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Understanding Mortgage Notes: 4 Facts You Need to Know

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Buy a Home in Dallas TX

When your homebuying process closes, you are given a document that shows the agreement terms between the borrower and the lender called a mortgage note.

The mortgage note is like a promissory note secured through a specified mortgage loan. This is a document similar to a written pledge that says how you will pay the loan, starting from the amount of money with its interest to the length of time to repay the loan.

To be knowledgeable about the mortgage note, here are some of the things that you need to know about it:

4 Facts You Need to Know About Mortgage Notes

1. The Mortgage Note Includes All of the Terms of the Agreement between the Lender and Borrower.

As mentioned before, the mortgage note is like a promissory note. All of the financial details of the payment process are stated in this document. Moreover, it also includes the consequences and penalties that the borrower has to go through if they do not repay the loan.

Some of the important details in a mortgage note are:

  • The mortgage down payment amount
  • The total amount of mortgage loan
  • The interest rate
  • The duration of the loan
  • The due date of payments
  • The prepayment penalties (if there are)
  • The monthly or bi-monthly payments (if required)

If you’re a borrower, it is important to make sure that a copy of the mortgage note will be provided to you in your home buying process. That way, the terms of the agreement will be clear. It is advised to have a lawyer check the accuracy of the mortgage note.

2. The Mortgage Note Can Be Bought and Sold on a Secondary Market.

The mortgage note serves as a protection for both lender and borrower, so it is accessible through a secondary market. Lenders can sell the mortgage note to investors that prefer safe and risk-free investments.

Real estate inventors technically own the mortgaged property because they bought it from lending institutions. It is safe because the investors won’t lose money unless the borrower prepays their loan or fails to pay the loan on time.

3. The Original Mortgage Note Will Be Given to the Borrower Once the Loan Is Fully Paid.

As a loan borrower, it is important to follow the terms given in the mortgage. It doesn’t really affect the borrower if the holder of the mortgage note changes because the terms will remain the same no matter what. They will get ahold of the original copy of the document once they have paid off the loan. Once the loan is also fully paid, the borrower will own their home with no issues.

4. If the Mortgage Is Paid in Full, The Borrower Will Own the Property.

If the borrower decides to pay the mortgage fully, the mortgage note will be canceled and given to them. This means that they officially own the home without owing the lender any money and have fulfilled all the terms of the loan.

Conclusion

When you’re buying a home, it’s important to learn about all of the documents included in your home loan. Make sure that they’re all accurate to prevent issues from arising. Learn about the terms of the agreement, and pay attention to all of the changes and details throughout the whole process. When buying a home, make sure that you reach out to the best mortgage broker. Here at New Frontier Financial, we help our clients reach their goals to purchase a home or refinance a mortgage. We also help those that plan to invest in real estate in Texas. Call us at (469) 886-8300 to consult about commercial mortgages in Dallas, Texas!

Should You Buy an Old House or Build a New One?

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Buy a Home in Dallas

If you plan to purchase a home, you may opt for entirely new construction or buy an existing house you can decorate and renovate yourself. There is no one-size-fits-all approach for either option, and your personal preference and finances are still what matters.

Between these two, you’ll opt for what you are looking for and your lifestyle. A checklist of your “must-haves” may also help you choose the better option. To help you get started, here are some of the pros and cons of both old and new houses.

Pros of Buying an Old House

If you buy an old house, there may be features that are impossible to find in new constructions. But aside from this, let’s look at some advantages of purchasing an old home.

  • Fully grown shrubs and trees: You will not need to spend time and effort on planting trees and landscaping if you buy an old house. Your place may already have a complete yard and lawn with fully grown shrubs, trees, and other plants.
  • Lower prices: When buying older homes, you may try negotiating to get a lower price. This is because they tend to require significant repairs before you can move in.
  • Established neighborhoods: You can usually find older houses in more established places and communities.

Cons of Buying an Old House

A resale home may be your perfect choice, but here are a few downsides to consider.

  • Less energy-efficient: Because older material was used to build older houses, they are less energy-efficient. It may be very costly to make them more energy-efficient. You need to decide if these improvements are worth their cost.
  • More maintenance: You may need to upgrade, repair, or replace some amenities and appliances on a resale home as these are all old and may not be working.

Pros of Building a New House

If you purchase a new house, you’ll be the first person to live at your place. And here are some of the advantages to considering one.

  • Modernized layout and updated amenities: New construction equates to modern layouts and interior design. Also, when you buy a new home, you may likely have updated amenities like a pool or gym. You have the freedom to include exactly what you want.
  • Fewer repairs: If you purchase a new house instead of an existing one, you’ll have to deal with very few repairs as almost everything in the place is contemporary.
  • More energy-efficient: You may get energy-efficient features from your appliances, windows, insulation, and even solar energy if you buy a new home.

Cons of Building a New House

You can get several great features when buying a new home. However, here are a few of its trade-offs to note.

