What is Mortgage Insurance?

If you are trying to obtain a mortgage with a small down payment (less than 20% of the total value of the loan), you may be required to pay for mortgage insurance.

Mortgage insurance is a type of insurance that is designed to protect home loan lenders should the borrower of the funds be unable to make the required payments on their mortgage. This could be because the borrower is no longer in the same financial situation and does not have the financial resources to pay or because the borrower has passed away. In either of these events, a mortgage insurance policy will ensure that the lender receives at least a portion of the difference between the funds they lent to the borrower and the amount the borrower has already paid back.

Mortgage insurance is typically required for borrowers that are borrowing 80% or more of the total loan value because mortgages with such high loan-to-value ratios are more likely to go into default.

Types of Mortgage Insurance
Depending on what type of mortgage you are obtaining – Conventional, FHA, VA, USDA, etc. – there are different types of mortgage insurance that may be required by your lender.

In some cases, private mortgage insurance, also known as PMI, may be required. PMI is a mortgage insurance policy through a private company. Initial fees and monthly premiums are typically lower with PMI but can vary based on down payment amount and the borrower’s credit.

In cases where the borrower is obtaining an FHA loan to purchase their home, the borrower will be required to pay for mortgage insurance through the FHA. FHA mortgage insurance does not vary much from borrower to borrower, as credit does not affect the cost of the policy.

Paying for Mortgage Insurance
Mortgage insurance can be paid as a monthly premium that can be added to your regular mortgage principal payments or it can be paid upfront as a lump sum.

The good news is that once you have paid off a certain portion of the principal balance of your mortgage, you will most likely be able to cancel your mortgage insurance policy.

If you would like to know more about mortgage insurance and whether you may be required to obtain a mortgage insurance policy for your loan, give the Kingwood Mortgage Guys a call today! We are always happy to help!

My Interview – Getting to Know Your Local Businesses – Kingwood

I had the honor of being interviewed for kingwood.com as a part of their series dedicated to getting to know more about the professionals who are involved in local businesses. As the original Kingwood Mortgage Guy, I am proud to have built the Kingwood Mortgage Guys from the ground up and to be able to share more about myself and my business with the local community.

I have lived with my wonderful wife and children since 1990. I made the decision to enter the mortgage industry as a loan officer and branch manager in 1997. During my time in this position, I began contemplating how I could best serve the people of Texas by finding them affordable options for their home financing needs. With this goal in mind, I started my own consulting business in order to better focus my time and energy on my clients and the mortgage lending process.

As you will see from the article that was posted on the Kingwood website, I concentrate the majority of my business on residential financing for purchase and refinancing loans. Within this focus, I am proud to offer my clients a variety of financing options that include, but are not limited to, Conventional, Jumbo, Cash Out, FHA and VA loans.

I am proud to have worked so hard to be in the position I am in now – a position that allows me to work one-on-one with each and every client. When my clients have difficulty qualifying for a loan, I provide my knowledge and experience as we work together to create a plan of action to help them get approved for their mortgage in the future.

My favorite part of the business I am in is being there to witness the joy on my clients’ faces when they are approved for their mortgages. This is especially true when their journey has been a long one that we have pushed through together.

To find out more about special promotions I am working on, the bi-weekly webinars I host, and my vision for the future of my company, check out the complete article here.

Loan Officers – What Should Realtors Expect?

6 Things Realtors Deserver in Their
Loan Officers

During a recent conversation I had with one of my trusted real estate partners, I discovered how frustrated she was with the service she has been receiving from a particular title company closing agent. We have both worked with this person in the past and are both now disappointed in the lowered level of service we have been receiving as of late.

Our conversation quickly turned into more of a discussion as to what we think could explain such decreases in service levels from the loan officers we work with. Could it be that they have gotten too busy, or that their support staff has changed?

We realized that, regardless of what had changed on their end, there are still certain things that Realtors deserve from their loan officers.

If you have no complaints about your current loan officer, this post is most likely not for you. However, if you have had some issues with your chosen mortgage professional lately, it might be time for some change.

The following list shows 6 things that every Realtor deserves from their loan officer:

1. On time closings
2. Weekly updates on the progress of the loan
3. Competitive interest rates
4. Closings on tough loans (Think low FICO)
5. Availability
6. Co-Marketing

Examples of marketing that Realtors and loan officers can do together are joint mortgage rate flyers and email video campaigns. They can also help each other with Search Engine Optimization by linking between each other’s websites.

If you are no longer happy with the loan officer you are currently working with, give me a call! I look forward to exceeding your expectations of what a loan officer should provide to their partners.

Kingwood Mortgage Guys | 1521 Green Oak Pl. # 197 Kingwood, TX. 77339 | Call 281-348-9899 Ext. 101 | Ask for Mike

The Woodlands Mortgage – October Market Update

The Houston real estate market has taken a large hit following the devastation caused by Hurricane Harvey. Many people have lost their homes and valuable possessions, and the market has lost its great traction as we were previously maintaining record-breaking trends.

Of course, it is too soon to judge the full impact of this natural disaster’s impact on our local real estate markets, but we have already seen some significant changes in statistics across the board.

The most recent report released by the Houston Association of Realtors showed that single family homes sales fell by over 25%, marking the first time single-family home sales have dropped in nearly a year.

The inventory of home that are currently listed on the market has gone up slightly as everyone is taking the time to assess the damage to their own homes and make decisions about what to do and where to go next. The current 4.4 month’s supply of homes on the market is expected to decrease quickly as more families who have lost their homes enter the market to start purchasing new homes.

The price of Houston homes has remained seemingly unaffected by recent events, with the average sales price of single-family homes rising to $296,418, an increase of 2.6%.

As mortgage professionals who live and work in Houston and the surrounding area, we are dedicated to helping our fellow Houstonians as we work together to navigate this incredibly difficult situation.

If you have any questions about your financing options following Hurricane Harvey and would like to discuss your situation with a qualified professional that has your best interests in mind, give The Kingwood Mortgage Guy a call today!

If you are in need of temporary housing while you figure out your next move, visit www.har.com/temporaryhousing or contact the Houston Association of Realtors.

Source: http://www.har.com/content/mls

The Three Phases of Credit Score Recovery?

What Phase Are You In?

1. You are currently late on existing credit bills and you are struggling to match your income to the amount you are obligated to pay each month.

2. You have recently let bills go to collections and you are operating on cash.

3. You have gone through the tough income problems, and you are coming back out on top. You have begun to stabilize your income and your outgo. You may have even started to save some money and you are tired of paying rent.

If you are in phase one and two, now is not really the time to begin your credit restoration.

When You Walk Away From Credit

A lot of times, when you walk away from credit, the only thing that is left on your credit report is the bad stuff that happened previously – the collections and the things you didn’t pay. Unless you do something about that, your credit score will stay low because there is no new, positive input.

Not Much To Do Until You Stabilize

If your income is not stable and consistent you should not worry about clearing up your credit yet. If you start working on your credit, only to have another series of late payments, it will only take longer to fix.

Give me a call today for more information about repairing your credit score!

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.


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.


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