Riverstone

A Fort Bend area master-planned community where luxurious homes, water features and resort-style amenities define the landscape, Riverstone is one of Fort Bend County’s most desirable addresses. Riverstone residents enjoy an enviable lifestyle with a superb selection of new homes with Sugar Land and Missouri City addresses. Plus, with varied highway access and an array […]

Sienna

Sienna is a comprehensive 7,000-acre master-planned community. Sienna is more than houses inside one of the top Fort Bend County subdivisions. Neatly tucked between the acclaimed cities of Missouri City and the City of Sugar Land, it is a community in the truest sense of the word. Every effort is made to maintain a sense […]

Bridgeland

Imagine a place with vast open spaces and spectacular sunsets. An 11,400 acre master-planned community in northwest Houston where flocks of waterfowl glide across natural lakes. A refuge from the chaos of your workday. A place where you can find true balance. The new home community of Bridgeland is such a place. Bridgeland attracts and […]

Towne Lake – Master Planned Community, Cypress

Towne Lake reflects its Texas-sized appeal in a 300-acre lake, with beautiful views. Lake coves allow neighbors easy access to the water and to the many amenities and destinations throughout, bonding the community together. Towne Lake Charm is all these things and more, reflected in a community steeped in Texas pride. Caldwell Companies has perfected […]

Cypress Creek Lakes

Cypress Creek Lakes is a beautiful master-planned new home community nestled in the charming Northwest Houston suburb of Cypress, Texas. Mischer Development has carefully designed the 1,600-acre community to respect the natural beauty of the land while developing approximately 2,000 new home sites. Its convenient location on Fry Rd. just off of Highway 290 also […]

Houston: 51% cheaper to buy than Rent

Posted by houstonvijai on September 28th, 2012

Here is another report from Trulia which was released this month taking the summer 2012 real estate market condition. This report is great for people who are in sidelines waiting for the market to turn around and still thinking whether to Rent or Buy. The cool thing about this report and infographics associated is that it helps the consumer to determine whether they can buy or rent taking into account their location, income tax bracket, how long they will stay in the home and possible mortgage rate they expect depending on their credit situation.

As per Trulia’s analysis and calculation methodology used in this report, below are few snapshot of results.

Houston still holds the strong BUY signal with 51% for the assumption considered.







You can also try your hands on playing with different parameters as per your situation and find out whether it is right decision for you to buy or rent using the infographics.

It may seem the buying house is cheap in many parts of the country except few metros but the question arises why not many people buying them. Here is the plain blank truth from the chief economist who put together an article analyzing the report.

Home sales are still less than halfway back to normal, and the homeownership rate continues to fall. The big obstacle holding back renters who want to buy is the down payment – even more than getting a mortgage. And keep in mind, in the metros where the cost of buying is less than half of what it would cost to rent over the long term, it still takes years to save enough for a down payment. It may be 56% cheaper to buy than to rent in Denver, for instance, but it takes more than 8 years to save enough for a down payment there. And high unemployment during the recession made it even harder than usual for people to save for a down payment. On top of that, people who lost their homes or took on lots of debt might not qualify for a mortgage. Bottom Line: Buying may beat renting in every major metro by a wide margin, saving consumers thousands of dollars a year, but buying still remains out of reach for many would-be homeowners.

I am in total agreement with him. People don’t have money to buy houses and takes more time to save for their down payment to buy houses. In the after recession economic condition we are in currently, more than 40 million people are out of work so it is going to take lot of effort to get going on housing only if the economic starts move in stead fast pace again. Let’s hope for the best in 2013.

People who are employed and saved down payment, check out and see whether you live in places which is better to buy than Rent. Start thinking about getting your house since it’s damn good time with low interest rates which won’t linger for long. Especially Houstonians who are better position compared to other metros on employment perspective, be aware home prices are going up all around the city and don’t wait any more…

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Home Buyers: How credit inquiries affect your FICO score while shopping for good rates?

Posted by houstonvijai on September 21st, 2012

Many new home buyers are worried about their credit score during their loan shopping. By default I get a question from them, whether my credit score will get hit every time I get pre-approval from a lender. My simple answer, if its within 30days it will all be counted as one inquiry but after 30 days it will be counted as new inquiry and hits your score again. But I thought it would be good to explain more in detail to get some perspective on this matter.

Hard Inquiries vs Soft Inquiries

I am sure you might have heard about Soft and Hard inquires. Self inquiries, such as ordering a credit report for your own use, don’t affect the credit score. Neither do inquiries from your existing creditors, potential employers, or businesses considering whether or not to solicit you. These are sometimes called “soft inquiries”. The inquiries that may affect your credit score are those by new credit grantors to whom you have given your social security number along with explicit authorization to check your credit. These are “hard inquiries”.

