For Home Buying Couples Who Have Good and Bad Credit Profiles

For Home Buying Couples Who Have Good and Bad Credit Profiles

This video discusses home loan scenarios involving spouses with different credit profiles. In other words, when one spouse has good credit and the other does not.

Scenario #1

In this scenario, the husband has a steady source of income and good credit, but the wife has poor credit.

Conventional Financing Rules
The best option for this situation is to take out the loan in the husband’s name. In this case, the wife would be listed as a non-borrowing spouse, so there is no need to pull her credit, and the loan will be based on the husband’s income and credit score. The wife will still be 50% owner of the property.

FHA Financing Rules
The rules for FHA financing are a little different than those of conventional financing. In this case, it is still the best option to do the loan in the husband’s name with the wife listed as a non-borrowing spouse. The loan will be based on his credit score, but the debts of both the husband and wife will be considered in the debt to income ratio. Judgments and collections for both parties will be considered and even though the loan will be based only on the husband’s credit, the wife’s credit will still need to be pulled. The wife will still own 50% of the property.

Scenario #2

In this scenario, the wife has a steady source of income and good credit, but the husband has poor credit.

Conventional Financing Rules
The best option for this situation is to take out the loan in the wife’s name. In this case, the husband would be listed as a non-borrowing spouse, so there is no need to pull his credit, and the loan will be based on the wife’s income and credit score. The husband will still be 50% owner of the property.

FHA Financing Rules
The rules for FHA financing are a little different than those of conventional financing. In this case, it is still the best option to do the loan in the wife’s name with the husband listed as a non-borrowing spouse. The loan will be based on her credit score, but the debts of both the husband and wife will be considered in the debt to income ratio. Judgments and collections for both parties will be considered and even though the loan will be based only on the wife’s credit, the husband’s credit will still need to be pulled. The husband will still own 50% of the property.

For more information about your loan options if you and your spouse have different credit profiles, contact Mike Durr, The Kingwood Mortgage Guy, at (281) 348-9899!

Help For Hurricane Harvey Victims – FHA 203(h)

Mortgage Insurance For Disaster Victims

Section 203(h) of the FHA program allows the Federal Housing Administration to insure mortgages that have been obtained through qualified lenders by victims of a catastrophe, such as the recent hurricanes Harvey and Irma. This program has been designed to help victims that need to rebuild their homes or purchase a new home in the aftermath of a natural disaster.

Purpose of the 203(h) Loan

Through Section 203(h), the Federal Government is able to help victims that are located within areas that have been declared disaster areas by the President. Section 203(h) makes it easier for residents of such areas to get mortgages and re-establish themselves as homeowners.

Type of Assistance

Section 203(h) provides assistance to those who are located in such an area and have either lost their homes entirely or whose homes have sustained enough damage that reconstruction or replacement of the home is necessary.

Financing

There is no down payment required for Section 203(h), meaning the loan can be 100% financed. The closing costs, however, as well as other prepaid expenses, are still the borrower’s responsibility. There are still a few options for these fees as they can be paid through premium pricing or in cash by the borrower or by the seller. The seller will be limited to 6% if they agree to take responsibility for these costs. FHA Upfront and monthly mortgage insurance will both be collected. The HUD sets the limit for each county in regards to maximum loan size for Section 203(h) loans.

Eligibility

Any homeowner whose home has been either destroyed or significantly damaged in an area that has been declared a disaster area by the President is eligible to apply for mortgage insurance under this program. The application for Section 203(h) must be submitted within one year of the disaster declaration by the President.

If you have been affected by Hurricane Harvey and would like more information about your mortgage options, give Mike Durr – The Kingwood Mortgage Guy – a call today at (281) 348-9899 or visit him at 1521 Green Oak Place, #197, Kingwood, TX, 77339.

