Buying your first home is an exciting milestone in life, but it can also be overwhelming and filled with questions. As a first-time home buyer, you want to make informed decisions and ensure a smooth process. Below we will address some of the common questions that first-time home buyers often ask.

1. What Exactly Is a Mortgage? A mortgage is an agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to take your property if you fail to repay the money you’ve borrowed.

2. What is the Difference between Pre-Qualification and Pre-Approval? A Pre-Qualification is informal and can be done over the phone or internet with no obligation or paperwork to complete and will only be able to tell you roughly what you can borrow. A Pre-Approval is a formal commitment to lend, and the lender collects all required documents to verify your income, assets & credit and will give you a definite idea of what you can afford.

3. What Steps Do I Need to Take to Secure a Loan? The first step is to complete a Loan Application and provide documentation to verify the application information.

You will need to provide:

• Pay Stubs
• W2 Forms or Tax Returns
• Recent Bank Statements
• Any other documents requested by the underwriter

4.  How Can I Find Out What My Credit Report Score Is? There are several ways to obtain a copy of your credit report. You can request a free copy of your credit report from each of the three major credit reporting agencies.

5. What Are My Responsibilities During the Lending Process? The key thing to remember is to keep your financial circumstances steady during the loan process.

Here are some simple guidance tips:

• Do not change jobs, become self-employed or quit your job.       
• Do not acquire more debt (This includes cars, boats, jewelry, household items or furniture etc.)
• Do not charge large amounts to your credit cards and keep all payments current.
• Do not spend money you have set aside for closing.
• Do not apply for loans.
• Do not change bank accounts or make large or unusual deposits into your account.
• Do not agree to co-sign or co-borrow with anyone during the process of your loan.

6. What Does it Mean to “Lock in a Rate?” Interest rates fluctuate day-to-day. When you lock the loan, it will guarantee that you will receive that rate for the duration of the lock.

7. What does Loan-To-Value mean? Loan-to-value is the amount of money you borrow compared to the purchase price conveyed as a percentage.

8. What Is Included in the Monthly Mortgage Payment? There are five items that are included in a mortgage payment. principal interest, property taxes, homeowners’ insurance, and mortgage insurance

9. What Is Mortgage Insurance and Why do I need It? Mortgage Insurance protects the lender if you fail to pay your mortgage and it is usually required if you put down less than 20%. There are many mortgage insurance options to fit your needs.

10. What Should I Expect on Closing Day? Be sure that you have everything that you need. At closing you will sign a lot of papers, but they will all be explained to you. BE SURE you arrive to the closing on time, and you will be guided from there.

Filed under: Real Estate by Julie Woodward
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Getting a mortgage is a significant financial decision, and it is crucial to ensure that you are financially prepared before applying for one. Conducting a quick financial health check before applying for a mortgage can help you determine your financial standing and your ability to afford a mortgage payment.

Here are some reasons why you should consider conducting a quick financial health check before applying for a mortgage:

1. Check your credit score: Your credit score is an important factor that lenders consider when deciding whether to approve your mortgage application. Check your credit score to see where you stand and take steps to improve it if necessary.
2. Review your debt-to-income ratio: Lenders will also look at your debt-to-income ratio, which is the amount of debt you have compared to your income. If your debt-to-income ratio is too high, you may not be able to qualify for a mortgage. Try to pay down debt and increase your income to improve your debt-to-income ratio.
3. Calculate your down payment: Most lenders require a down payment of at least 20% of the purchase price of the home. Calculate how much you’ll need for a down payment and make sure you have enough savings.
4. Determine your monthly housing costs: Take a look at your monthly income and expenses to determine how much you can afford to spend on your mortgage payment, including property taxes and insurance. Make sure you’re comfortable with the monthly cost before applying for a mortgage.
5. Get pre-approved for a mortgage: Once you’ve completed these steps, it’s a good idea to get pre-approved for a mortgage. This will give you an idea of how much you can borrow and the interest rate you’ll receive.

Conducting a quick financial health check before applying for a mortgage is a smart move. It can help you identify any financial issues, improve your mortgage eligibility, and ensure that you are prepared to take on the financial responsibilities of homeownership.

By following these steps, you’ll be able to quickly assess your financial health to increase your chances of being approved for the loan and determine whether you’re ready to apply for a mortgage.

Filed under: Mortgage by Julie Woodward
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A mortgage application is typically several pages in length, and it requires you to provide a considerable amount of information about your personal, professional and financial life. Some mortgage applicants may not have access to all of the information when completing the application, and others may simply skim over the form and provide incomplete answers. These are only a few of the reasons why information on the mortgage application may not be accurate, but there are several key reasons why applicants should avoid giving inaccurate information.

Loan Approval is Based on It

The initial loan application will usualy serve as a basis for the pre-qualification of the mortgage request. The applicant may make a decision to move forward with an offer to purchase a home based on this pre-qualification, but the pre-qualification is based on the accuracy of the information that is initially provided to the lender in the loan application. If the information is incorrect then an applicant may not be able to qualify for the loan and the deal could fall through. 

