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Stonebriar Mortgage

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Second Home Loans

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Whether its to vacation in a favorite spot, find somewhere cool to spend summer, or generate investment on another property—there are many reasons to get a second home. Before you decide whether to buy a second home, it is important to weigh your options carefully. You will need to consider if you can afford another mortgage and pay for the upkeep on another home. Below is more information on what to consider and some useful tax considerations. Stonebriar Mortgage helps Dallas, TX and California homeowners learn about options for second home loans in this week’s blog.

Can You Afford a Second Home Loan?

Real estate is a great investment. Even if you are buying a second home to use as a vacation or retirement property, chances are you will not be there year-round. You may be able to generate income off renting the property or owning a timeshare. Below are some factors to consider when deciding if you can afford a second home:

  • Down payment—do you have enough saved for a down payment that will get you good financing on the property?
  • Closing costs—what will the closing costs be? Can you earn them back in rental income or afford them in your budget?
  • Monthly mortgage payment—what will the monthly payments be combined on your current and second home? What about the maintenance costs and taxes?
  • Property Insurance—don’t forget to include any homeowners or mortgage insurance you will need to buy. Some companies charge more for insurance on a second home.
  • Utilities and landscaping—even if you are not there year-round, you will need to pay for utilities and landscaping. How do you manage these things remotely?

Considering the Purpose of Your Second Home

When considering the above costs and whether you can afford them, ask yourself if this is going to be a vacation or investment property. Perhaps it is a mixture of both. The purpose of your second home will impact your taxes. If you spend more than 14 days a year at the home, or rent it for 10% of the time, it is considered a vacation home. In this case, certain items may not be deductible on your taxes, such as utilities and taxes.

If you are using the second home to generate income from rent, then you may be able to deduct items like utilities, management fees, real estate taxes, and more. If the home is a mixture of an investment and vacation property, then get ready to keep detailed records on how you use the home. Your records will be used by your accountant to determine what may be deductible.

Stonebriar Mortgage enjoys helping clients find their second home in Dallas, Texas and California, feel free to reach out with any questions you have about the process.

Fixing and Flipping Houses

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If you learn to master the fix and flip real estate market, then you can increase your wealth and achieve great financial goals. Many investors use this approach and leverage the housing inventory of up and coming markets. This week, Stonebriar Mortgage helps Dallas, Texas and California homeowners with tricks and tips for fix and flip properties.

Learning the Art of Fixing and Flipping

Many people get into the business of fixing and flipping properties via classes or by shadowing an experienced professional. Even after class, it is important to network and stay registered to news and blogs. You need to stay current on the latest best practices. Be sure to consider reviews and feedback on courses before you pay. Many people say the best classes cover an array of topics. You will need skills in managing construction contractors, finding affordable properties, negotiating, selecting properties, and targeting your market audience.

Finding the Right Neighborhood for a Fix and Flip Property

When you look for the right neighborhood to buy your fix and flip house, focus on markets that have great growth potential, but that are not too expensive. Usually the local city is aware the area is poised for dramatic growth, and so they will upgrade the infrastructure to keep pace. Many up and coming neighborhoods exist in the Dallas and California areas.

Budgeting for a Fix and Flip Property

You will need to allot funds to purchase a home, pay contractors, legal fees, financing fees, and other costs. Even if you do not hold on to the property for a long amount of time, you may still need to pay HOA fees, taxes, and insurance on the home. You should have a budget and monitor expenses closely during each phase of buying and selling the property.

Finding the Right Property

Many people spend ample time learning how to find the right property to fix and flip. Older homes may be more affordable to purchase. You should thoroughly review the history of the home and neighborhood. If you do not inspect the house well, you risk finding an unfixable or unaffordable problem during your rehab. You should also be aware of the local laws governing the home and whether there is lead or asbestos to remediate. Some people even get a second opinion when inspecting the property.

Selling the Fix and Flip Property

You will want to ensure you get the home properly appraised and inspected for its value after you make the repairs. You will also want to recoup your costs for financing, rehabbing, and holding the property. If the home is taking too long to sell, you may need to adjust your price to attract customers. Stonebriar Mortgage can help you find fix and flip opportunities in Dallas, Texas and California. We welcome you to learn all you can about investing in real estate and contact our office for details.

Jumbo Loan Refinancing

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In past topics, we covered jumbo loans, which are typically used to finance high-value homes and larger than standard mortgages. Many people get approved for jumbo loans that have high rates in this somewhat riskier mortgage. If you have a jumbo loan, you may want to refinance and restructure as you pay it off.  Check today and see if you can get better interest. This week, Stonebriar Mortgage is here to educate homeowners throughout California as well as Dallas, Boerne, Fair Oaks Ranch, Helotes, and San Antonio, TX about jumbo mortgage loan refinancing.

How Do I Qualify for a Jumbo Loan?

Jumbo loans are also known as non-conforming loans because they exceed limits established by government agencies. For this reason, someone may need to undergo more scrutiny to seek approval for a jumbo loan. These loans are not approved for government backing, so you will also need a good financial history to qualify to refinance a jumbo mortgage.

How to Refinance a Jumbo Mortgage

Qualifying to refinance a jumbo mortgage may prove very difficult and will come with additional fees, since some jumbo loans are quite large. The size of the loan means that interest payments can really add up over time, so it may be worth the effort to refinance and save. You can do a financial projection to see if the initial costs warrant the savings. If you decide to go for it, prepare to provide ample documentation.

