When You Need to Use the Equity in Your Home…


Real estate agent holding a model house on a blue background.

When You Need to Use the Equity in Your Home…

When you need to exchange the equity in your home for cash, and assuming you have the income and the credit to obtain a new loan, you have three choices: A cash-out refinance, a Home Equity Loan or a Home Equity Line of Credit.

Assuming that you’d rather not refinance your entire home mortgage loan, you’ll probably choose to merely pull out the equity with a new, smaller loan.

First, the Home Equity Loan.

These carry lower interest rates than personal loans or credit cards, and the interest rates are fixed. That means you’ll get a loan for a set period of time with a predictable payment each month.

The most common reasons for obtaining a home equity loan are to pay for home improvements, to make a down payment on a second home or an investment property, to pay college costs when student loans are not available, or to consolidate debt. Using the cash to pay off high-interest credit cards and personal loans allows the borrower to pay down debt sooner, since less money will be going to interest payments each month.

Some, unfortunately, use the cash to fund a vacation or buy expensive toys – something no financial advisor would ever recommend.

A Home Equity Line of Credit (HELOC) is slightly different.

This loan acts like a secured credit card. In fact, if you choose a HELOC, you’ll even get a “credit card” to give you easy access to your money.

You have a set limit on how much you can borrow, and you pay interest only on the amount you owe each month. In most cases the interest rate will also be variable, so your minimum monthly payment can vary from month to month. Some lenders offer low introductory rates on HELOCs, after which the interest rate and monthly minimum payment can rise dramatically.

You can borrow the entire loan limit at the outset, or you can wait and take money out a little at a time or in a later lump sum. Most HELOCs have a loan term of from 5 to 20 years, after which payment in full is due.

Qualifying is similar for both loans.

You’ll need a sufficient amount of equity, a credit score in the upper 600’s or higher, and an adequate debt to income ratio.

Most lenders will allow you to borrow 80% of your home’s equity, and some will allow 90%. For example, if your house is worth $300,000 and you owe $200,000, you have $100,000 in equity. Most lenders will allow you to borrow $80,000, while some will lend $90,000.

As with all loans, the higher your credit score, the lower the interest rate you’ll be required to pay.

Different lenders have different requirements for debt to income, but in general, it should not exceed 43% of your gross monthly income.

What is a debt-to-income ratio? This is a simple equation in which you divide your monthly debt obligations by your monthly income. $1,000 in monthly debt divided by $3,000 in monthly income yields a 33% debt to income ratio.

Should you choose a Home Equity Loan or a Home Equity Line of Credit?

A Home Equity Loan is the right choice if you know how much you want to borrow from the outset and prefer the security of a fixed interest rate and a set monthly payment.  Since interest rates are rising slightly, this is a huge benefit for many.

A HELOC may be better if you’re unsure about the amount needed – as when starting a home remodeling project.

A home equity loan can also give you income tax benefits. Under the Tax Cuts and Jobs Act, you can deduct the interest paid on (combined) loans of up to $750,000 for a married couple of $375,000 for an individual as long as the money was used to buy or improve a first or second residence.

A home equity loan can be a good thing – as long as the money is used wisely.

The question to ask yourself is whether spending the money you’ll take out of your home’s equity will give you a long term benefit.

If the answer is yes, then give us a call at Homewood Mortgage – the Mike Clover Group. We’ll be pleased go over the numbers with you and show you your options.

Call today: 800-223-7409



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Should you consider recasting rather than refinancing your mortgage?


Shot of a mature couple using a digital tablet while going through paperwork at home


Have you come into a nice sum of money that you plan on using to reduce the balance on your home mortgage? If so, you have three choices.

  • You can make a lump sum payment on your current mortgage
  • You can refinance into a new mortgage
  • You can recast your current mortgage

What’s the difference between these options?

Making a lump sum payment is simplest. You don’t have to do a thing except increase the amount of the check when you make your next payment.

The result will be that you’ll pay less in interest because your monthly balance will be less. Since your payments will remain the same and you now owe less, you’ll also take time off the end of your mortgage.

Refinancing your mortgage entails going back to your lender and getting an entirely new loan.

With this option you can reduce the number of years remaining on your loan – or you can increase them. If you have 25 years remaining on a 30-year loan, you might choose to refinance for a new 30-year period. Between that and the lower loan balance, your payments will be significantly reduced.

