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Stonebriar Mortgage

Stonebriar Mortgage

30 Year Fixed-Rate Mortgages

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30 Year Fixed-Rate Mortgages

Are you in the process of buying a property and securing a mortgage? You need to make important financial decisions about how you choose to finance the building. You must think carefully and look at various terms, percentages, and payment plans. You can also choose between a fixed-rate mortgage (FRM) or an adjustable-rate mortgage (ARM). 30 year fixed-rate mortgages are a common loan that is maintaining a steady rate in today’s market. In this week’s blog post, Stonebriar Mortgage discusses 30 year fixed-rate mortgages for Dallas, TX and California homebuyers and investors.

Understanding Fixed-Rate Mortgages

A fixed-rate mortgage (FRM) comes with an interest rate that will not change during the loan. Obviously, this is a great option if you are worried about the economy and fluctuating interest rates. Conversely, if the market improves and interest rates fall, it will be much harder for you to change the terms of your loan and take advantage.

With all this in mind, what is one to do? Well, if you are planning to own the property or home for a while, the fixed-rate option may be ideal. Rates will fluctuate more the longer you stay. With an FRM, you will have a predictable monthly mortgage payment and rate. Regardless, you can decide to change the rate type or terms of the loan later, as long as you’re approved.

Selecting a 30-year Term for your Mortgage

Once you have chosen to get a fixed-rate instead of adjustable-rate mortgage, you have options on the number of years you have to pay the loan. Shorter loan terms may have higher monthly payments, but you will pay less interest over the life of the mortgage. Many people choose to have 30-year terms. This can result in better cash flow thanks to the lower monthly payment. Many experts foresee that the rates of 30-year fixed loans will remain steady.

Benefits of a 30-year Term Mortgage

You can write off interest paid on mortgages in your taxes. Some report that the deductions you’re able to get are higher with 30-year term mortgages. In addition, if you use the mortgage for a multifamily property, the improved cash flow will help you in times when residents cannot pay rent or must be evicted. Since there is a better debt service coverage, 30-year mortgages may have a better chance of getting approved than a shorter term. The loan will be amortized over a longer period, as well.

Stonebriar Mortgage helps many commercial investors in the Dallas, Texas and California markets succeed with their financial goals. Our expert staff are here to help answer any questions you have on 30-year term fixed-rate financing for homes and multifamily properties. Contact our team today!

Non-Owner Occupied Loans

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Non-Owner Occupied Loans

When you live in the home that you pay a loan on, this is called an owner occupied Mortgage. Even if the property has up to four units, and you live in one, it is still considered as owner occupied.  If you have a second home that acts as a vacation home, this is also considered owner occupied.

When you apply for the mortgage, the status of your property will be set as owner occupied or non-owner occupied depending on whether you plan to live there after the loan closes. In this week’s blog post, Stonebriar Mortgage helps real estate investors learn more about non-owner occupied loans in the Dallas Texas and California markets.

Buying an Investment Property with a Non-owner Occupied Loan

Real estate is a great investment, especially if you can generate a lot of income off renting the property out. A property with up to four units where you do not plan to live on-site is considered as non-owner occupied if you plan to rent the units for income. Provide accurate information as to your plans with the property when you go to apply for the loan. If your plans change after the purchase is made, you are fine, so long as your intent was accurate at the time you applied for the mortgage.

For example, you may apply and plan to live on the property, but then you get a job transfer and must leave. This is fine, if you plan to rent out the property, you do not need to change the loan so long as your original application was accurate. You must consider whether to buy a second home in the new area or rent. For this reason, you want to shop around when approving an investment property. The expenses can add up with an investment home that is non-owner occupied, but they are usually worth the wealth gained in ownership.

Costs Associated with Non-owner Occupied Homes

Since you will rent the property out to various tenants, you need to make sure you manage your business well and follow legal procedures for renting. Here are some of the costs you may expect when running the home:

  • Costs to market the property, sign leases, and turn-over the apartments if the tenant decides to vacate (you can consider using a third-party property management company to do all of this for you).
  • Costs for utilities, trash, water, and internet or laundry—you can also look for ways to include these costs in the rent you charge or ask tenants to pay for certain things on their own.
  • Costs for legal fees to ensure you properly maintain the place, address any tenant grievances, or proceed with eviction paperwork if a tenant is breaking the lease agreement.

You can always look for ways to do things on your own and save. Stonebriar Mortgage enjoys helping clients find their second home in Dallas, Texas and California make great income from non-owner occupied loans. Contact our staff today to get started!

What are Asset Depletion Mortgages?

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What are Asset Depletion Mortgages?

Asset depletion refers to a method that lenders use to calculate a borrower’s monthly income. In this calculation, they will divide the assets by a set number of months. You do not have to cash in your assets; however, they are used to tell whether you will be able to make your monthly mortgage payments. In this week’s blog post, Stonebriar Mortgage explains how asset depletion works for homeowners in the Dallas Texas and California markets.

How Asset Depletion Mortgages Work

When applying for an asset depletion or asset dissipation mortgage, you are using liquid assets to qualify for a loan approval. If you do not have a traditional monthly income or W2 to use with your loan application, then asset depletion may really benefit you. Let’s say you have significant assets such as funds in a bank, investment or retirement account—these can be used during the underwriting process to prove your worth as a borrower. If you are self-employed, wealthy, or retired/almost retired—then this program may be right for you.

