If you’re like most Texas homebuyers, you’ve probably heard the terms earnest money deposit and option fees and periods since you made the decision to buy a home. You may be wondering what the differences are… and if you’ll need to pay one or both.

Earnest Money Deposits

When you find your dream home, you need to act quickly. You’ll have to let the seller know you’re serious about completing the purchase.
That’s what an earnest money deposit is for. The earnest money deposit is a negotiable amount of money that comes with a set of conditions (also negotiable) that protect the buyer and seller.

Why Does Earnest Money Make a Difference?

When you sign a purchase contract, you’re asking the seller to take the home off the market and hold it for you. That makes it unavailable to other buyers.
Your earnest money deposit is still, in most cases, your money; it goes into an escrow account until the deal is closed. Usually, the money is put toward your down payment.

What is an Option Fee and Period?

After making an offer and negotiating the terms and conditions of the earnest money deposit, you may want to take advantage of the option fee and period. This fee is separate from the earnest money deposit, and it can be a smart investment for homebuyers.
The option period lets you change your mind, with no questions asked, by paying a small fee. It also gives you a little extra time (usually 10 days or less) to complete all the necessary inspections.
Buyer’s remorse? Sometimes the option fee and period can get you out of a mistake. You don’t have to specify a reason for backing out of a real estate transaction, but remember, there are very strictly enforced timelines you’ll need to follow if you take this route.

Are You Buying a Home or Condo in Port Aransas?

Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll begin searching right away.
In the meantime, you might find these links helpful:

• Free mortgage calculator
• Info on buying a home in Port Aransas
• The ultimate moving checklist

Filed under: Blog, Buying, Financing by Julie Woodward
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If you’re buying a home, you already know that it costs money.
But what are the costs of owning a home that go beyond the mortgage? If you’re a first-time buyer, here’s what you need to know.

Beyond the Down Payment

For most home purchases, buyers need to come up with the standard 20 percent down payment (unless you’re using a VA loan, which doesn’t require a down payment at all, or some types of FHA loans).
Other than your monthly mortgage payment, which begins shortly after you move in, you’ll have to think about furniture, décor, and in some cases, appliances. The
These things really add up… and unfortunately, there’s more to come.

Real Estate Taxes

Your home’s value is the biggest factor in the amount of taxes you’ll have to pay. In many cases, mortgage lenders final real estate taxes into monthly mortgage payments—and that can be a big bonus for you because your taxes will be paid on time, and it’s one less thing to worry about.

Homeowners Insurance

You’ll most likely have to purchase homeowners insurance, which protects you against issues such as fire, theft, and other disasters. However, as with other types of insurance, you’ll most likely be required to pay a deductible if something happens; that means it’s a good idea to set aside a stash of cash for an emergency.

Homeowners Association Dues

Some neighborhoods and subdivisions charge homeowners a monthly or annual fee to care for the sidewalks, landscaping, and other amenities. Nearly all condominium complexes charge HOA dues, as well.

Home Maintenance

If possible, you may want to purchase a home warranty that will cover defects and issues. If not, remember the everything in your home has a life expectancy—including appliances, fencing, and other components.
Most experts suggest that you budget between 1 and 2 percent of your home’s purchase price to put toward annual upkeep.

Are You Buying a Home in Port Aransas?

Whether you’re looking for a home for sale in Port Aransas orNorth Padre Island, we’d love to help you find the perfect place to live.
Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll start searching right away.
In the meantime, check out our:

• All-in-one mortgage calculator
• Free homebuyer handbook
• Free eBooks about buying a home (and more)

Filed under: Blog, Buying, Financing, First-Time Buyers by Julie Woodward
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If you’re a veteran of the U.S. Armed Forces, you’re most likely eligible for a VA loan.
Unfortunately, many people aren’t aware of all the benefits that go along with a loan backed by the Veterans Adminstration—or even how they work.

VA Loans: The Basics

It’s not exactly accurate to call it a VA loan. The funding doesn’t actually come from the Veterans Administration; it comes from a private lender. We call it a VA loan because the VA guarantees a portion of it. (That includes the VA reassuring lenders that if you default on your loan, the lender can go to the Veterans Administration to recoup their investment.)

Benefits of VA Loans

If you choose to use a VA loan, the benefits include:

• No down payment required, as long as the home’s sale price doesn’t exceed its appraised value
• No private mortgage insurance premium requirements (most people have to pay PMI if they’re putting down anything less than a 20 percent down payment)
• The VA limits how much the lender can charge you for closing costs
• Sellers are permitted to pay your closing costs
• Lenders can’t charge you an early repayment penalty if you pay off your house before the length of the mortgage is up

Finally, if you run into trouble making your mortgage payments, the VA may be able to help you.

The Maximum Debt Ratio for VA Loans

There isn’t a maximum debt-to-income ratio for a VA loan. The lender does have to provide the VA with “compensating factors” if your DTI is over 41 percent, though. Many lenders have a maximum DTI, and in some cases, it’s lower than 41 percent.

Minimum Credit Scores for a VA Loan

The Veterans Administration does not have a minimum credit score requirement. Many lenders do, however.
Lenders must look at a veteran’s entire financial profile before making a lending decision, even if the vet’s credit isn’t as high as what the bank would typically require.

Are You a Veteran Buying a Home in Port Aransas or the Surrounding Communities?

Whether you’re looking for a home for sale in Port Aransas or North Padre Island, we’d love to help you find the perfect place to live.
Call us at 361-563-7788 or get in touch with us online to tell us what you want from your next home. We’ll start searching right away.
In the meantime, check out our:

• All-in-one mortgage calculator
• Free homebuyer handbook
• Free eBooks about buying a home (and more)

Filed under: Blog, Buying, Financing, VA Loans by Julie Woodward
No Comments »