Recasting your mortgage is a simple process. You simply pay a small fee to the bank, make your lump sum payment, and the bank will re-calculate your payments based on the lower loan balance. For instance, lets assume that you’re making payments on a $200,000 loan at 4.5% interest. Your principal and interest payments on a 30-year loan will be $1,013. If you recast that mortgage and reduce the loan balance by $20,000, your new payment will be $912.03.

Here at Homewood Mortgage, the recast fee is $150 and the minimum lump sum payment is $12,000. Borrowers may only exercise this option once during the life of the loan.

Which option is best for you?

Making a lump sum payment is something you can do at any time. You might choose to increase your payments each year when you get a tax refund or an annual bonus. Many homeowners choose to simply add a few dollars each month to bring the balance down faster.

This option has no effect on your monthly payment, but it reduces the term of your mortgage, and thus the number of dollars you’ll pay in interest over time.

Refinancing your mortgage is the most expensive option and takes the most time. You’ll need a new appraisal and you’ll pay the standard loan fees. You’ll also be required to re-qualify based on your current income, obligations, and credit scores. However, it can be beneficial if you can refinance at a significantly lower interest rate.

To decide if this is a good option, compare the cost of the new loan, which could be upwards of $4,500, to the amount you’ll save each month. Generally, this is only a good idea if you plan to stay in the house for at least 5 more years.

Recasting a mortgage is easier, since you don’t have to qualify, no appraisal is required, and the fee is low.

However, there are drawbacks. First, recasting is  possible only with a conventional loan. FHA and VA loans are not eligible. Next, not all banks offer recasting, and you must have a large lump sum with which to reduce the principal balance.

Recasting might be a good idea if current interest rates are higher than the rate you’re paying, because nothing about your mortgage loan changes except the balance and the monthly payment. You’ll keep the same loan term and interest rate.

To decide if it’s right for you, weigh the benefits of having a lower monthly mortgage payment against having a large sum of liquid cash at your disposal.

If you’re interested in refinancing or recasting your current mortgage loan, give us a call at Homewood Mortgage, the Mike Clover Group. We’ll be glad to show you what each option will cost, show you the new payment amount with each option, and help you compare the numbers to decide which Is best for you.



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Buying that Beautiful Home Could Make you “House Rich and Cash Poor”



Becoming house rich and cash poor is an uncomfortable, financially dangerous position. It means your financial worth is tied up in your house, leaving very little in your bank account.

It also means that should a financial crisis occur, you might not have the liquid assets to weather the storm.

What does “House rich and cash poor” look like?

  • You have less than six months’ worth of cash tucked away to cover monthly expenses should you become ill or injured.
  • You have no reserves put away for home maintenance and repairs.
  • Your ongoing monthly expenses exceed 40% of your monthly income. (30% or less should be the goal.)
  • The equity in your home is more than 80% of your total net worth.

Being house rich and cash poor can also affect the quality of your life.

When all of your energies go toward paying the monthly mortgage payment and staying current with taxes, HOA fees, utility bills, etc. it takes the fun out of living in a nice home.

Living in a beautiful home is wonderful, but most people enjoy getting away for a vacation now and then. If all your money is tied up in paying for the house, that’s probably not an option. Even a concert, a ball game, or dinner at a nice restaurant may be out of your reach.

Even though it isn’t wise, many homeowners today are in this situation.

Think of the first time buyers who saved money for a down payment, then hurried to purchase a home as soon as they had the 5% to 20% their lender required. They had nothing left in the bank when the purchase closed.

Some have traded up to their dream home. They built good equity in their first home, sold it, then spent all the cash as the down payment on the new home. Again, they had nothing left for unexpected expenses.

In the first scenario, the buyers have simply jumped the gun. They should have waited until they had enough put away to cover the down payment and a reserve fund.

The move-up buyers had the cash and chose to put all of it down on the house – again leaving themselves in a shaky financial position.

How you can avoid becoming House Rich and Cash Poor.

First, understand your own finances before you consider buying a home. Put your numbers down on paper so you can see them clearly.

  • The cash you have now
  • Your monthly income
  • Your monthly fixed expenses

But don’t stop there. In addition to what you must spend each month, consider what you WANT to spend each month or each year.

Your lender will look at your income and expenses to determine how much you can afford as a monthly payment, but you should not take that number and run with it. Instead you should calculate how much you want to spend on entertainment, recreation, eating out, and even that morning coffee. Then you should consider vacations. Is it important to you to visit out-of-state family each year? Will you feel deprived if you can’t go to the mountains or the beach for a week every summer?

