Basic Things to Know About Conventional Loans

November 23, 2021 by newfrontfina

Borrowing money to purchase a property is a process with many requirements and options. A variety of home loan types exist to cater to the needs of different people, but what exactly are your choices? This article will help you understand the conventional loan option and when it could be a good choice for you.

What You Need to Know About Conventional Mortgage

It Is the Loan Provided by the Private Sector.The primary difference between conventional and non-conventional loans is the backing behind the loan provision. Conventional loans are not maintained by the government, which means they are solely handled by the private sector, such as banks and other financial institutions.
- Note: The backing agency is responsible for insuring the loan amount and protecting the lender if the borrower can no longer repay their debt. When they have a strong backing, the lenders will feel less at risk. For this reason, they could offer lower interest rates or lower down payment requirements, which is not the case for conventional loans.
It Requires a Good Credit Score. Undoubtedly, all lenders prefer borrowers with a good credit score, which means less risk for them. The good news is that many different lenders are now providing a more lenient means for people with problematic credit scores. Still, in a conventional mortgage, people with good credit scores have a better chance of getting loan approval. Usually, they require a score of 620 at the minimum.
It Has Stricter Guidelines But More Flexible in Loan Terms. Since these loan providers are not backed by the government and have a higher risk of dealing with clients, they require a higher down payment as well. They might also offer a higher interest rate, but that will depend on many factors. Nonetheless, expect the loan setup to also range from 15 to 30 years. Despite the stringent program requirements, the conventional loan is still the most popular mortgage type in the US. It may be harder to qualify, but it offers more flexibility, such as in special requirements or geographic limitations.

What You Need to Get a Conventional Home Loan Approval

Before securing a conventional home loan approval, you must first be able to provide the following requirements.

Proof that your income allows you to afford the monthly mortgage payment
A verification that you have enough assets to make the downpayment and enough funds to pay for other life and home purchase expenses
Proof that you have a stable and secure source of income
A home appraisal to determine the actual value of the property you are looking into

Martha Walters of New Frontier Financial quoted “Different loan providers request various types of requirements. It is best to secure a complete list from your chosen lender before you start preparing your home loan documents.”

Your Mortgage Broker in Dallas and Houston Texas

Keep in mind that all borrowers get qualified on certain types of mortgages based on their financial profile. If you are a borrower with a strong credit history, low debt, and can contribute a down payment as requested by the lender, a conventional loan will be the best option for you. Also, do not forget that borrowing from a conventional mortgage comes with risk since the government does not back the loan. Still, all of your options have their benefits and downsides too. It would be best to understand what loan type fits your current situation the most.

To learn more about the conventional mortgage and your other loan options throughout the state of Texas, contact us at New Frontier Financial. We are your trustworthy Dallas home loan officers who can help you understand your financial choices better and assist you in finding the best home loan for your situation. Allow us to guide you through the entire process in a fast and easy way. Call us today at (469) 833-2090.

6 Pros and Cons of Real Estate Investing for Beginners

August 31, 2021 by newfrontfina

The reality for many hard-working Americans is that living from paycheck to paycheck won’t build your long-term wealth, leaving you with only enough income to cover the essentials. But for people who are looking to widen their assets and increase their savings over time, investing in real estate is one of the best avenues for beginners.

The stock market is typically the go-to place for seasoned investors, but the volatile space and higher risks don’t make it friendly for aspiring investors. Alternatively, buying real estate offers better diversification opportunities, higher returns, and lower risks for beginners.

Keep in mind that one market isn’t necessarily better than the other since the right choice depends on your goals, risk tolerance, and financial situation. This begs the question: is real estate investing the right move for you?

Exploring the Pros and Cons of Real Estate Investing

What are the Pros?

There are always people buying and selling in the housing market, which means the demand gives the sphere stability compared to the stock market’s fickle nature. While you can’t expect to earn as much as you can reap in stocks, buying real estate guarantees a steady source of income on the side.
As mentioned above, real estate investing is an excellent choice for increasing your sidelines. With a promise of providing a steady cash flow, you can earn enough capital to invest in more rental properties to skyrocket your revenue stream. Not to mention, properties often increase in value over time.
Dealing with taxes can be frustrating for anyone, but the good news for real investors is that you have plenty of tax breaks you can utilize to ease your financial responsibilities from your mortgage interest, property taxes, depreciation, and more.

What are the Cons?

