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This is the second most important step in obtaining your new home. The fist step is locating just the right home for your wants and desires. We go over that aspect on our getting started page. Then comes the fact that unless you are independently wealthy and wish to pay cash, you will need to obtain some type of financing on your purchase.

We have listed below many different types of financing that is available today for your needs.  Not all of these will be available to every purchaser, nor will they all suit your specific needs.  We have financing available for most buyers today with many types of loan programs and many different lenders.  Even if you have been unable to obtain financing in the past because you were self employed or retired or have a low credit score, we have lenders that have programs that will be just right for you today.

Conventional Loan Programs
  20% Down Payment Low Interest Rates (No PMI)
  10% Down Payment Low Interest Rates (W/ PMI)
  5%   Down Payment Low Interest Rates (W/ PMI)
  0%   Down Payment Low Interest Rates (W/ PMI)
*  Programs are available with 0% down depending upon special guidelines such as credit scores, interest rate, and term of loan.)
  3%   Down Payment
*  FNMA offers a 3% minimum called the FNMA 97 Flex Loan.
  0%   Down Payment  80/20 Loan (No/ PMI)
  10% Down Payment  80/10 Loan (W/ PMI)
  * Fixed rates or adjustable rate and Interest only loans are available on each of the above loan programs.
  ** No maximum loan amounts although FNMA Conforming loans maximum loan amount is $ 322,700 for single family homes, and Freddie Macs Limit on Single family conforming loans is $312,895.
FHA Home Financing

FHA-203B Loan 3% Investment in home (Includes Closing cost) (W/MIP)

FHA-203B Investor Loans  25% Down payment requirement but only on HUD owned properties.  Escrow program is allowed but the 203K loan is not available to investors.

FHA-203K Rehab loan with 3% investment can roll the cost of the repairs into the cost of the loan.  Allows you to purchase a home that needs extensive repairs at a substantial discount, and finance the home and the repairs in one loan.