Many lenders desire to see a good credit score and loan-to-value in order to approve a jumbo loan refinance. Some people have adjustable-rate mortgages and are looking to save on interest, others apply in order to pull out cash from the home. Your debt-to-income ratio must be under 43%. You will also need to show proof of other sources of cash and financial reserves. There may also be limits on the number of properties you can hold mortgages on in order to qualify. The team at Stonebriar Mortgage is here to assist homeowners in The Colony, Flower Mound, Lucas, McKinney, TX and beyond through this process.

Gathering Documents to Refinance

In the process of refinancing a jumbo loan, there is ample documentation that you will need to gather. You will want at a minimum:

  • At least two years of tax returns.
  • At least two years of W-2s.
  • At least one to two months of pay stubs and bank statements, including ample evidence of commissions earned (if needed).
  • If you are self-employed, you will need to provide profit and loss statements for your business.

Finding the Right Time to Refinance

Be sure you look closely at your credit, debt-to-income, and loan-to-value in order to learn if it is time to refinance your jumbo mortgage loan. Qualified professionals are here to help. Stonebriar Mortgage works with Allen, Frisco, Highland Park, Plano, and Prosper, TX homeowners for Jumbo Loan Refinancing. Please contact our office with any additional questions.

Reverse Mortgages

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A reverse mortgage is exactly how it sounds; it is a loan taken out of the equity in a home you already own. Many people use a reverse mortgage to pay off debt, make home repairs, or purchase a second property. Home equity loans are another name for a reverse mortgage. While these loans can be hard to understand, the process can be quite simple. In this week’s blog post Stonebriar Mortgage helps Dallas, TX and California homeowners learn about reverse mortgages.

Understanding Reverse Mortgages

Imagine you take out a reverse payment from all the monthly payments you have made on your home mortgage. This is exactly what you do when you apply for a reverse mortgage. The lender is taking your loan out of the equity you have built in the home, and paying it back out. You will still be charged interest and fees to complete the process. Be sure that you can pay off a reverse mortgage, because if you cannot, then you may have to sell your home.

Home Equity Mortgages

Another name for a reverse mortgage is a home equity mortgage. One type of program, called the Home Equity Conversion Mortgage (HECM) is a government-sponsored program. You can apply for this program directly. Eligibility criteria include many different requirements. Some programs require a minimum age to apply. If you are older, then you have typically built more equity in homes you have owned. The amount of money you can get in this program may depend on your age.

When you apply for an HECM, you will meet with a government housing counselor. Together, you will review your income, home appraisal, credit score, debt, and abilities to handle additional financial responsibilities. The counselor will then notify you if a HECM makes sense and can also help refer you to other programs.

Other Reverse Mortgage Programs

Single purpose reverse mortgages are another alternative to an HECM. They are a program created for a single specific purpose: such as energy upgrades or home renovations. Government agencies and nonprofits typically manage single purpose reverse mortgage programs. Some agencies even create programs to help people pay off their debts.

Proprietary reverse mortgages are another type of home equity loan. These are designed by private banks, typically. If you wish to increase the value in your home or raise its worth, you can speak to a lender about the various programs available. Since the lender creates the program terms, there can be many options for your reverse mortgage.

If you want to know more about reverse mortgages, we are here to help. Stonebriar Mortgage helps Dallas, TX and California homeowners with an array of home loan needs, including equity loans. Contact our friendly team today!

What is FHA Streamline Refinancing?

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Loans provided by the Federal Housing Administration often come with great rates and benefits. However, many existing FHA customers could refinance their loan and save even more! With a new process aimed at quick approval, the FHA has come out with a great refinancing product. This week, Stonebriar Mortgage teaches Dallas, TX and California homeowners about the benefits of FHA Streamline Refinancing.

How FHA Streamline Refinancing Works

The process of FHA Streamline Refinancing works by eliminating much of the paperwork and appraisals that are often required to refinance a loan. Certain eligibility requirements must be met. For example, you should be current on your loan payments over the last 12 months. Decent credit will also improve your odds; you will likely have this if you are in good standing on a current FHA Mortgage.

The process is so easy. Some people can even apply right over the phone, without needing professional assistance. Use caution, as you will create a new loan in the process. Ensure that the new debt-to-income ratio is something you can handle.

How to Qualify for FHA Streamline Refinancing

If you are looking to save money on your current FHA Loan payments, and are in good standing, the process to qualify for streamlining is easy. Here are some of the eligibility requirements:

  • Your current mortgage must be FHA-insured; a conventional loan will not qualify for the streamline procedures.
  • You must be current on your payment history and have had the FHA mortgage for at least 210 days.
  • Lenders may disqualify you if you have been delinquent on payments, however, some will overlook this if your mortgage is newer and the payment was under 30 days late.
  • Lenders like to see a benefit to applying for streamlining. Examples of a benefit include the ability to make payments more easily or to reduce the term of the loan. In addition, the new interest rate should be lower.
  • Many say that the new interest rate, Mortgage Insurance, and principle payments may not exceed the existing mortgage by more than $50.

Although you cannot cash-out from this refinancing option, many say the cash you save on payments is just the same as a cash-out refinance. In addition, lenders are not allowed to include closing costs in the mortgage under a streamline process. We have shared general FHA guidelines in this week’s blog post. Please note that different lenders may have updated their procedures and processes.

Stonebriar Mortgage will help you and your family work through the process of refinancing your loan. We have experience working with Dallas, TX or California customers to reap the many benefits of the FHA Streamline Refinance. Contact our friendly staff with questions today!