Put those dollars in your proposed budget because they are important. If owning your new home prevents you from enjoying your favorite activities, you won’t love it for long.

You might also consider purchasing a home warranty. This could add approximately $50 per month to your expenses, but would well be worth it if it saves you from a sudden repair expense in the thousands. You may even be able to get the seller to pay for the first year. Discuss this with your agent and do compare warranty offerings before choosing one.

Before you begin to shop for that new home: Talk to your lender about how much you can spend when the “want to” expenses are added to the “have to” expenses.

Keep saving… Putting one year’s worth of recurring monthly expenses in the bank will give you peace of mind.

When you’re ready to talk with a lender, call the Mike Clover Group at Homewood Mortgage. We’ll be happy to get you pre-approved for a home loan – and happy to help you decide not just what you can spend on a house, but what you should spend, based on your preferred lifestyle.

We’re known for fast, friendly service, trouble-free closings, and the lowest rates and fees available anywhere in Texas.


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Is the Dallas Real Estate Market in Trouble?


Dallas, Texas


A recent headline in the Dallas News proclaimed: “Homebuyer interest is cooling off, Realtors’ top economist says.”

That does make it sound like trouble, but in some ways “cooling off” is good news, not bad news. For a few years we’ve had double-digit price gains, and as we saw when home prices rose by about 50% from 2000 to 2005, that can lead to trouble.

Now home prices are increasing at a more traditional rate of about 5%.

We’re simply in a period of adjustment. The number of homes sold per month has slowed, but here in Dallas – Fort Worth we’re still selling more houses than in years past.

What’s causing this slow-down? Economists suggest that increasing interest rates may be a factor. While 30-year fixed rate mortgages are still hovering around 4.7, many buyers had come to expect less and still hold out hope that rates will drop. Unfortunately for them, it appears that the bottom has come and gone – the expectation is that mortgage interest rates will rise to 5.5 by late 2019.

Should this be a worry? It’s a concern, but as we’ve seen over the decades, homebuyers’ expectations will adjust. As difficult as it is to envision today, during the 1980’s, people paid 10, 12 and even 16% interest for home mortgage loans. The fact is, there will always be those who prefer owning to renting. And of course, as interest rates rise, rental rates will also rise.

Another factor might be buyer fatigue. Many homebuyers have placed multiple offers on homes and have been outbid. Others have been unable to qualify for the homes they want and are unwilling to “settle” for a home at a lower price.

Lawrence Yun, economist for the National Association of Realtors was quoted as saying that sales have slowed slightly across the country. He also mentioned that home buyers “…are frustrated abut a lack of inventory,” but noted that the number of homes for sale in North Texas is growing, and that Texas has one of the most solid home markets in the country.

Why is Texas doing so well? We can thank the economy and the strong job market.

Texas is leading the country in terms of job growth. Dallas-Forth Worth has created more new jobs in the past 5 years than any other major metropolitan area in the U.S.

That, of course, is good news for the housing market in Texas. As long as there are jobs to be had, the population will grow, and every one of those workers needs a roof over his or her head. The other bit of good news is that in spite of rising prices, ours is still one of the most affordable markets in the country.

We may see a temporary lull in the housing market, but no, the Texas real estate market is not in trouble.

If you’re ready to find your new home in Texas, get in touch with Homewood Mortgage, the Mike Clover Group. We’re known for fast, friendly service, trouble-free closings, and the lowest rates and fees available anywhere in Texas.

We’d be pleased to get you pre-approved so you can begin that Texas home search with confidence.


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Mortgage Fraud is a Serious Offense – Could YOU be Guilty?


"Mortgage application form with a calculator, pen and globe"

Mortgage Fraud is a growing concern for law enforcement, as it climbed 12.4% year over year in the second quarter of 2018. CoreLogic reported that about one of every 109 mortgage applications now contains some kind of false or misleading information.

Considering that the punishment can result in up to 30 years in federal prison and up to $1 million in fines, this is a staggering revelation.

Mortgage fraud may be for profit or for housing, but either way it is illegal.

The most severe penalties go to executives who securitized mortgage-backed investments, real estate practitioners, and loan officers who encouraged or helped perpetuate fraud. However, home buyers who engage in fraud either willingly or without their knowledge, also put themselves in danger of prosecution.

How can a home buyer engage in mortgage fraud?

