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Texas Mortgage & Real Estate Thoughts

Buying a Second Home Instead of Paying for a College Dorm

November 1st, 2011 12:55 PM

Are you kids getting ready for college? Think about the option of buying a second home instead of paying for a college dorm?

If you’ve turned on the radio or TV recently, you’ve heard about the rising costs of college tuition and room and board expenses. Even with financial aid available for today’s college-bound students, cash-strapped families are looking for options. Some are choosing to refinance their mortgages (Texas Cashout Refinance), while others are opting to buy second homes.

Yes, you read that right. Families are saving money by buying second homes for their college kids. While it may seem ludicrous at first, buying a second home can actually help you save money in the long term. How? Monthly mortgage payments may be less expensive than college room and board expenses.

Benefits include:

Some lenders have loan programs that provide the most benefit in the first 4-5 years of ownership – just in time for your kids to graduate.
Interest on a second home is tax deductible.
Owning a second home gives you an opportunity to build more equity and increase your net worth.
Extra space or rooms in the home can be rented out for additional income.

More and more families are buying second homes to reduce the increasing financial burden of sending their kids to college, and so can you. Give me a call at (214) 728-0449 today, and let me show you how my knowledge and experience as a mortgage professional can help. You and your wallet will feel much better.

Posted by John Cannata on November 1st, 2011 12:55 PMPost a Comment (0)

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Renting vs Owning - The Big Debate

October 28th, 2011 11:28 AM

Renting vs Owning - The Big Debate

There comes a time in everyone’s life where they have to make the ultimate decision and decide whether to buy and own their own home or continue to rent. It’s a huge decision as both have notable benefits and disadvantages and it is not one to be taken lightly. So lets have a look at these advantages and disadvantages to see which option is really the best option for you.

Owning your own home is the traditional dream that practically everyone has, especially when it comes to starting a family. It gives you a feeling that you have accomplished one of your goals and that you are both financially and emotionally secure as well as giving you a great sense of community. But is it the right decision for you? Lets have a quick look at the advantages and disadvantages of buying and owning your own home.

Advantages:

Set your own rules
Sense of security
A home is a great investment (long term, not for a quick turnaround, especially in todays market)
Get various sort of tax rebates and deductions
Repayment is usually the same or even lower than it would cost to rent - see example of my rent vs own comparison
You build equiry over time
Improve your credit score if you need a loan in the future

Disadvantages:

You are liable for any accidents and injuries on your property
You are liable for any damage to your neighbors house if stemmed from your property - for example a tree branch falling over the fence and damaging something in your neighbors yard.
Responsible for any maintenance in, on, or around your home
No longer can you just pack up your things and leave when you want. You'll need to list and sell your home
Large loan responsibility even if you are having financial hardship
Required to have homeowners insurance to cover damages to the property
Responsible for property taxes
Requires an upfront down payment (VA and USDA are 100% financing products, if you qualify)

Renting is something most of us start out doing and many people are comfortable doing it all their lives. There are many advantages to renting a home but there are also a few disadvantages. Let’s have a look at them.

Advantages:

You can up and leave as soon as your lease it up
If you run into a financial hardship, you can move again
Little or no responsibility for maintenance
Sometimes utilities are included in the rent cost
Sometimes you have free use of amenities such as laundry, pool, and other sorts of actualities

Disadvantages:

Limited or no freedom to what you can do with the place (paint, design, build, etc)
Rent MAY increase
No tax deductions
At risk of being evicted
The house could be sold and you can be asked to leave
Could have restrictions on certain things like noise and pets
Could have restrictions on the number of members living in the house/apartment
Rent is not going into a productive investment for you

As you can see clearly there are many advantages and disadvantages to owning your own home and renting. Some have advantages and disadvantages the other doesn’t have, but both can be a comfortable way to live. When it really comes down to it you have to choose the one that suits you’re financial, emotional and lifestyle needs at this time. You have to take your future into account as well, will you want to be tied down and take responsibility for a huge investment or will you prefer the freeness of being able to move whenever you please? It can be quite a hard decision to make and it is one that needs a lot of time and thought before you proceed to take any further steps.

