Schedule a Consultation
Call us Today at: (214) 669-3307

Stonebriar Mortgage

Stonebriar Mortgage

Interest-Only Home Loans

by

Are you looking to buy another investment property? Do you lack the cash flow to pay large monthly mortgage bills? Many buyers want to learn more about great financing to buy a home. This week, Stonebriar Mortgage helps Dallas, TX and California residents understand interest-only home loans. Read on to learn more about various programs and start comparing options. Then, contact our offices when you are ready to start looking.

Interest-Only Home Loan Programs

Many programs are available for home mortgages that offer interest-only financing. It is best to stay up-to-date with program policies, as there are innovative funding opportunities on the rise. Many people remember the awful mortgage crisis in the early 2000s, and are fearful of risks with interest-only options. However, regulations have changed in response to the mortgage problems of the past.

Interest-only mortgages will begin with lower than usual monthly payments and then increase over time. The borrower is only paying off the interest on the loan with these initial bills. This may seem illogical, but interest-only loans offer opportunities to enter the homeowner market at a rate many people can afford. You need to be cautious, and consider whether you can handle the ballooning payments down the line. In the past, banks would approve customers who could not handle this increase. Today, added safeguards are in place that may prevent this issue in the future.

How Interest-Only Home Loans Work

Interest-only mortgages are returning to the market, but remain a very small percentage of new loans approved.  A majority of these mortgages come with a 30-year term. The initial ten years of the loan are interest-only payments. These loans can be fixed-rate or adjustable-rate mortgages. The fixed-rate option helps you predict and keep the same payment throughout the entire term. However, it will be harder for you to take advantage of a lower interest rate should one become available. Conversely, you are protected if interest rates rise.

Some lenders charge a higher rate since interest-only loans may be riskier to approve. If you are able, see if you can make payments towards the principle balance of the loan during the interest-only period. This is usually allowable without a penalty, just be sure you inform the lender that the extra pay applies to principle. However, some lenders will charge penalties for trying to pay too large of a balance or the entire loan early.

How to Qualify for an Interest-Only Mortgage

Many people who are successful at securing an interest-only mortgage carry common traits. Lenders typically like to see higher income and credit scores. A larger down payment will also help convince the lender to carry more risk. Your assets will be reviewed, and it is best if you have reserves that can quickly be converted to cash if needed.

Stonebriar Mortgage is here to help homeowners in the California and Dallas, Texas area consider interest-only loans, contact our friendly team today!

Buying a Home with a Bank Statement Loan

by

Are you concerned about being able to qualify for a mortgage using traditional underwriting? Do you own your own business or are you self-employed? A bank statement loan may be the best program to finance your home. Bank statement loans use your bank statements and other records to verify your ability to repay the mortgage. If you lack W-2s or tax statements that can accurately reflect your financial standing, then this loan may be your ticket to owning a home. This week, Stonebriar Mortgage helps Dallas, TX and California homebuyers understand this unique mortgage product.

Preparing to Apply for a Bank Statement Loan

The best way to start preparing for your bank statement loan application is to meet with your accountant and gather documentation of your income, assets, debts, and businesses owned. Print out records and bank statements for the past few years, or as requested by the lender. Your tax records, credit score, and housing history may also be used to validate your application.

Qualifying for a Bank Statement Loan

Your employment record, business history, and business plans or market studies may also be helpful in predicting your ability to repay a bank statement loan. Depending on the size of mortgage you seek, a 20% or larger down payment may be requested. Good credit will also help your case; some say 680 or above is standard. Profit and loss statements and tax records of your personal or business finances are also useful in helping you qualify. Essentially, the lender is trying to project what income you will have to repay your loan—so anything you can offer is helpful.

Why Some People Choose to Use a Bank Statement Loan

People who invest heavily in real estate or other businesses for their income often use bank statement loans. If you are someone who likes to fix and flip properties, you may have unusual income patters or large debts. Income may be sporadic, or seasonal. However, you can offset this debt with the assets you own. In this is the case, you may not qualify for a more traditional mortgage program. The lender will use bank statements over a period to analyze and predict what you will be able to handle in your financial future. If you are retired, then you may have to show how your retirement and investment income will help you pay off a bank statement loan.

Stonebriar Mortgage works with a diverse array of customers to secure homes through bank statement loans. Sit down with your accountant and gather your financial history in order to get ready to search for a home. Our staff are interested in helping Dallas, TX or California customers accomplish their financial goals, contact our office today!

Taking Advantage of Cash-Out Refinancing

by

Do you need extra cash flow to pay off major debts, repair your home, go to college, or make other upgrades to your house? At Stonebriar Mortgage, we help Dallas, Texas and California residents with various types of cash-out refinance options for their home. Cash-out refinance is used when people lend against the equity already built in their home. This week, we are here to tell you about various cash-out refinance options. Read on to learn more about why people might use them.

The Nuts and Bolts of Cash-Out Refinance

It is important to understand that completing a cash-out refinance means you will start a new loan. You will have to pay closing fees and may end up with very different loan terms than with your current mortgage. The current mortgage will not necessarily go away, either. However, if you have paid off more of your home and need extra cash flow, then this may be worth the cost. Do you need to make repairs you cannot afford or want to make another major investment in life? You can compare the costs of using a cash-out refinance instead of using other options to finance you needs.