This is a valid question, since lenders scrutinize a borrower’s credit, employment, bank accounts, etc. before granting a loan.

The 6 most common types of mortgage fraud perpetrated by consumers are:

  • Income fraud
  • Failure to disclose debt
  • Occupancy fraud
  • Transaction fraud
  • Property fraud
  • Identity fraud

As you might assume, some types of fraud rely on cooperation from other individuals. In some cases, more than one type of fraud is perpetuated.

For instance, to commit Income Fraud, someone else must verify income that doesn’t exist. Some borrowers do create bogus self-employment information, but this requires an investment of time and money as well as deceit. Lenders typically want to see 2 years of income tax returns to verify self-employment income.

Occupancy fraud is easier, as the borrower simply needs to state that this will be a primary or secondary residence. If borrowing for investment property, he might need cooperation from someone who is willing to sign a fraudulent lease agreement. Occupancy fraud could also involve the use of a “Straw man” buyer.

Undisclosed debt could be in the form of a personal note between friends, relatives, or the borrower and seller or real estate agent. It could also be an unreported real estate transaction between private parties. Private lenders don’t often pay the fees to report to the credit bureaus.

Transaction fraud could include anything from an undisclosed agreement between the parties, a non-arms-length transaction, use of a straw buyer, or falsified down payments. A personal loan for the down payment, for instance, might be disguised as the legitimate sale of personal property.

Property fraud involves misrepresenting information about the property or its value. While this might be made more difficult since appraisers are chosen at random by the lender, it would not prevent an apartment owner from falsifying rental income in order to make the property more attractive to a lender.

Identity fraud occurs when an applicant uses a false identity or alters his or her identity or credit history.

Considering the inventiveness shown by those perpetuating scams, these are but a few of the ways that borrowers and professionals involved in the real estate industry can commit fraud. To see a partial list of cases that resulted in Federal charges/penalties, visit https://www.fbi.gov/investigate/white-collar-crime/mortgage-fraud/financial-institutionmortgage-fraud-news.

Avoiding mortgage fraud may seem simple – all you have to do is tell the truth on your loan application. However, some borrowers have been led into fraud by real estate agents or loan officers who assured them that it was fine to lie a little. For instance, they might be encouraged to state that they gave the agent cash earnest money to be applied to the loan, when in fact it was a promissory note.

Some borrowers have been involved without their knowledge. How? By failing to carefully read the documents they signed and failing to make sure that every blank was filled out – and filled out accurately.

When you want to purchase or refinance a home, call on the Mike Clover Group at Homewood Mortgage. We’ll get you pre-approved using honest numbers, so you need never fear being caught in mortgage fraud.

We’re known in Texas for our sterling reputation, friendly service, low fees, and fast closings, so get in touch today.


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If You Need a Co-signer: Things to Consider


Couple getting financial advice

You may have the ability to make monthly mortgage payments, but lack the ability to prove it to a lender. If so, you might consider getting a co-signer to enable you to get a mortgage loan.

When you purchase a home to live in, you become an “occupying borrower.” In some cases a co-signer may be someone (such as a parent or child) who will live with you, but won’t be listed on the deed as an owner of the home. However, in most cases, a co-signer is a relative or friend who co-signs for the loan, but does not reside in the home.

Regardless of residency, both parties become co-credit applicants, and both take on the financial responsibility for making payments on the mortgage loan.

Co-signers and the debt-to-income ratios.

As you may know, your mortgage approval is determined in part by your debt-to-income ratio, or DTI. This is a comparison between the money you have coming in and the money you must spend each month to pay your debts, including car loans, student loans, credit card payments, child support payments, and your mortgage payment.

When you have a co-signer, the ratio will be applied to both of you, and the results will be blended. It will be no benefit to you to choose a co-signer with high debts relative to his or her income.

Co-signers and credit ratings.

Even if your co-signer has a large income and little debt, if his or her credit scores are low, it won’t be much help. Remember that when two or more people purchase a home, the bank typically looks most closely at the borrower with the lowest credit score.

The risk to the co-signer

This should be obvious…when you co-sign a loan, you take responsibility for the payments on that loan.

If something happens to the occupying borrower and he or she cannot or does not make the mortgage payments, the burden will fall on the co-signer. If you have a co-signer and fall behind on your loan, your credit score and your co-signer’s credit score will suffer equally.