How Asset Depletion Mortgages Get Approved

Lenders may use different methods with this loan, but they generally all work the same. A formula will be used to calculate the income that could be made if your assets were totally liquidated over a set period. An assumption is being made that you would be able to sell or use those assets to obtain cash during the mortgage. Of course, it is not expected that you are required to do this. A lender will add the total calculated amount to any other income you are making to determine what mortgage to approve.

Let’s say you are making money from retirement or social security—this will be added to your asset worth in order to obtain a debt-to-income ratio. While you may have substantial assets, you still may not get approved for a high-value home—so be reasonable in what you plan to buy. You need to recall that they are using a formula and a set period to determine how quickly your assets can convert to cash.

Finding the Right Asset Depletion Mortgage

Stonebriar Mortgage loves helping individuals with high assets and non-traditional income find their dream home in the Dallas, Texas and California markets. Your debt-to-income may range from 40-50% to get approved. If you are currently getting any income from dividends, this will be subtracted from the total amount of assets to avoid double-counting. However, this income will still help you qualify for the right-sized asset depletion mortgage.

Working with the right team is important. Stonebriar Mortgage has experienced professionals here to help you find a home in Dallas, Texas and California using your assets to qualify.

HARP 2.0

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HARP 2.0

H.A.R.P stands for Home Affordable Refinance Program. Several years ago, the government extended the program, creating HARP 2.0. Intended to help struggling homeowners after the mortgage crisis, HARP can be used to refinance homes with declining values. Typically, the value has declined well below what is owed on the mortgage.  Borrowers can refinance into a more affordable and sustainable home loan rate. Stonebriar Mortgage breaks down the HARP 2.0 program for Dallas, TX and California homebuyers in this week’s blog post.

Am I Eligible for HARP 2.0?

You may be asking yourself: this program is quite old, am I still eligible for HARP 2.0? Below are the basic eligibility criteria, you may qualify if:

  • The loan is owned or guaranteed by Fannie Mae or Freddie Mac.
  • The mortgage has been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage was not refinanced under HARP previously (unless it is a Fannie Mae loan that was refinanced under HARP from between March and May of 2009).
  • The current loan-to-value (LTV) ratio is greater than 80 percent.
  • You are current on your mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.

The program known as HARP 2.0 expired in December 2018, however similar programs exist. The Federal Housing Agency has launched a Fannie Mae High Loan-to-Value refinance option and a Freddie Mac Enhanced Relief Refinance (FMERR). These programs extend HARP with slightly different requirements.

What Can I Do with These Refinance Relief Programs?

Through these various relief programs, homeowners can obtain lower interest rates (lowering monthly payments), shorten the term of their loan, and modify their loan from an adjustable-rate to a fixed-rate mortgage. There is no minimum credit score required, which has eased restrictions for struggling borrowers. Many people are saving thousands per year by taking advantage of these programs. Some are getting rates that are 30% lower than in the past.

If you choose to shorten your loan term, your monthly costs may go up, but you will build equity in the home more quickly. By applying to restructure or refinance the mortgage, you will have to go through an application and approval process. You may have to pay closing costs in the end to get paperwork completed.

How Do I Apply for Relief?

Start applying for relief by calling your mortgage company. Obtain information on all loans you currently have and gather your financial documentation for the application. You do not have to continue struggling with bad loans. Stonebriar Mortgage is here to help Dallas, Texas and California homeowners some relief. Contact our local offices today for more details!

2- and 4-Unit Multifamily Loans

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2- and 4-Unit Multifamily Loans

Buying a duplex or multifamily apartment complex can be a great way to generate steady income and build wealth through real estate. You can even live on-site while you build up savings and equity.  Financing two- and four-unit complexes can be like obtaining a mortgage on a single-family home. This week, Stonebriar Mortgage tells Dallas, TX and California homebuyers how to invest in real estate using two- and four-unit financing loans.

Is it a Residential or a Commercial Loan?

The first thing to understand about financing complexes with multiple units is to know which category the units fall into. Generally, the smaller buildings of two to four units fall into residential home mortgages. Properties with more than four units will likely require a commercial lender and additional requirements that you must follow. Stonebriar is here to focus on two to four-unit complexes for the purpose of this topic.

Loan Programs for Multifamily Properties

The same loan programs that help purchase single family homes can be used for multi-family properties. FHA Loans, VA Loans, and conventional loans all have programs available for this larger purchase. Obviously, FHA and VA Loans will have specific qualifications and criteria.

Using FHA Loans

Using an FHA loan will require you to live on the property, but the program can be more accessible financially. You can get as low as 3.5% down payment requirements, good rates, and qualify even if your credit score is not perfect. The eligibility may be less stringent, but the loan amount and property must be within the FHA criteria.

Using VA Loans

For this program, you must be a qualifying current or former military member. You must still also live on-site. However, in this program, no down payment may be required. Costs and requirements for the program are also very reasonable. VA lenders will not require you to get private mortgage insurance and as with FHA Loans, you do not need perfect credit to qualify.

Using Conventional Loans

Conventional loans are non-government sponsored. There are still limits on the size and costs on the properties they will pay for. These are private programs and may require you to pay mortgage insurance and place larger down payments than with FHA and VA Loans. Your financial information and credit score may be more heavily scrutinized, depending on the lender.

Loan Programs for Multifamily Properties

In purchasing the complex, you must clearly decide whether to live on the property as you apply for loans. If you decide to live off-site and be the landlord, then you must consider how you will manage the property remotely and pay for this. Stonebriar Mortgage enjoys helping clients find two- and four-unit complexes in Dallas, Texas and California, please feel free to reach out with any questions you have about financing.