Using a Cash-Out Refinance Loan

When you choose to use a cash-out refinance, make sure the benefits outweigh the costs. Look into other financing for your needs, such as student loans, debt restructuring, store financing, and other options. Interest rates may be lower or higher with the various choices. If you have a lot of high interest debt, then using a cash-out refinance loan may help you pay it off faster. In some cases, the interest on your new loan will be lower. However, you may be able to balance transfer your debt to a new credit card and this may cost less than a new home loan.

The Pitfalls of Using a Cash-Out Refinance Loan

As stated, there may be cheaper ways to finance your needs. For example, you may need to install upgrades or replace a major appliance in your home. It may be cheaper to look at in-store financing options. Some retailers offer 0% financing and credit cards that come with rewards programs. There are no closing costs associated with opening a new credit card, and usually no fees. In a cash-out refinance, fees are a certainty.

You will also take out equity that you had built in your home, essentially borrowing money you already paid, including interest. However, in some situations it makes the most sense to create cash flow from what you have already invested. For example, if you are using the funds to purchase a second home.

Stonebriar Mortgage is here to help homeowners in the California and Dallas, Texas markets consider a cash-out refinance. Contact our offices today!

What Are Portfolio Loans?

by

When a bank decides not to sell a loan on the market, they are keeping it in their portfolio. This is known as a portfolio loan. Banks choose to do this so that they can profit from all the interest as payments are applied. Portfolio loans may also give the company more control over the terms of their loan program. This may be helpful if you cannot qualify for a more conventional source of financing. Read on to learn more about why you want to take advantage of this program. Contact Stonebriar Mortgage for your home purchase needs in the Dallas, Texas or California market.

The Portfolio Loan Application

Check with the bank who provides the loan for their specific application process. Many banks use automated underwriting software. If you lack the traditional documents to meet the automated standards, then a manual underwriting process may be best. Show your worth as a borrower through business assets or investments. Many small banks operate portfolio loan programs to attract an entrepreneurial or investment-savvy borrower into their business. For this reason, they may offer you better rates and loan terms, so that you stay with their company and open other accounts.

Benefits of Using a Portfolio Loan

Obviously, this loan could benefit you if you cannot qualify for a traditional loan program. Many people also appreciate the more personalized customer service they get from working with a smaller bank or credit union.  In a larger bank, you may deal with an array of people over the life of the loan, and struggle to build trust.

Many investors are attracted to portfolio loans for fix and flip properties. The manual underwriting standards may adapt to their unique needs. For example, if you have a high debt-to-income ratio or an unusual credit history, the lender can still work with you.

Risks of Using a Portfolio Loan

Some portfolio loans will carry additional risk, especially if you already carry a lot of debt. The manual underwriting process could subject you to increased interest rates and fees. In addition, a higher down payment may be asked. You can always explore refinancing the loan later if you are not getting your preferred terms. Read the bank agreements closely, since many customize policies. Note if there are any sections where you are being asked to waive certain consumer rights. You should also note any penalties for taking actions such as paying off the loan early, selling at a certain point, refinancing, or more.

Whatever your decision, the friendly staff at Stonebriar Mortgage are here to help. We can discuss your interests and guide you in the portfolio loan process. We are here to support Dallas, Texas and California homebuyers.

Jumbo Loans

by

Are you looking to buy a beautiful home in Dallas, Texas or California? Are you afraid you won’t be able to secure the financing that you need? A jumbo loan may be just the solution for you. This type of mortgage product can be used to finance home loans that exceed restrictions set by Government-Sponsored Entities (GSEs) like Fannie Mae and Freddie Mac. Stonebriar Mortgage is here to discuss jumbo loans for Dallas, Texas and California dream homes. Read on below for more information.

Jumbo Loan Essentials

There are two types of loans: conforming and non-conforming. If a loan is non-conforming that means it exceeds limits set by the GSEs. The limits for conforming loans are updated annually to reflect current home prices, and may be adjusted for more expensive areas, like in California. A non-conforming loan will not get approved for government backing.

In addition, a higher down payment may be required to secure this larger mortgage. You may even be able to provide enough money down to bring the loan into conforming standards for other government programs, such as FHA or VA loans. It is good to explore your options and apply, then adjust down payments and apply again if rejected.

Applying for a Jumbo Loan

When you go to apply for a jumbo loan, there will be a deep review of your finances. The lender will want to verify if you are able to repay the large loan amount using several factors. Here are some of the items considered:

  • Your credit score: usually you will need a good one to get approved.
  • Current debt owed and your debt-to-income ratio.
  • Whether the loan is within conforming or non-conforming rates.
  • Whether you can get Private Mortgage Insurance (PMI).
  • Whether you can offer a down payment (usually they want to see 10-20%).
  • Your current cash reserves and assets.
  • Your home ownership or rental history.

Jumbo Loan Packages

When you secure a jumbo loan, you will need to obtain Private Mortgage Insurance (PMI). PMI protects the lender in case you default on your payments. The cost of this insurance will be factored into your monthly payments. Once you pay down more of the loan, you can negotiate to have the PMI requirement dropped.

Interest rates for a jumbo loan may be higher, due to their increased risk. Perhaps you can investigate an adjustable-rate mortgage, then, apply to refinance the loan down the line if you do not like the rates that you are given. There will be closing costs associated with securing the original loan and with refinancing the loan again.

Whether or not you decide to get a jumbo loan, Stonebriar Mortgage is here to help Texas and California residents secure their dream home. Contact our friendly team today with any questions.