The risks to you as the occupying borrower

Unfortunately, there are those who would co-sign your loan only to profit by your purchase. Think of the home seller or the builder/flipper/developer. Even more unfortunately, these are sometimes people who not only expect you to fail in making payments, but hope that you do, because they can pay off the loan, assume ownership, and sell the house yet again.

The best idea might be to wait just a bit…

Tighten your belt, pinch those pennies, pay every obligation on time, and get yourself in a position where you not only have a good down payment, but a credit score that will afford you the best interest rates available. Then choose a house with payments that fit comfortably within your monthly budget.


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Planning to Buy a Home: Do You Know Your Debt-to-Income Ratio?


Young couple having bills to pay.

When you’re planning to buy a home, one of the factors that will determine whether or not you’ll be approved for a Texas home mortgage loan is your debt-to-income ratio (DTI).

What is a DTI, and how is it determined?

This is the number that reveals what percentage of your monthly income goes directly to pay debts, before you begin paying for other necessities such as food, clothing, fuel for your vehicle, etc.

To calculate that number, you simply divide your monthly debt by your monthly income. Not surprisingly, a monthly mortgage payment will probably be the largest item in the debt column.

As an example: If your monthly income is $6,000 and your monthly debt is $2,000, you have a 33% debt to income ratio. ($2,000 divided by $6,000.)

On the debt side, list all of your monthly debts, including credit card payments, installment payments such as the monthly payment on your car, student loans, alimony, and child support payments. When calculating credit card payments, use the monthly minimum, even though you may be paying more in an effort to eliminate debt.

Since you don’t yet have a mortgage payment, your lender will first calculate your DTI without the mortgage payment. Then he or she will do a second calculation using the projected payment on your new mortgage loan, including taxes, homeowners insurance, and mortgage insurance.

Your credit report will show most of the debt you owe, but you may also be asked to show credit card statements or installment contracts. Do NOT acquire any new debt once your lender has calculated your DTI. Your credit report will be checked again just prior to closing, and new debt will either cause your interest rate to rise or cause the loan to be denied.

On the income side, list your wages or salary and any verifiable income from part-time jobs, self-employment ventures, alimony, and income producing assets such as real estate or stocks.

To verify income, your lender will need to see recent pay stubs and W-2 forms for the past two years from all of your employers. To verify self-employment income and income from assets, you’ll need to show tax returns and bank or brokerage statements. You may also need rental agreements.

Debt-to-income ratios are calculated on your pre-tax income, not the actual dollars that go into your pocket.

The lower your DTI, the better your lender will like it.

Why? Because the Consumer Financial Protection Bureau says that consumers with high debt to income ratios are the most likely to fall behind on mortgage payments or lose their homes to foreclosure. A prolonged illness or accident that prevents work can spell financial disaster.

Low debt-to-income ratios say you can probably keep making your mortgage payments even if your income takes an unexpected drop.

Of course the risk is tied to the income. Consider that at 50% debt-to-income, a person earning $15,000 per month has considerably more disposable income after debt service ($7,500) than a person earning $5,000 ($2,500).

What is an acceptable debt-to-income ratio? Some lenders quote 36%. Others say 43% is the cut-off point.

Here at Homewood Mortgage, the Mike Clover Group, we don’t have a cap on DTI.  Whatever the software will accept, via Freddie Mac and Fannie Mae, we will do. We typically see Texas home loans getting approved up to a 50% debt to income.

Before you begin shopping for a home, contact us at the Mike Clover Group. We’ll help you get pre-qualified so you can make a solid offer on that Texas home.

We’re known all over Texas for our friendly service, low fees, and fast closings, so get in touch today.



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4 Steps to a successful Texas home mortgage loan


House Drawing on Chalkboard

In spite of what the ads promise, getting a home mortgage loan is not as simple as clicking a mouse or making a quick phone call. And no, it can’t be done in one day.

Step #1: Become pre-approved for your mortgage loan before you go shopping.

When you want to purchase a home in Texas (or anywhere else) the first step is to become pre-approved for your mortgage loan. Note that I didn’t say “pre-qualified.” They are two different things, and only the pre-approval has meaning.

A pre-approval is an actual commitment from a mortgage lender to fund your home purchase up to a set limit. It is also your shopping guideline and will save you from the heartbreak of falling in love with a house you cannot buy.