NMLS# 318989

Kingwood Mortgage – How to Raise Your Credit Score


What We Will Cover


– How did you get where you are
– The different paths you have moving forward
– How to know if you are ready
– How to deal with collections
– How to deal with charge-offs
– How to deal with judgments
– How to deal with disputes

How Did you Get Where You Are?

We have found that most people with low credit scores have had some form of financial trauma in their financial past. No matter how recently this financial trauma happened, it can still be a difficult thing to overcome.

Examples of these financial traumas are health challenges, divorces, or lost jobs.

If you currently have a low credit score, you are most likely in one of these three categories:
1. You are currently late on your existing debts, which can include credit card bills, and you are struggling to cover the amount you are obligated to pay back.
2. You have let your bills go into collection and you are now operating on cash.
3. You have begun to stabilize your income to debt ratio and may have even started adding to your savings. At this point, most people become tired of paying rent.

How to Know if You Are Ready

You won’t be able to do much until you can stabilize your income. As long as your income remains inconsistent, clearing up your credit shouldn’t be a priority. Starting to work on your credit now will only put you further behind when your next set of payments are made late.

You are ready to start working on your credit once your income is stabilized. Once you have accomplished this, you can start by getting a secured credit card, possibly two. It is important to only use this card sparingly, keeping the balance well below your limit. We recommend spending less than $50 a month. It is also important to pay off most of your balance each month. You won’t get points for a zero balance, but you also don’t want to start racking up a large bill. We suggest paying off all but $5 – $10 a month.

How to Deal with Collections

The answer to this will vary based on the amount of the collection and how long it has been open. If the debt is two years or older, don’t do anything. If the debt is less than two year old, you should attempt to settle the debt or work out a payment plan.

How to Deal with Charge-Offs

If you don’t have the money to settle or work on paying off your debts, charge-offs may be an option. A charge-off refers to a debt that the lender is no longer attempting to collect. A charge-off does have a negative effect on your credit socre, so this option is not for those who believe they will most likely be able to settle or pay off the debt using a payment plan.

How to Handle Judgments

Judgments are a nasty collection practice that can absolutely have a negative impact on your credit score and can even be a deal breaker for a home loan. To qualify for your loan, you will need to ensure the judgment is completely resolved and obtain documentation from the county stating as such.

How to Handle Disputes

Disputes are a way for borrowers to challenge what has been reported by the creit bureau on their creidt report. This is a useful way to remove incorrect information that is listed on your credit report and is negatively effecting your credit score. The credit reporting agency will have 30 days to investigate your dispute claim.

To find out more about how to raise your credit score from 500 to 700, contact Mike Durr, The Kingwood Mortgage Guy, at 281-348-9899!

Why This May Be the Best Time for Texans to Refinance Since 2016

Timing Is Everything!

Do you want to know why now is the time to refinance?

Find out the benefits of refinancing, when not to refinance, and why we believe now is the best time to refinance by reading more below.

Why Is This A Good Time To Refinance?

While we have begun to grow accustomed to relatively low interest rates, those rates now appear to be rising. As these rates begin to rise, you could be looking at your last chance to refinance before rates become too high.

What Are the Benefits of Refinancing?

– Lower interest rate
– Lower monthly payments
– Shorter term
– Debt consolidation (lower monthly payments for combination of debt)
– Take advantage of equity (home improvements, college tuition)
– Tax benefits
– Correct flawed escrow account

When is the Wrong Time to Refinance?

It is most likely the wrong time to refinance your mortgage when interest rates have gone up, when your monthly payments would increase, when the length of your term would increase or when you plan to move in the near future.

All of these would cost you more money than what you are currently spending, making refinancing your mortgage a pointless option.

Smart Reasons to Refinance

Has your credit score recently gone up? A better credit score is a smart reason to refinance your mortgage so that you can qualify for a better rate.

Getting out of an adjustable rate or getting rid of mortgage insurance and two more smart reasons for refinancing your mortgage.

Refinance Bonuses

In addition to lower rates and monthly payments and shortened terms, by refinancing your mortgage, you may be able to skip at least one mortgage payment and you will get a check for your previous mortgage escrow account.