FHA-203B w/escrow  This program is available only on the purchase of HUD homes and allows the financing of minor repairs into the loan similar to the 203K loan but with lower cost.  Maximum repair cost is $5,500.
  * FHA Adjustable rate loans and step loan rates are available on most FHA loan programs. Maximum loan amounts in the Houston area are as follows: Single family $ 172,632 Two Family $220,992 Three Family $267,120 Four Family $331,968. FHA Mortgage Insurance premiums are sometime dependent on your down payment amount.  You should discuss this with your lender.
  ** Many other FHA loan programs are also available but not widely used in today's marketplace. You can refer to the HUD website for more information on additional HUD loan programs.
  FHA Down Payments: Currently on all FHA loans, the down payment required is 3.25%.
  FHA Loan - The federal government insures loans against default through the Federal Housing Administration. This agency insures 100% of the principal on loans made under their guidelines. FHA insured loans have an up front premium which is usually typically added to the loan amount and also a monthly premium which is added to the borrowers total payment.
VA Home loan Programs
  100% Financing for VA Fixed rate loans for veterans
  100% Financing for VA Adjustable rate loans for veterans
  VA Loan - The maximum loan amount is $203,000 with no down payment. The maximum loan amount with down payment is $300,700 provided the veteran's loan guaranty( max of $60,000 ) plus down payment is equal to 25% of the loan amount applied for not to exceed $300,700. Example: SP $325,000 - $300,700 VA max loan = $24,300 Down Payment. This would be acceptable because the down payment of $24,300 plus the max VA guaranty of $60,000 equals $84,300. $84,300/$325,000 = 25.94%
  * *  No down payment is required if the veteran has full guaranty benefits provided his loan amount is no greater than $203,000. Don't forget that veterans can use their benefits more than once. For loan amounts greater than $203,000, please follow guidelines shown in Maximum Loan Amounts above. Call for details.
  The Veterans Administration guarantees a veteran's loan against default. Although the VA does not have an insurance premium, it charges the veteran a Funding Fee that is 2% of the loan amount or 3% if the veteran is using his benefits for the second or more times. The fee may be paid in cash at closing or added to the loan amount. If the Veteran is receiving a VA Disability payment at a certain level as determined by the VA, the Funding Fee is waived even if this is the second time for the Veteran to use his benefits.
Texas Veterans Loan Board Programs
  Loans for purchase of a Home
  Loans for rehabbing a home
  Loans for the purchase of land only
  * Texas Veterans must meet certain requirements for further information go to their website.  You do not have to be born in Texas or join the service from Texas as long as you have lived here for 3 years. 
Credit Challenged Borrowers
  These loans are typically referred to a B, C, or D loan products. The down payment and interest rates are based on all of the factors that apply to any loan such as your income debts, job history, rental history, and credit. The rates for these loans vary greatly.  You should discuss all of the terms of your loan with the lender and allow Eagle, Realtors agent or broker to review these with you.  Some of these loans have adjustable interest rates, balloon payments and prepayment penalties.  You should understand all of the terms of your mortgage before going forward with your home purchase.    
First Time Buyer Programs
  Because of the wide variety of these programs please give your agent with Eagle, Realtors a call and we can explain these programs to you in some detail.
Downpayment Assistance Programs
  Funds Needed to Close
Often, the most serious problem facing the buyer is coming up with the funds needed to close (down payment, closing costs, and prepaid items). The following is a list of sources that are often overlooked:
  • Gifts (Ameridream, Nehemiah, Family, Etc�)
  • Loans against an asset owned by the borrower, i.e., 401K or savings plan at work
  • IRA accounts under certain conditions
  • Loans against stock or bond accounts
  • Grants are sometimes available
  • Lender premium pricing
  • Second liens
Grant Programs
  Because of the wide variety of these programs please give your agent with Eagle, Realtors a call and we can explain these programs to you in some detail.
Assumptions (assuming the previous owners loan)
  Some loans are still assumable but require that the borrower qualify on the loan as the original borrower did. The fully assumable loans without having to qualify for the loan were phased out in the early 1980's thus making these loans not practical to assume any longer.
Lease Option or Lease to Own / Owner Financing
  Because of the wide variety of these programs please give your agent with Eagle, Realtors a call and we can explain these programs to you in some detail. The Texas Legislature has recently passed new laws that affect the use of Contract for Deed and Lease purchases and Owner Financing in Texas to the point that it is very difficult to get one of these done in Texas and still abide by all State laws .
Contract for Deed (Land Contracts)
  Because of the wide variety of these programs please give your agent with Eagle, Realtors a call and we can explain these programs to you in some detail. The Texas Legislature has recently passed new laws that affect the use of Contract for Deed and Lease purchases in Texas.
Qualifying Debt / Income Ratio
  As part of the loan approval process, the applicant's monthly debt payments are compared with their gross monthly income and the proposed mortgage payment is compared to gross monthly income as well. This process determines your total debt to income ratio and your mortgage payment to income ratio. Conventional, FHA, and VA loans all have ratio guidelines. Acceptable ratios are based upon several factors such as the chosen loan program, down payment, credit scores, cash reserve, etc.
Non-Occupant Co-Borrower (Formerly referred to as a Co-Signer)
  Occasionally, a borrower's income may fall short of meeting the required debt to income ratio. A non-occupant co-borrower may be used to assist meeting these ratios under the following conditions:
  Conventional loan - A non-occupant co-borrower should be a blood relative and the primary borrower must still meet debt to income ratios which are no more than 5% above standard FNMA guidelines before assistance from the non-occupant's income. Domestic partners can sometimes be used.
  FHA loan - A non-occupant co-borrower should usually be a blood relative or someone with a clearly defined relationship. All income and debts of both are combined to meet FHA's debt ratios. Domestic partners can sometimes be used.
  VA loan - any co-borrower must be an occupant and be the spouse of the veteran or be another veteran.
Credit Scores
  A lender must obtain a credit report on each borrower involved in the loan application. This report is drawn from three data sources and will contain three credit scores for each borrower. These credit scores can determine the availability and terms of your mortgage. It is extremely important to determine these score as soon as possible. Please refer to the On Line Pre-Qualification section.
Mortgage Insurance
  Lenders reduce their exposure to loan defaults by obtaining mortgage insurance. The amount and cost depend on the type of loan chosen.
  Conventional Loan - If the purchaser is making less than a 20% down payment, the lender requires the loan to be insured by a private mortgage insurance company. The amount of mortgage insurance is added to the monthly payment. Insurance costs are determined by down payment, term of the loan, and the PMI program you choose. (PMI may be eliminated entirely with the use of second lien financing). Contact your Eagle, Realtors Associate or your lender for help in selecting the best program for you.
  Example: 5% Down / Loan Amount $100,000 / 30 year fixed rate loan =100,000 X .78%= $780 / 12 mos.= $65 added to monthly payment for PMI insurance.
Fixed Rate Loan vs. Adjustable Rate Loan
  A fixed rate loan implies that the interest and principal portion of your payment remains constant for the life of the loan while an adjustable rate loan implies periodic changes to your interest rate and of course your payment. In choosing an adjustable rate loan, you must determine the frequency of rate changes and the amount. The following should assist you in asking the right questions regarding an adjustable rate:
  Market Index - The benchmark rate that is used each time your loan comes up for adjustment( 1 year T-bill, Cost of Funds Index, etc. )
  Margin - The lender adds a pre-determined amount (margin) to the market index to arrive at the new rate for your loan
  Rate Change Limits - Each adjustable rate loan should have maximum change limits to the rate for each adjustment and a limit to the total change over the life of the loan
  Adjustment Period - This refers to how often your loan can be adjusted. You'll commonly hear these loans referred to as 1/1, 5/1, 7/1, 10/1, etc.. A 1/1 loan means that it adjusts once every year for the life of the loan. A 5/1 loan means that the loan will remain at the initial rate for the first 5 years and thereafter adjust every 1 year for the remainder of the loan.
  Initial Rate - The rate at which the loan begins
  When choosing an adjustable rate loan, you assume a degree of risk but it could still present you with a better choice than a fixed rate depending upon length of time you'll live in the home, the current rate environment, etc. I hope this information will help you ask the right questions when researching adjustable rate loans.
Closing Costs and Prepaid Items
  Since closing costs and prepaid expenses vary between lenders, contact me for a good faith estimate of costs that are common and customary for the loan product you have chosen.
What is a Second Mortgage?
  Second mortgages are called second mortgages because they are placed in the second position on your title. Second Mortgages almost always have higher rates than first mortgages. Home equity loans and home equity lines of credit are both types of second mortgages.
Pre-approval vs. pre-qualification?
  The pre-approval process is much more complete than pre-qualification. For pre-qualification, I ask a few questions, analyze the information provided and issue an opinion as to whether I believe the loan is approvable. Pre-approval is a full loan approval, without appraisal and clear title, from either an automated underwriting system or a DE Underwriter. Pre-approval can put you in a better negotiating position, much like a cash buyer.
What is a Rate Lock?
  A rate lock is very simply put, rate insurance. There are four components to a rate lock: loan program, interest rate, points, and the length of the lock. The loan program is the type of loan you are locking (Conventional, FHA/VA, Non-Conforming). The interest rate is the rate that is available under current market conditions. Points are the fees paid to pay your loan officer or to buy down interest rates. One point equals one percent of the loan amount. The length of the lock is the period of time that the lock will be good for. Available options are 15, 30, 60, 90, 120 and 180 days. As the lock period increases, rate tends to increase as well.


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