This commitment will remain in place as long as your financial status doesn’t change between the time of the approval and the closing on your home purchase, and this will depend on the type of loan you need or decide to get.  For example with the bridging loans are designed to help people complete the purchase of a property before selling their existing home by offering them short term access to money at a high rate of interest. So A great supplier of bridging loans are businesses as banks and building societies that can lend in a financial crisis, there has been an influx of bridging lenders into the market, and if you decide to take one out you could face costs of up to 1.5% a month meaning 18% a year.

In order to become pre-approved, you’ll have to provide your lender with:

  • Two years of federal tax returns
  • Two years of W-2 forms from your employer
  • Pay stubs from the past 30 days, showing your year to date income
  • 60 days or a quarterly statement of all your asset accounts. This would include checking and savings accounts, investment accounts, stocks, and bonds.
  • Information on all real estate you currently own.
  • Residential history for the past two years: proof of mortgage payments made or rental receipts and landlord contact information.
  • Proof of down payment funds.
  • Information regarding your financial obligations.

The lender will also access your credit history and learn your credit scores.

Step #2: Find a home, get an offer accepted, and pass the home appraisal.

Before a lender will agree to finance your home purchase, they’ll want to be assured that the house is actually worth what you’ve agreed to pay. The house will serve as collateral for your loan, so they want to know that they can re-sell it for enough to cover the loan should you default on payments.Výsledek obrázku pro loan

Your lender will order the appraisal, which will hopefully come in at or above the selling price. If it comes in high, that’s wonderful! You’ll be gaining instant equity.

If it comes in low, you have 5 choices:

  • You can negotiate with the seller to lower the price down to meet the appraisal.
  • You can make up the difference in cash out of your own pocket.
  • You can appeal the appraisal. Perhaps your agent or the listing agent can provide the appraiser with newer or better comparable market data, which would justify the price you’ve agreed to. If you file an appeal, the appraiser will be obligated to take another look. Do be warned – appraisers don’t appreciate having their judgement questioned.
  • You can order a second appraisal. If the initial appraiser isn’t willing to adjust the outcome, but you and the agents involved think the price is right, you can get a second opinion. It may be that your first appraiser was prejudiced about the neighborhood, just didn’t like the house, or was non-local and really didn’t know the comparables. The problem with getting a second appraisal: You’ll have to pay for it a second time.
  • You can walk away. Maybe you’ve come to agree with the appraiser and the sellers aren’t willing to lower the price. If so, it’s time to start over.

Step #3: Get through underwriting – Do nothing to alter your credit score or your financial position as you wait for your purchase to close.

I can’t tell you how many prospective home buyers have destroyed their chance at home ownership by doing something foolish at this time.

They seem to think that an approval is a one-time thing. It is not.

In fact, your credit score will be checked again just prior to closing. If you’ve done anything to change it, one of two things will happen:

  • Your interest rate will change
  • Your loan will be denied

With this in mind:

Don’t open any new credit accounts or even let a retailer check your credit scores. Don’t make any large purchases that have to be financed. Remember that your scores are based in part on how  much credit you’re using.

Don’t close old credit accounts. Again, your scores reflect how much of your available credit you’re using. 30% of less is good. If you have unused credit cards, they increase the credit available. If you close them, your debt to credit utilization will increase – making you appear to be a greater risk.

Do make every payment on time. Even one late payment can reduce your credit score dramatically. Don’t let it happen!

The underwriter will also review the appraisal to make sure it does match the loan you’re requesting, and he or she may contact your employer to verify that you are still working at the job and at the income you’ve listed on your loan application. Some will also re-verify the bank balances you had when you were pre-approved.

In other words – your pre-approval will only stand if you have not done anything foolish prior to closing.

Step #4: Carefully review the closing disclosure form

By law, your lender must provide you with a closing disclosure at least three business days prior to closing. This is a follow-up to the good faith estimate you received upon application.

The closing disclosure outlines the financial details of your home purchase, so you need to make sure that everything is correct and “as promised.” A REALTOR® Association survey revealed that approximately 50% of agents have found errors on closing disclosures, so take this responsibility seriously.

With your good-faith estimate in hand, sit down with your agent and compare it to the closing disclosure. Check and triple-check that the following are accurate:

  • Your name(s). Are they spelled correctly? Are they consistent throughout all documents – as in, did you use a middle name in one place and a middle initial in another?
  • The loan type. Is it fixed rate or adjustable? If adjustable, is the adjustment period correct?
  • The loan term. Is it 15 years, 30 years, or something else?
  • The interest rate. Is this the rate you were quoted?
  • Cash required to close – are the down payment and your share of closing costs accurate?
  • The loan amount. Do the numbers add up?
  • Estimated monthly payment.
  • Estimated taxes, insurance, mortgage insurance, etc.