These two bonuses should cover any fees associated with refinancing your mortgage.

Refinance Example

KP buys a home in December 2013 for $328,000 at a 4.5% interest rate
The loan is 80/15/5 – combo
The payment on the first mortgage is $1,329.79
The payment on the second mortgage is $421.93
The total principal and interest is $1,751.72

In June of 2015, the property value of the home increased to $400,000 and interest rates dropped to 3.75%
80% loan to value
Refinance —-
The payment on the first mortgage $1,435.66
No second mortgage
The NEW total principal and interest is $1,435.66

KP saves $316.06 a month, $3,792.72 annually.

If you believe you might benefit from doing a refinance, I encourage you to call the Kingwood Mortgage Guys at (281) 348-9899.

We will run the numbers for you to see if refinancing would be beneficial to you.

There is no obligation and no cost to find out!

Woodlands Mortgage | How To Keep Divorce From Destroying Your Credit

In this second video installment on how divorce can affect your credit and mortgage options, we are going to cover what you should discuss with your attorney, how divorce can affect your debts and your credit and how to protect yourself if your ex-spouse doesn’t pay.

In this video, you will also learn about 9 tips for dividing your credit card debt as well as 5 steps on how to make a clean split.

Checklist: What to Discuss with your Attorney

The actual checklist is lengthy, so the list below is a modified version. Call us to get the full list!

*Custody and Control
*Assets and Liabilities
*Outstanding Credit
*Spousal and/or Child Support

What Happens to Our Debt If We Get Divorced?

The answer to this question will depend on whether or not the account is solely in your name. Your responsibility for the debts following your divorce will vary under different circumstances, such as if the debt is solely in your name or if you are just named on the account.

Texas is a community property state, which will be taken into consideration by the court who has the ability to assign the debt to one or both parties.

The creditor is under no obligation to remove you from the liability, meaning you may still be held responsible for the debt.

How to Protect Yourself if Your Ex Doesn’t Pay

It is best to go into a divorce with no debt because debt adds even more complexity to an already complex situation. If going into your divorce debt-free is not an option and your ex-spouse doesn’t pay, you do have a few options. You can petition the court to enforce the divorce agreement or refinance secured loans.

9 Tips on Handling Credit Card Debt

1. If you don’t have a credit card in your name, get one now!
2. Inventory all of your jointly held credit cards, then pull a credit report.
3. Call your credit card companies to get the current balances on all of your credit cards.
4. If possible, sit down your spouse, discuss your current debt and create a plan to handle it.
5. Check your credit every 3 months in order to monitor your debt during the divorce process.
6. If you can’t sit down with your spouse to discuss the debt, enlist a professional financial planner or mediator.
7. If you are the one who will be moving out of the home, make sure to notify the credit card companies and all creditors.
8. Whatever the resolution is, don’t back off. Make sure it is implemented.
9. After your divorce is finalized, maintain the credit monitoring service until you have been divorced for 2 years.

5 Steps on How to Make a Clean Split

1. Cut off or cancel future charges.
2. Find a way to pay off your joint debts.
3. Look for and shut down any old accounts that may have been forgotten about.
4. Transfer the balance – If one party agress to assume a debt, rather than taking their word for it, move the debt over to an individual account using a balance transfer.
5. Create backups – Include a provision in settlement agreements that labels the debt as non-dischargeable. This will prevent your ex-spouse from filing back against their obligations, leaving you with the hassle of creditors.

If you have any additional questions regarding the subject matter in this video, feel free to reach out to either Mike Durr or Gabe Winslow at 281-348-9899. The office is at 1521 Green Oak Pl. # 197 Kingwood, TX. 77339

Divorce And Property Considerations In Houston – Video #1

In part one of the Divorce and Property Considerations In Houston series, we cover the answers to 6 common questions about homes and financing as they relate to divorce.

If you are filing for divorce, you may be wondering, “What should I do first?”