Information Will Be Verified

The majority of the information that is provided by the applicant in the loan application will be verified at various points throughout the loan process. For example, a credit report may be pulled very early on in the loan process, and it may be used to document the accuracy of the debts and monthly payments that the applicant wrote on the loan application. Tax returns, pay stubs and other related documentation may also be required. Essentially, the lender will eventually have access the accurate data, so there is little benefit to provide inaccurate information up-front on the loan application.

It Is Against the Law

A final reason why it is not advisable to provide inaccurate information on the application is because this is illegal. There is a disclaimer on the standard mortgage application that goes into detail about the law regarding providing false information on a loan application. There are also disclosures that are signed before and during closing that relate to this.

Completing a loan application is among the first steps mortgage applicants take when applying for a loan, and it is easy to overlook the importance of providing accurate and detailed information at this stage in the process. It is best to take time complete the loan application as thoroughly and accurately as possible since it is a legal requirement and because of many other negative consequences. Those who have questions about how a loan application works or who would like to begin the loan application process can reach out to their trusted mortgage professional for assistance.

Filed under: Home Mortgage Tips by Julie Woodward
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If your personal budget is similar to many other people’s budgets, your home mortgage payment is by far the largest expense that you pay for each month. In fact, this payment may easily account for 20 or 25 percent or more of your take-home income.

Understandably, you may be focused on trying to pay this expense off early. By focusing on this payment, you can build equity and may be able to achieve financial security more quickly. You simply have to find a way to put aside a bit of extra cash regularly so that you can make extra payments, and there are few easy ways that you can consider.

Use Your Tax Refund

First, if you are one of the many taxpayers who receives a refund each year, consider setting aside some or all of this refund to reduce your outstanding mortgage balance.

Some taxpayers may have such a sizable refund that it can account for two or more mortgage payments each year. However, even a few hundred dollars extra put toward your principal balance will save you a considerable amount of money in interest charges over time and will have a wonderful effect on your balance.

Earmark Your Annual Bonus

If you are lucky enough to receive an annual bonus each year, you may consider using this to pay down your principal balance. While you may usually spend this money on extra holiday gifts or just add it to your spending cash, you can benefit more substantially when you contribute it to your effort to pay down your mortgage.

Use An Automated Draft To Create a Fund

Another great idea that will work well for all individuals is to create an automated draft from your checking account each month. You may set aside the funds in a special account, and you can make an extra mortgage payment from this account periodically. Another idea is to set up auto payments for your mortgage that are higher than the amount due. For example, you may establish auto payments that are $50 or $100 more than your scheduled payments.

Paying off your mortgage earlier can be a life changing event for you. Simply imagine how different your life would be if you were not responsible for this payment each month. The fact is that this could be your reality sooner than you think if you follow these tips. For the best results, apply two or even all three tips to your efforts.

Filed under: Home Mortgage Tips by Julie Woodward
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First-time buyer?
Don’t worry — your Port Aransas Realtor® will walk you through the whole process.

3 Tips for First-Time Home Buyers in Port Aransas

Your first excursion into the real estate market is exciting, but it can be a little confusing (and if we’re being honest, it can be a little scary, too).
With the right help, though, you’ll come out of it unscathed… And you’ll own your own home.

First-Time Home Buyer Tip #1: Get Your Finances in Order Before You Start House-Hunting

Order your free credit report from Annual Credit Report. Thanks to the Federal Trade Commission, everyone’s entitled to one free copy of his or her credit report every year. Annual Credit Report is the one the FTC recommends you use, but there are other services available — just be careful that you’re not signing up to pay for something when you don’t have to do so.
Start talking to lenders. Get quotes on mortgages, and compare their rates and fees.
Figure out how much money you can spend on a down payment. Typically, the more you spend on a down payment, the lower your mortgage payments will be. If you qualify for a VA loan, use it! Try to get preapproval for a loan (not prequalification, but preapproval) before you start looking; that way, you’ll know your budget and you’ll be able to find homes that really meet your needs.

First-Time Home Buyer Tip #2: Separate Your “Needs” From Your “Wants”

You need a bathroom and a bedroom, and probably a kitchen… but that’s if you’re flying solo. If you have children, you’ll have to plan for their needs. Don’t forget to think about the future, too; if you’re growing your family (or if some are leaving the nest), you’ll have to plan accordingly.
We all want a swimming pool, an outdoor kitchen, and a big, roomy garage, but unless you need these things, you may want to brace yourself; they might not be feasible when you’re buying your first home.

First-Time Home Buyer Tip #3: Let Your Realtor Do the Heavy Lifting

Tell your Realtor what you need and what you want. Make sure she knows about your budget and your preapproval status so she can find Port Aransas real estate listings that meet your needs, and set up times to go see the homes you’re interested in buying.
Remember while you’re house-hunting that great homes don’t stay on the market for long. If you find one you love, make an offer. Your Realtor will help you every step of the way!

Are You Buying a House in Port Aransas?

If you’re buying a home in Port Aransas, call us at 361-563-7788 right away. Tell us what you’re looking for and we’ll help you find it.
In the meantime, browse our Port A real estate listings in some of the most popular communities:

Filed under: Blog, Buying, First-Time Buyers by Julie Woodward
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