If you find an inaccuracy in any of these, contact your lender immediately. Remember that once the errors are corrected, the clock will re-set and you’ll have to wait 3 more days to close. If you were only 3 days out from closing, your agent will need to contact the seller’s agent to get a closing date extension.

Are you ready for that pre-approval?

If so, and if you’re planning to buy anywhere in the great state of Texas, we at Homewood Mortgage, the Mike Clover Group, would love to help you. Besides, private money loan programs New York can offer various solutions to support you in your attempt to take a loan.

We’re known in Texas for our friendly service, low fees, and fast closings, so get in touch today.

Call today: 800-223-7409




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Which is smarter – to buy or build a house?


Young couple sitting on floor looking up while dreaming their new home and furnishing.


Should you buy an existing home, buy a newly constructed home, or have a custom home built?

The relative purchase price of each is one consideration – but only one. And the purchase price is only one piece of the price puzzle.

After doing a bit of research on homeadvisor.com, Realtor.com, Zillow, and others, we find that nationwide, the average price of a newly constructed home in June 2018 was $316,500, while an existing home was only $279,300, we are thankful for the brisbanepropertyvaluations.com.au team because these are who completed our registered house valuation last year.

That doesn’t tell you if the houses were similar in size, so upon looking a little further, we learned that the median price per square foot for an existing house in the U.S. was $123, while the median cost of a newly constructed home was $150.

Naturally, the numbers vary from one location to another. You could purchase an existing home in Detroit for as little as $24 per square foot, while the median in San Francisco was $810. New construction will also vary a great deal, since the price of a building lot will vary based on location, size, etc. Labor costs and permit fees also vary widely from region to region.Top of Form

So far, it appears that buying an existing home is less expensive, but what about maintenance and repairs?

Will your newly purchased existing home need improvements right away?

  • Will you be happy to move in without repainting the walls, installing new flooring, or revamping the kitchen or bathroom?
  • Will the roof need attention within a few years?
  • How about the heating and air conditioning systems?
  • How old is the water heater?

If you purchase a newly constructed home or have a home custom built, you’ll have a contractor’s warranty to fall back on if any of the newly installed systems are faulty. Some builders offer a 10-year warranty on their new construction.

Yes, you can buy a home warranty for your “used” house, but the operative word is “buy” and you’ll still have to pay a deductible.

What about alterations?

Few houses are a perfect fit. Will you need to make changes to the existing home you buy? Maybe you’ll want to remove a wall to open up a space. Maybe you’ll want to add a bathroom or a deck.

Most new houses today are built with Internet use in mind. If you purchase a home built 30 or 40 years ago, will it have the electrical outlets you want and need? Will it have the cable connections? Or –  will you be hiring an electrician?

All the changes you make will add to the cost of your home.

Think about the ongoing costs of ownership.

Depending upon the age of the pre-owned home you buy, you may end up paying more in heating and cooling costs. New homes are built for greater energy efficiency, from the insulation, to the type of windows, to the heating and air conditioning units. Here you can find information about Start and Run HVAC Capacitors regarding energy efficient air conditioners that are trending.

Another important aspect to consider, is if your older home came with appliances, they too are apt to be less energy efficient than the appliances you’ll buy for a new home. One survey reported that homes built after 2000 consume 21% less energy than older homes.


One advantage of purchasing an older home is that the landscaping is probably mature. It may have an established lawn and attractive shrubbery, along with trees for protection from the sun and wind.  The U.S. Forest service estimates that strategically placed mature trees can save up to 56% on air conditioning costs.

Of course, if you buy your own building lot and have a home built, you can instruct the builders to leave a few well-placed trees, but you’ll still have to deal with installing a lawn and other plantings.

The Stress Factor

Most of us think we’d like to design and build our own home, but it isn’t for everyone. Simply getting two or more family members to agree on a floor plan can be stressful. After that come a myriad of other decisions: the flooring, the counter-tops, the fixtures, the appliances, and even the paint colors can be up for debate – and argument.

One more benefit of purchasing an existing home: You can have it right away.

Whether you choose a builder’s plan or contract to have a custom home built, you’ll be waiting a few months before your new home will be move-in ready. It may be worth the wait, but it is definitely a factor to consider.

If you decide to have a home built… Choose carefully.