Compared to investing in stocks, the potential returns for real estate investing aren’t as lucrative. If you need to see the difference in a fuller context, think about how the S&P 500 gained over 600 percent while the housing market only increased by 160 percent.
You have to deal with plenty of cash in hand when buying real estate and set aside a dedicated budget for building maintenance, improvements, inspections, and more.
Compared to liquid investments like stocks, you can’t turn a property into cash as fast as you would when selling stocks.

The Bottom Line: Choosing Whether Real Estate Investing is the Right Move For You

There’s no right or wrong when it comes to choosing where to invest your money, but the best choice should meet your unique goals, financial circumstances, and risk tolerance. Nonetheless, the long-term revenue stream, tax benefits, and full control you have with your investments make the housing market ideal for beginners.

Are You Looking for a Reliable Mortgage Company in Dallas, TX to Support Your Real Estate Investments?

Getting the ball rolling for your real estate investment portfolio is not an easy task, especially for beginners who don’t have the financial stability to cover your new venture. Fortunately, New Frontier Financial is here to help make it all happen.

Our mortgage lenders are committed to helping you achieve your goals; that’s why we offer competitive loan options for borrowers with unique needs.

We can also guide you through different mortgage processes — from buying a home, refinancing, and investing in real estate — so call us at (469) 886-8300 to schedule a consultation today!

Exploring Mortgage Loans with No or Low Down Payment Options

August 4, 2021 by newfrontfina

When getting a home, something buyers always have to think about is the mortgage loan that they take out. There are many moves that you can make on the market, but they can often be limited by your budget and circumstances. It doesn’t help that there are plenty of downpayment options that are way too demanding.

Homebuyers don’t have to settle for those alternatives, though. There are mortgage loans that don’t require any down payment at all, while others only charge a low percentage. Let’s explore those possibilities.

Assessing Down Payment Options

When you’re looking for just about any loan, a majority of the lenders will state that you need to put in at least 20% to 25% of the down payment. This is also what’s been encouraged in the past to make the sale price more manageable in the future. However, there are many things that can prevent this, such as current income and other payment obligations.

There are mortgage loans that require little to no down payment, though. These are often backed by the government or organizations under them. Be sure to get in touch with a trusted mortgage broker who can discuss what would be the best loan for you.

No Down Payment Options

Loans with no down payment options can be very helpful for first-time homebuyers. Keep in mind that most of these mortgages will have very specific eligibility requirements that you need to fulfill if you wish to get this. Here are a few examples.

VA Loan. The VA Loan is offered by the US Department of Veteran Affairs. This fund is reserved for members of the military and requires no down payment. Applicants will only face a funding fee in exchange.
USDA Loan. This loan by the US Department Of Agriculture offers a no-down-payment mortgage loan for homebuyers who are seeking property in a rural area. There is an upfront guarantee fee that can be paid alongside the mortgage price itself.
Navy Federal Credit Union. Navy Federal has a zero-down mortgage loan for members and families of the military. They also offer the loan to the US Department of Defense employees. Compared to the VA loan, there are ways where the funding fee from this credit union may be lower.

Low Down Payment Options

As those zero-down payment options can be quite stricter with their requirements, there’s a chance that you’re unable to qualify for them. However, there are still other options open where only a low down payment is required. Here are a few options.

FHA Loan. The loan from the Federal Housing Administration is open for many citizens who are seeking a mortgage that would require just a 3.5% down payment. Those with lower credit scores may be charged with a 10% down payment.
Conventional 97 Mortgage. The Conventional 97 mortgage loan is one of many offered by Fannie Mae and Freddie Mac, a government-sponsored enterprise. This requires only a 3% down payment, accepting gifted funds to cover the expense.
HomeReady Mortgage. The HomeReady mortgage by Fannie Mae only needs a 3% down payment. It’s also beneficial to homebuyers who may want more flexible underwriting on their loan to get a better price.
Home Possible Mortgage. The Home Possible mortgage by Freddie Mac just needs 3% down payment as well. There are also flexibilities similar to the Home Ready mortgage, though this is more open for people with lower credit scores.

Buying A Home in Dallas With New Frontier Financial Inc

Martha Walters of New Frontier Financial Inc quoted “Don’t limit yourself to mortgages with high down payments. No matter your financial situation, there should be a mortgage loan program suitable for you. That way, you can purchase a house and pay it back on your own terms.”

Need a mortgage broker in Dallas, TX to discuss your options? New Frontier Financial Inc is a mortgage broker service that can introduce you to different purchase options. Call us at (469) 886-8300!