Our recommended first step is to compile all relevant documentation. This will include information about your retirement accounts, bank statements, pay-stubs, and any additional information that is related to both your individual and joint assets.

You should also run a credit check at this time. Pulling your credit report will help you determine existing debt and any other ongoing financial obligations.

Of course, it is always recommended to work with a professional. They will be able to help make sense of all the information you have compiled and get you going on the right track.

Real Estate And Divorce – Kingwood Mortgage

Question #1

What if I want to stay in my current home?

If you want to stay in your home, it is important to consider what is involved with that decision. Make a note of the future responsibilities that will be involved with keeping your home. Maintaining a home involves a great deal of financial consideration, so be sure to consider the following before you make your final decision:

1. The size and location of your current home.
2. The remaining balance on your current home. (Also consider interest rate)
3. The cost of insurance and paying taxes on your current home.
4. The recurring costs of utilities and HOA fees, as well upkeep and unexpected maintenance.

Question #2

How do we split the equity in our home?

You must first determine how much equity exists. Once that step has been completed, there are a few different options when it comes to splitting up that equity. A real estate professional will be able to guide you through each option to find the best fit for your situation. Some of the options they may discuss with you are Owelty liens or cash out refinance transactions. Of course, you can always come to a compromise on the division of the other assets as well.

Question #3

Will I qualify for a mortgage after I am divorced?

If you are contemplating whether or not to keep your home, speak with a trusted real estate professional right away. Since you will now have to qualify on your own terms for the mortgage on your home, it is important to gather as much information as you can about your own individual qualifications for a mortgage before you decide to maintain possession of your home. Your credit, income and assets will be analyzed and evaluated to ensure you don’t take on an obligation that you won’t be able to afford.

Question #4

How will I be affected if I am the one leaving the house?

If your spouse has been awarded your home in the divorce decree, there are a few important things you should know as you are moving out of your home:

1. Even if you have signed away the deed to your home, or a divorce decree awards ownership of the property to your former spouse, and you are no longer an owner of the property, you are still obligated to pay back your mortgage.
2. Keep this in mind from the beginning because any missed mortgage payments will negatively effect your credit score.
3. An existing mortgage can potentially have an adverse effect on your ability to get another home loan for the property you plan on moving to. This can also affect your ability to qualify for a car, credit card, etc.

Question #5

Will I be able to get a new mortgage following my divorce, even while I am still listed on my old mortgage?

The answer to this question, in most cases, is yes. You can get a new mortgage while still listed on your old mortgage, as long as you can qualify for your new mortgage on your own. Once you are divorced, only your income, assets and credit will be considered.

While it is possible, it can be more difficult to get a new mortgage, so make sure you disclose the fact that you are still listed on another mortgage before you begin the process on your new loan. This can help your mortgage professional come up with best strategy for moving forward with your new mortgage.

Question #6

Will I be able to buy another home before my divorce is final?

This answer is not as straightforward as some of the others. In order to purchase a new home before your divorce is final, you will still have to qualify for the mortgage to purchase your new home on your own merits.

In Texas, which is a community property state, your soon-to-be ex husband or wife, will have an ownership interest in any property that is obtained during the marriage. This includes any property that is purchased before your divorce is finalized.

If you decide to purchase a separate home before your divorce is final, your spouse will need to sign specific documents that are required of married but non-participating spouses and transfer their ownership interests to you once the divorce has been finalized.

As Houston and Kingwood mortgage experts, we would love to be your go to resource for any questions you might have about keeping your home and finances safe while you are going through a divorce.

We can help with an analysis of credit and obligations.

We can help you determine what your house is worth when determining a split of equity.

We can help you qualify for a loan to refinance your existing house or to purchase a new house.

We have a vast network of referral partners to compassionately help you in this time of need.

Call the Kingwood Mortgage Guys @ 281-348-9899 or visit us at 1521 Green Oak Pl. # 197, Kingwood TX, 77339

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