buyer http://bit.ly/1IfOtm

LITTLE ELM TX FORECLOSURE: INGROUND POOL, 3/2, 1854sf, built 2002, $100 down w/FHA, $8000 tax credit for 1st time buyer http://bit.ly/3VFp8J

LITTLE ELM TX FORECLOSURE: 3/2, 1870sf, built 2002, near shopping, $100 down w/FHA, $8000 tax credit for 1st time buyer http://bit.ly/3ujkKv

LITTLE ELM TX FORECLOSURE: 3/2, 1868sf, built 2002, garden tub, $100 down w/ FHA, $8000 tax credit for 1st time buyer http://bit.ly/1vyAEY

LITTLE ELM TX FORECLOSURE: FRISCO ISD, 3/2, 1783sf, built 2001, $100 down w/ FHA, $8000 tax credit for 1st time buyer http://bit.ly/3tM4US

McKINNEY TX FORECLOSURE: HUGE 5/2.5, 2 story, 2748sf, built 1998, $100 down w/ FHA, $8000 tax credit for 1st time buyer http://bit.ly/WxwFi 33 minutes ago

McKINNEY TX FORECLOSURE: ONLY $83,000! 3/2, 1408sf, built 2005, $100 down w/ FHA, $8000 tax credit for 1st time buyer http://bit.ly/23NaBU

Questions? Contact me today!

JENNY PHUNG
Office: 972-731-0165
Email: jenny@jennyloans.com
Website: http://www.jennyloans.com/

FOLLOW ME:
Blog: http://jennyloans.blogspot.com/
Twitter: http://twitter.com/jennyloans

My FREE Foreclosure List: Find a great deal posted every week!

2009-10-21T11:03:00.004-05:00

McKINNEY TX FORCLOSURE: JUST REDUCED $176,400, 3/2, 1817sf, $100 down w/FHA, $8000 tax credit for 1st time buyer http://tinyurl.com/yk978ay

McKINNEY TX FORECLOSURE: 4/3.5, 2 story, 3179sf, 2005, $100 down w/FHA finance, $8000 tax credit-1st-time buyer, http://tinyurl.com/ylcfasy

FRISCO TX FORECLOSURE: 3/2.5 Townhome, 1922sf, 2005, $100 down w/FHA finance, $8000 tax credit for 1st-time buyer http://tinyurl.com/ygja6gk

McKINNEY TX FORECLOSURE: 3/2, 2121sf, built 2002, $100 down w/ FHA financing, $8000 tax credit for 1st-time buyer http://tinyurl.com/yffmbny

FRISCO TX FORECLOSURE: 3/2, 1896sf, built 2001, $100 down FHA financing, $8000 tax credit for first-time buyers, http://tinyurl.com/ygs5lsl

Questions? Contact me today!

JENNY PHUNG
Office: 972-731-0165
Email: jenny@jennyloans.com
Website: http://www.jennyloans.com/

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How to Qualify for the $8,000 Tax Credit

2009-09-18T09:16:00.002-05:00

Here are some general guidelines to qualify for the $8,000 Tax Credit:

Eligible Property: Any single-family residence (including condos, co-ops, and townhouses). All principal residences are eligible.

Refundable?: Yes. Reduces (or can eliminate) income tax liability for the year of purchase. Any unused amount of the tax credit will be refunded to the purchaser.

Income Limit: Full amount of credit available for individuals with adjusted gross income of no more than $75,000 ($150,000 on a joint return). Phases out above those caps ($95,000 and $170,000).

First-time Homebuyer Only: Purchaser (and purchaser’s spouse) may not have owned a principal residence in the 3 years prior to purchase date.

Revenue Bond Financing: Purchasers who utilize revenue bond financing can use credit.

Repayment: No repayment for purchases on or after January 1, 2009 and before December 1, 2009.

Questions? Contact Jenny Phung at 972-731-0165, email jenny@jennyloans.com, or visit my website at http://www.jennyloans.com/.

What to know before you go house hunting

2009-09-14T09:13:00.005-05:00

Would it surprise you to know that your Realtor would prefer to work with clients who have their pre-qualified letters ready rather than working with clients who don't? As a Realtor, it is his or her responsibility to find the perfect house for you no matter how many miles they have driven, how much money spent on gas, and how much time invested into finding you that dream home. So before you start house hunting, here are some financial tips to make sure you're ready to get a mortgage:

1. Make a chart of your current income and expenses. How much can you budget for your mortgage payment every month with principle, interest, taxes and insurance (PITI)?

2. To ensure your loan gets approved, your mortgage should be no more than 38% of your gross income (NOT NET AFTER TAX DEDUCTION), and your total monthly mortgage payment plus all payments based on your current debt should not exceed 48% of your gross income (do not include your utilities). And a smart tip: just because you can get approved for more than your budget doesn't mean you should try to buy more.

3. Be prepared to explain any length of time when you were unemployed.

4. Know your credit. You can get a free credit report once per year for free. Go to http://www.annualcreditreport.com/ and get yourself a free credit report. If you have many delinquencies on your credit report in last 12 months, then it may be difficult for you to get an approval.

5. How much money do you have in reserves? The minimum FHA mortgage requires 3.5% down payment from the sales price. The USDA Rural program does not require any down payment, but you should still have some money in savings. The more reserves you have, the better off you are in dealing with life's many unexpected events.

6. The most important tip is to work with a licensed loan officer/mortgage consultant before you start looking for your new house. They can assess your financial situation and if you're ready, provide a pre-qualification letter that your Realtor will need. You should consider working with someone who has many years of experience, knows and understands underwriting guidelines, and most of all, is dependable and there when you need them. They answer the phone or get back with you within a reasonable amount of time. You should never have to chase down your loan officer.

As a first-time home buyer, there are many uncertainties that lie ahead. You should be able to rely on your Realtor and your mortgage consultant to help you every step of the way.

Don't forget about taking advantage of the $8,000 tax credit for first-time home buyers, including buyers who have not owned property in last 3 years, that gives you cash in your pocket. This program is set to expire November 30, 2009... so ACT NOW!

Questions? Contact Jenny Phung at 972-731-0165, email jenny@jennyloans.com, or visit my website at http://www.jennyloans.com/.