First, choose a building contractor who comes highly recommended – even if he or she charges a bit more than some of the others. Go see a few of the homes and talk to owners who have occupied them for at least several months.

Choose a building location that promises to remain desirable in the future. Discuss this with your agent.

Choose features and amenities that will stand the test of time. If something seems “faddish” leave it alone. This also goes for colors. Remember the pink and green wall tiles in bathrooms? How about the harvest gold bathroom and kitchen fixtures? They scream “Old house!” and replacing them is an expensive endeavor. (There is a reason why bathtubs are installed in homes during the framing stage – before the exterior walls are closed in or interior walls are sheetrocked.)

Stick to neutral colors for anything that would be difficult or expensive to change when styles change. You can use the “Color of the year” on a wall that can easily be repainted.

The bottom line: While the purchase price of an existing home may be lower, a new home is likely to be less expensive in the long run.

Whether you’re buying an existing home or having one built, Homewood Mortgage, the Mike Clover Group, is here to help with the financing. We offer fast, friendly service, together with the lowest rates and fees you’ll find anywhere in Texas, and we pride ourselves on the lack of red tape connected with our construction loans.

Call today: 800-223-7409





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Real Estate and the Supreme Court


House and Scales of Justice on wood table. Concept mortgage, foreclosure, refinance

While news commentators go on and on about how confirmation of Donald Trump’s pick for the Supreme Court might affect issues like abortion and immigration, there’s been little or no discussion about how it could affect real estate.

In fact, we don’t often think about the Supreme Court and real estate, but it has a huge impact over the years. GTA Real Estate Pros, a real estate expert, knows how to deal with such situations.

Judge Brett Kavanaugh is a conservative and is said to be a strict Constitutionalist. As such, he might be expected to favor less governmental interference in property matters. His record as a circuit court judge seems to support that assumption.

What property-related issues are likely to come before the Supreme Court in the immediate future?

Back in 2005, in Kelo v. City of New London, the court ruled in a 5-4 vote that local governments could use eminent domain to take private land when private redevelopment would benefit the community economically.

While the Supreme Court does not usually reverse its rulings, a case centered on a new aspect of eminent domain could bring about such a reversal.

One such case that is expected to be heard this fall is Knick v. Township of Scott, Pennsylvania. The case revolves around Mary Rose Knick, who challenged a local ordinance requiring her to open her property to the public during daylight hours because grave markers have been found there.

The issue in this case is whether property owners can take their cases directly to Federal courts or must first exhaust all of their legal options in State courts.

Kavanaugh’s vote might reduce regulatory powers.

It’s no secret that he’s not a fan of what he believes is government overreach. One agency he believes has overreached its authority is the Environmental Protection Agency.

If brought before the Court, he could be expected to permanently suspend the Waters of the United States rule of 2015, which placed thousands of acres of wetlands and bodies of water under government jurisdiction.

This rule has, in many areas, prevented the construction of new housing developments and impaired property owners’ rights to make certain improvements on their own land.

Could it become a contest between environmentalists and developers?

Possibly. Developers would be glad to see clearer regulations, fewer required permits, and fewer fees. The result would likely be new communities on land where building is now disallowed.

Environmentalists will likely protest that action – citing the Endangered Species Act and wanting to keep wetlands safe for wildlife.

This year, that issue will come before the Supreme Court in Weyerhaeuser Company v. United States Fish and Wildlife Service. The case revolves around the dusky gopher frog, and private land in Louisiana that some believe is critical habitat for that frog.

While Kavanaugh is not anti-environment, his presence on the Supreme Court could mean a weakening of environmental protections.

Consumer protections could be affected.

Judge Kavanaugh has let it be known that he believes the structure of the Consumer Financial Protection Bureau is unconstitutional. This is the agency that was created by Congress and signed into law by Barack Obama in the midst of the financial crisis.

Kavanaugh believes this bureau wields too much power, especially in light of a director who can only be fired for neglect of duty or inappropriate conduct. Some worry that a lessening of that power could make it more difficult for consumers to bring suit against lenders.

Just as important as the decisions made: Which cases will be chosen to come before the Supreme Court?

You or I can’t just get frustrated and demand that our case be heard by the Supreme Court. It doesn’t work that way.

Cases are presented and the judges decide which they will hear. It takes four of the nine judges to say yes. In other words, the interests and concerns of each judge will ultimately determine the issues that come before the court.

What interests Judge Brett Kavanaugh?


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