Being said about two types of inquiries, you only need to be concerned about Hard Inquires. While shopping for a loan do multiple inquiries considered separate was our initial question. To get to an answer, let me explain about two credit scoring rules developed by Fair-Isaac, which pioneered the development of credit-scoring models, are designed to protect the scores of borrowers who shop multiple lenders for the best deal.

IGNORE RULE

The “ignore rule” is that “the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring.” The 30 days includes the day of the score, which is not evident from the wording. It is a good rule but borrowers are not warned about other types of credit that are not ignored. A very important one is credit cards, credit card inquiries are considered separate than loans. Also Mortgage borrowers today face the hazard that the 30-day period can expire while their loan is still being processed. If the lender decides to recheck the borrower’s credit, which some do as a standard practice, the mortgage inquiries that had previously been ignored, will then hit the score.

CONSOLIDATION RULE

The “consolidation rule” is that “the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score.” The consolidation rule is expressed in such a way that most readers interpret it to mean that mortgage, auto and student loans are consolidated together. That is how I read it originally. In fact, what it means is that all mortgage loans are consolidated, all auto loans are consolidated, and all student loans are consolidated. If you shop for one of each type, they constitute 3 inquiries.

Here is a short video which I came across through my linked-in network which explains whether credit inquiry affects your score. He explains how ignore rule and consolidation rule works together for the benefit of the consumer.



To conclude, borrowers shopping for loan should minimize the number of hard inquiries by ordering their own score, which does not count as an inquiry, providing that score to all the vendors they shop. You tell them that they can check your credit when you are ready to authorize it. This will reduce the number of hard inquiries to one, from the vendor you finally select. And do not seek new credit cards during the period you are shopping for a loan.

Some content courtesy: mtgprofessor.com

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Inspiring Story from a 14 year old landlord – Check it out

Posted by houstonvijai on September 13th, 2012

I came across this video from a co-blogger post(mymoneyblog.com) which is part of Ellen’s show and I immediately wanted to share with you all.

I have seen many clients who has money and wanted to invest in real estate but just hesitant about it. They keep looking at houses but never have the courage to take the first step to dive into real estate investing. Look at this young lady who bought a house for $12000 in short sale in Florida. The 3-bedroom house is now rented out for $700 a month! The house was worth $100,000 during the real estate bubble.

As a teenager instead of spending money in cellphones, video games or other junk stuff, she saved money which she earned from offering move-out cleaning service for new investors and looking for deals from garage sales and resells them for a profit on Craigslist. With the saved money of $6,000 cash, she partnered with her mom (a real estate agent) who put down $6,000 to get this house.

Isn’t amazing for her? She now has a passive income and can build on it. It helps to have mom as a real estate agent but still she thought about the idea and jumped into it when she got the chance. That’s the spirit of entrepreneurship. I hope to teach some real estate to my son some day and may be he will buy houses one day. Will see… Anyway, people who been waiting on side lines take this as an inspiration and start thinking about really getting into the waters and trying it out.

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Must Know – Home Buyers & Sellers: Demystifying HUD-1 Final Settlement Statement – II

Posted by houstonvijai on September 7th, 2012

In the last part we looked at the HUD-1 statement Buyer section in detail. Similarly let’s look at Page-1 right side, Seller breakdown for Seller’s perspective:



1S – This section represents the amount which seller should receive from this transaction which are paid by the buyer.

1.1S – This section represents all credits to Seller connected with already paid taxes.

2S – This section reflects all deductions like option fee, current mortgage payoff and settlement cost related to the transaction. An important point about Line 504 shows the amount of the seller’s mortgage loan payoff, and that most all loans are paid “interest in arrears” so payoff will include the principal balance and accrued interest to the date it is normally received by your lender. Title companies have to insure that adequate monies are collected for this purpose and the payoff will normally include 3-5 days of interest and your lender will refund the excess.

The payoff statement will not include a credit for any monies you may have in your escrow account. These monies are handled separately and will usually be sent to seller 2-4 weeks after the loan is paid in full.

2.1S – This section is related to tax amount owned by the seller for the current year which is paid to the buyer so buyer will pay the tax when time comes. Seller is not obligated to pay the tax at the time of closing.

3S – Finally this line reflects the total amount which seller suppose to receive in cash at the end of closing.

Let’s take a look at Page-2 to understand some breakdowns which make up Page-1 totals.


As mentioned earlier, Page 2 of the HUD statement reflects the subtotal of all the buyer’s closing costs and related charges and the same for the seller.

Line #700 series is related to the seller reflecting the total commissions paid to the Realtor.

Line #800 series reflects the closing costs owing to the lender by buyer and these should reflect the GFE “Good Faith Estimate” that the lender is required to give to borrowers during application. Usually these numbers might have difference from the GFE.