  • Higher price: Since everything is new, you will likely need to pay a higher amount when purchasing a new house. Modern layouts and new materials can be more pricey.
  • Less charm: Almost all new homes look similar. You may not appreciate a new home’s appeal, unlike the charm and detailed work you see in older houses.
  • Extensive landscaping: New homes typically require extensive landscaping that is too costly and time-consuming.

Final Thoughts

Buying a house is an exciting adventure for you and your family. Choosing between revamping an old home or building an entirely new house both offer their own benefits. At the end of the day, it’s all about what you want, how much you can spend, and how soon you want to move in.

You may try considering Dallas home loans to help you buy the perfect house. Our experts at New Frontier Financial can guide you through your options for Dallas mortgage loans. Call us now at (469) 886-8300 to help you get started with your mortgage application!

VA Loans 101: The Types, Qualifications, and Considerations

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VA Loans in Dallas Texas

Buying a home can be challenging and it doesn’t matter whether you’re a newbie or a seasoned homebuyer. This is because all the paperwork and financial responsibilities can be quite complicated, especially when choosing the best loan for you.

For veterans, qualifying veteran spouses, and active duty service members, you’ll be happy to know that you have access to affordable housing and mortgages thanks to VA loans. VA loans are backed by the Department of Veteran Affairs, giving you the benefit of borrowing funds without the need for putting a downpayment, helping you avoid mortgage insurance.

If you’re considering getting a VA loan, it’s best to speak to a reliable mortgage broker to ensure you’re getting all the information you need to know which loan will work best for you. To learn more about the different types available, read on. Here’s everything you need to know:

Can I Get a VA Loan?

To qualify for a VA loan, you must meet certain criteria, such as:

  • Being an active member of the military or you’re a veteran who meets the minimum length-of-service requirements;
  • Being a surviving spouse of a veteran who died while on active duty or has sustained a disability due to service;
  • You can meet your lender’s chosen credit and income requirements;
  • The property you wish to purchase will be your primary residence;
  • Receive a VA certificate of eligibility that verifies your status as a qualifying service member or surviving veteran spouse.

What Are the Different Types of VA Loans Available?

  • VA Purchase Loan: A VA purchase loan is a standard mortgage that allows a buyer to purchase a property with a $0 down payment. If you obtain this loan, you get to secure better mortgage terms from your lender;
  • VA Cash-Out Refinance: With a VA cash-out loan, you can take 100% of your home’s equity for medical bills, pay a family debt, education, home improvements, and more;
  • VA Interest Rate Reduction Refinance Loan (IRRRL): With a VA IRRRL, you can reduce your monthly mortgage payment on your existing home loan by modifying your interest rate to a lower amount. With this, you can also enjoy greater stability when you switch to a fixed-mortgage rate which could be done with a VA IRRRL;
  • VA Native American Direct Loan (NADL): If you’re a Native American native, you can obtain a VA NADL, which allows you to buy, build, and improve your home situated on federal trust land. Besides that, you can also refinance your current NADL loan, enjoy limited closing costs, and eliminate private mortgage insurance.

    VA Renovation Loan: Finally, you can obtain funds to purchase and renovate a property with the VA renovation loan. This loan is similar to a traditional VA loan as it’s designed to support alteration and home repairs.

What Do I Need to Consider When Choosing a VA Loan?

Different VA loans come with their own pros and cons. So when you’re deciding to get a loan, understand what motivates you — do you want to purchase a home, seek refinancing, or do you want to make home improvements? When you know what you’re seeking, you can find a mortgage broker who can offer you favorable rates and suggest the best VA loan program for your goals.

The Bottom Line: Choosing the Right VA Loan for You

Seeing as there are a bunch of VA loan types to choose from, getting assistance from a mortgage broker can help you narrow down your selection and find a loan that’s favorable for you.

How Can New Frontier Financial Help You?

Are you looking to get a VA loan in Dallas? If so, look no further because New Frontier Financial can help you. We are a full-service mortgage broker service, and we can help you achieve your goal to buy or refinance a home or invest in real estate in Texas.

If you’re looking for mortgage brokers in Dallas, TX, give us a call at (469) 886-8300 today!

Busted! 5 Common Misconceptions About Reverse Mortgages

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Reverse Mortgages in Dallas Texas

Reverse mortgages are indeed a complex topic. But, you should not let the myths surrounding it make you more confused. Instead, know the facts behind each misconception so you can have more informed decisions when it comes to your finances.