When you call me, I take the time to evaluate your current financial status and together we can compare the pros and cons to owning a home. In addition, I take the time to complete a Total Cost Analysis. Together, we will find the program that works best for you and your family.

Posted by John Cannata on October 28th, 2011 11:28 AMPost a Comment (0)

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Mortgage Technology Names Supreme Lending Top Tech-Savvy Lender for 2011

October 14th, 2011 6:25 PM

Mortgage Technology Magazine designated Supreme Lending as one of the Top Tech-Savvy Lenders for 2011. This is the third year in a row that Supreme has been named a finalist for this honor! The award recognizes lenders that have a commitment to using sound technology and regularly implementing new innovations to produce marked business improvements.

Check out the full story - located on Page #23

Posted by John Cannata on October 14th, 2011 6:25 PMPost a Comment (0)

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Interest Only Loans in Texas Do Still Exist

September 20th, 2011 10:29 AM

Interest-only loans in Texas do still exist. Even though they are not as popular as they once were, they do still exist.

Over the past few years, they have been the topic of conversation. Many homeowners were placed into these programs without being told exactly what type of program that it is or without completely understanding them when they agreed to them. There are certainly benefits of Interest Only Loans when purchasing a home or refinancing, but there are also risks associated with them.

* Please note that this product is available to anyone that qualifies but personally, I only recommend this program for someone that has a fixed monthly income with a potential of receiving a monthly or quarterly bonus. Or, someone that is paid on commission only.

Here are just a few of the benefits of interest-only loans:

- Smaller interest-only payments give borrowers with uneven income a greater degree of flexibility. The savings generated from interest-only loans versus traditional mortgages give borrowers greater control over their finances, freeing up more money for use in investments or catching up on other bills.
- Smaller monthly payments during the initial interest-only term allows borrowers to afford more home for the same amount of money, or less. Depending on your income, this could mean an increase to your purchasing power by $5,000-$30,000.
- Interest-only payments made during the initial loan term are entirely tax deductible.

The risks of interest-only loans:

- If home prices fall, borrowers could end up owing more money on a home than it's actually worth. Unless the borrower makes payments against the principal, the home builds no equity aside from annual appreciation.
- After the initial interest-only period, the principal balance can cause monthly payments to skyrocket, especially if interest rates have increased.
- The minimum monthly payment option (available on some interest-only loans) doesn't cover the total interest accrued for a given month. The difference is tacked onto the balance, increasing the principal balance, which results in negative amortization. A negative amortization can erode existing equity already built in a home.

Understanding some of the benefits and risks associated with interest-only loans is imperative when searching for a mortgage that fits your needs. If you're looking into refinancing your mortgage or considering buying a home, you need a professional who will take the time to identify your financial goals, and who has the experience and the resources to help you achieve them.

Do not move forward with a Loan Originator that is trying to fit you into a specific loan program without telling you the pros and cons of that program. Ask questions to understand your mortgage options and why one program may be better than nother. There are many programs and options available, but not all of them will help you achieve your financial goals.

Posted by John Cannata on September 20th, 2011 10:29 AMPost a Comment (0)

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Texas Home Affordable Refinance Program HARP

June 4th, 2011 12:49 AM

Extension of the Texas Home Affordable Refinance Program HARP

Back on March 11, 2011, the Federal Housing Finance Agency announced two exciting changes to the Texas Home Affordable Refinance Program (HARP). This program is for Texas borrowers who have demonstrated an acceptable payment history on their Texas mortgage, but due to a decline in Texas home prices or where mortgage insurance is not available, have been unable to refinance to obtain a lower payment or move to a more stable Texas mortgage product. Here is a quick re-cap of the changes:

The program has been extended by one year. Texas lenders can continue to originate HARP loans provided the note date is on or before June 30, 2012.

The program has been expanded, and more Texas loans will now qualify for the program. Previously to be eligible for a HARP loan, the existing Texas loan had to be purchased by Fannie Mae or Freddie Mac prior to March 1, 2009. This date range has now been expanded to include Texas loans purchased by the agencies prior to June 1, 2009.

This means that people who may not have been able to take advantage of a HARP Texas refinance in the past may now be able to do so.

Posted by John Cannata on June 4th, 2011 12:49 AMPost a Comment (1)

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