Line 901 will reflect the interest owing by buyer from the date of closing through the end of the closing month. Then the first payment will normally be due the following first of the next month succeeding. If buyer has agreed to or is required to establish an escrow account the initial deposit will be reflected in Lines 1001 through 1008. Now switch your attention to Line 1008 “Aggregate Adjustment Analysis”, which represents a mandatory test that lenders and title companies must perform to insure that the minimum amount is placed in escrow since the lenders don’t normally pay interest on escrow monies. If Line 1008 indicates 0.00, this means the test was performed and the correct amounts were escrowed. If Line 1008 reflects a negative number this means that the test results mandated that too much was placed in escrow and the adjustment was made to insure compliance with this regulation.

Lines 1100 through 1113 reflect all the closing fees, including such things as:
Settlement of closing fee, Title Exam, Title Insurance Binder: (this is the fee that is required for the title company to issue any title insurance policy, either for the lender or for a buyer buying an owner’s policy.

The 1200 series reflects the charges imposed for the title company to deliver and record the deed and/or mortgage. Home warranty payments will be reflected on Lines 1303-5 or alternatively on Line 507 on Page 1.

Line 1400 reflects the subtotals of all the charges for both buyer and seller and will be carried forward to the Page 1.

The last Page-3 of the HUD-1 statement is the comparison of actual charges with GFE(Good Faith Estimate) provided by the lender to the Buyer and explaining the monthly mortgage amount. Good Faith Estimate with expected closing costs should be provided by lender when you make application for your loan. It is a requirement, and you should ask for it if your lender is not providing one for you. Here is a sample of the Page-3.

Here a youtube video from a lender which explains the HUD-1 statement in detail.



It is very important to understand the HUD-1 statement before closing so you can cross check every amount and make sure everything is accounted accordingly. There are chances for mistakes from title company since they do many closings a week. It is your responsibility and agents duty to help the client to cross check the HUD statement before closing and get ready for the closing.

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Must Know – Home Buyers & Sellers: Demystifying HUD-1 Final Settlement Statement – I – Buyers Section

Posted by houstonvijai on September 1st, 2012

Any Home transaction will never be complete without HUD-1 Final Settlement Statement whether you are buyer or seller especially if lender is involved. The HUD-1 is required under Section 4 of RESPA and Regulation X of the Department of Housing and Urban Development (24 CFR part 3500). The HUD-1 is to be used as a statement of actual charges and adjustments to be given to the parties in connection with the settlement. It has to be prepared by the Title company working with lender if one involved in the transaction and builder if it’s a new home.

The HUD-1 has to be provided to the Buyer atleast 24 or 48 hours before closing. But it never happens all the time. Sometimes they are sent to them just few hours before the closing and buyers/seller don’t have enough time to go through them to make sure all cost appears as accounted by the respective parties. Below is the sample HUD-1 Page 1 with some markings for easy understanding on the explanation.


Every HUD-1 statement is split into two sides, the left side for the buyer and the right side for the seller. The second page has detail breakdowns of the subtotals from Page 1.

Let see Page-1 left side, buyer’s breakdowns first which is marked as 1B, 1.1B, 2B, 2.1B and 3B.

1B – This section which starts from Line #100 reflects buyer amount due from purchase/sale price, personal property like washer, dryer or any involved in the transaction and settlement charges(total at Line 1400) from Page 2. Quick Note on Personal Property – Most mortgage lenders are very sensitive to having items of personal property included in a loan transaction since they are limited to making loans on real property alone. Most likely the personal property transaction are handled outside of this transaction or the amount gets added to the buyer’s cash needed to close.

1.1B – This section starts at Lines #106 showing items owed by Buyer for seller prepaid taxes or HOA fees if any. Lines 120 reflect total sums owing by Buyer.

2B – This section shows all credits to the Buyer starting from Line #201 like earnest money paid by the Buyer at the time of contract signing. This section also will have any Realtor contribution or seller contributions towards closing cost.

2.1B This section starts from Lines #210 reflecting tax proration credits to the Buyer. Buyer gets County, MUD, School tax credit from Seller for the time period he owned the property for that year so seller don’t have obligation to pay when time comes. It will be the obligation of the buyer to pay the tax for that tax year when time comes for the full year.

3B – This final section at Line #300 will show the final amount the Buyer should bring to the closing. It is the amount Buyer should take cashier check or wire transfer to the Title company. This amount is derived by subtracting Line #220 from Line #120.

Summary
Let me point out few important things to check out in the HUD Final Statement,

  1. Check whether the Settlement charges in Page-2 is properly listed in section 1B.
  2. Don’t forget to check the earnest money and option fee if any is credited in section 2B.
  3. Make sure taxes are probated and credited correctly as of Closing date in section 2.1B
  4. If Realtor is contributing, make sure there is an credit entry in 2B section. It might say Builder contribution if you are purchasing a new home.
  5. Arrange to get a cashier cheque(your bank should issue one for free) or wire transfer for the amount in the section 3, nothing more.

That concludes the Buyer section on the Page-1, we will see the Seller’s section and Page-3 of the statement in the next post.

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