Reverse Mortgages Myths

  1. Reverse mortgages are expensive. A reverse mortgage can be a better option than a traditional mortgage because it eliminates the required mortgage to be paid on a monthly basis. With a traditional mortgage, you will be obligated to make a monthly payment. A reverse mortgage offers a more sophisticated element than a traditional mortgage. It is known as a Mortgage Insurance Premium (MIP). It provides more flexibility for equity access with a non-recourse loan and insures your loan, too! Before believing that MIP makes a reverse mortgage expensive, make sure to check first the numerous benefits it can give. Being expensive can mean higher quality and more benefits. A reverse mortgage can definitely establish long-term insurance and a convenient way to preserve your property.
  2. Reverse mortgages are usually intended for taking a holiday. While there’s really no hard rule on what you can use the loan for, reverse mortgages are usually intended for immediate needs and practical reasons. Some of the most common uses for this loan are to pay off an existing mortgage, outstanding debt, buying maintenance medications, or even for home improvement. Simply put, reverse mortgages are for supporting your needs during your golden years, not so much of the wants.
  3. The reverse mortgage becomes due when the homeowner becomes sick and needs to be in a care facility. The reverse mortgage will stay in place no matter what happens, unless the last surviving borrower dies, sells the home, or does not live in the home for a year. If the situation is applicable in any of those scenarios, then the reverse mortgage becomes payable and due. So if one spouse becomes ill and is admitted to a care facility or hospital, the reverse mortgage will continue to maintain a steady cash flow.
  4. Medicare and Social Security will be affected by a reverse mortgage. There will be no significant effect or change in your Social Security and Medicare benefits. For Medicaid, however, eligibility will depend on the amount withdrawn from the reverse mortgage each month. The limit also varies, so consult a financial expert regarding this.
  5. When a homeowner dies, the heirs must pay off the loan, which may exceed the home’s market value. Being a non-recourse loan, the reverse mortgage does not require the surviving family to pay off debt. The family does not need to worry about anything, even if the loan balance is greater than the home value. To pacify your fears, a reverse mortgage allows homeowners to be the sole owner of the property. Even lenders can’t have their hands on the title.

Conclusion

A reverse mortgage can be surrounded by several misconceptions making it hard for some people to trust the benefits and opportunities it can provide. Now that we have debunked those myths, you can now appreciate the benefits of a reverse mortgage on your retirement years.

Apply For a Reverse Mortgage at New Frontier Financial Inc.

Need more information about reverse mortgages in Dallas? New Frontier Financial Inc. can help! We provide mortgage services and help you achieve your goal in refinancing or purchasing your dream home. Contact us today at (469) 886-8300!

A Beginner’s Guide to FHA Loans: Requirements & Benefits

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FHA Loan in Dallas Texas

Do you plan on getting an FHA loan? An FHA loan is a government-backed mortgage that is insured by the Federal Housing Administration. It is very popular among first-time homebuyers due to its low down payments and minimum required credit scores.

Typically, the government issues the loans, but it is offered by FHA-approved mortgage lenders. If you are a first-time home buyer, it is best to get this since you don’t need to present a high credit score like other options on the market. To know more about FHA loans, read our guide below:

What is an FHA loan, and how does it work?

FHA allows borrowers who do not have enough cash savings or high income to purchase a home. Many lenders also have certain guidelines or high credit scores as part of their requirements. With these loans, they allow people with low credit scores or those who don’t have a perfect credit track to borrow from them.

Of course, there is a catch to this generous offer. You will need to pay FHA mortgage insurance because it protects the lender from a loss if they default on the loan. Usually, mortgage insurance is required when you only paid less than 20 percent of the loan amount.

There are two mortgage premiums you have to pay. The upfront mortgage insurance premium is 1.75 percent of the loan amount, and it is paid when the borrower gets the loan. The annual mortgage insurance premium is estimated to be between 0.45 percent and 1.05 percent, depending on the loan term (15 years or 30 years), the loan amount, and the initial loan-to-value (LTV) ratio.

Your FHA mortgage insurance premiums will only be canceled after 11 years, but that is if you are able to finance 90 percent or less of the property’s value and stay current with payments. Lenders are also limited to charging no more than 3 percent to 5 percent of the loan amount in closing costs. It is no wonder that FHA loans are popular with first-time homebuyers and those with low to moderate incomes. Keep in mind that you can get an FHA loan as long as you are using it to buy a primary residence.

Requirements for getting an FHA loan

To be eligible for an FHA loan, you must meet the following lending guidelines:

  • The loan should be used for a primary residence.
  • You must present a legit employment history for the last two years.
  • Your income must be verifiable through pay stubs, federal tax returns, and bank statements.
  • You must have a FICO score of 500 to 579 with 10 percent down or a FICO score of 580 or higher with 3.5 percent down.
  • The property must be appraised by an FHA-approved appraiser and meet HUD property guidelines.
  • Your front-end debt ratio (monthly mortgage payments) should not exceed 31 percent of your gross monthly income.
  • Your back-end debt ratio (mortgage, plus all monthly debt payments) should not exceed 43 percent of your gross monthly income. Lenders may allow a ratio of up to 50 percent in some cases.

Conclusion

At this point, you now know that FHA loans are an excellent solution for first-time borrowers who are looking for a new home. There is still a lot you need to learn about FHA loans, so it’s best to talk with your lender. They can give you a detailed guide on the steps you need to take and their requirements once you are given the loan.

Are you looking for reliable mortgage loans in Dallas? New Frontier Financial Inc. is a full-service Mortgage Broker Service. We are excited to help you achieve your goal to purchase or refinance a home or invest in Texas real estate. Contact us today at (469) 886-8300 to see how we can help!