October 24, 2018, 12:57 PM
Homeownership is a dream and goal of many Americans, and the right mortgage lender can put this in reach. But buying a home isn't as simple as placing an online order or even buying a car. There is a lot involved in this process.
This could be one of the most significant transactions that you will ever make, and it can get complicated. The good news is that this shouldn't scare you away because millions have done this before you and you have people in your corner that want to see you succeed.
One of those is your mortgage lender, and here are 10 questions you should ask to both ease your mind and make sure you have all of your financial ducks in a row for your upcoming home purchase.
1. How much money can I borrow?
How much you will be able to borrow isn't going to be the same as your co-worker or best friend. Your creditworthiness determines this figure. What does this mean? A lender will look at your income compared to the amount of debt that you hold. They will also consider other factors such as your employment status and credit history.
Speak to your mortgage lender about getting prequalified for a mortgage before you begin shopping for a home. This can simplify your experience. Also, ask about special mortgage programs for first-time homebuyers and military veterans.
2. What is my down payment requirement?
If you want to get the best interest rate on your mortgage loan, you should plan on committing at least 20 percent of the purchase price as a down payment. Lower down payments are certainly possible, but a loan like this might require that you also have private mortgage insurance (PMI).
The amount of down payment that you choose is going to impact such things as your APR, monthly payments, and loan term. Ask the mortgage lender what they require and find out if you qualify for any cost-saving assistance programs.
3. What is the interest rate on your loans?
Of course, you want to ask your lender about the interest rates on their mortgage loans. Find out about direct interest rates and have the lender give you the corresponding annual percentage rate (APR) for each loan. The APR will incorporate all loan-related charges, such as fees, so that you can get the most accurate picture of what you will pay to borrow money.
4. How are fixed rate and adjustable rate mortgages different?
You may be surprised to learn that there are many different types of mortgage loans. This is a benefit since you and your mortgage lender can customize a loan to suit your needs and financial situation. Ask your lender to explain their options.
A fixed-rate loan is going to charge you the same interest rate for the life of the loan, generally 15 or 30 years. This means that your monthly payment is never going to change. An adjustable-rate mortgage (ARM) has an interest rate that can go up or down based on market conditions and the terms of the loan. For example, a 30-year ARM might have a fixed rate for the first 5 years and then adjust annually.
5. How many points does the rate include?
Ask your lender if their loans have points and, if so, how many. Points are fees charged by lenders in exchange for a lower interest rate (1 point equals 1% of your total mortgage). Discuss the benefits of using or not using points in your mortgage with your lender.
6. When can I lock in my interest rate?
Interest rates can change, so it would be beneficial to lock in your interest rate if there is a possibility of rates going up. Ask your lender when you can lock in your mortgage interest rate and how long that rate lock is valid. Generally, lower interest rates are awarded to shorter rate locks.
7. What are the estimated closing costs on my loan?
There are many costs associated with buying a home, and closing costs can be steep. These include appraisal fees, attorney fees, and loan origination fees. Ask your lender to help you estimate these based on your home purchase price and the type of mortgage that you'd like to use.
8. Are there any other fees or costs that I need to know about?
It helps to be as prepared as possible when you buy a home and take out a mortgage. Have your lender give you an estimate of all the fees you will be expected to pay. They generally provide this on a Closing Disclosure form.
9. Can you tell me when my closing will take place?
Many of the factors that will determine your closing date are beyond your control. The mortgage, however, is a big part of the closing, so your lender can at least give you an idea of when their part of the equation will be finalized.
10. Are there any factors that could delay my closing?
There are also many things that can delay and derail a closing. Buying a home is a complicated process that involves many moving parts. The best way to avoid unwanted delays is to stay in close communication with everyone involved and provide each party with the documentation they require to keep the process moving towards closing.
City Bank Mortgage
Whether you are ready to buy a home or just have a few questions, City Bank is ready to speak with you about your options and its mortgage programs. We offer best-in-class experienced paired with competitive rates on a wide range of mortgage loans. Contact us now to start an application or discuss your next steps.
August 22, 2018, 9:18 AM
The news has been abuzz about the slow and steady uptick in interest rates recently. If you are ready to buy a home, now is the time. But, what if you are already own a home? Should you still consider refinancing your mortgage? The answer is "Yes!" This could be the perfect time to refinance your mortgage if any of the following apply to your situation or goals for the future.
1. Get a lower interest rate
It's almost always beneficial to refinance your mortgage if the new interest rate is going to be lower. This will reduce your monthly payment and require you to pay lower overall interest on the loan.
2. Change your loan term
One of the things that you can accomplish with refinancing is changing your loan term. You can shorten the term of your mortgage so that you will pay less overall interest and pay off your mortgage quicker. You can also lengthen the term, which could reduce your monthly payments.
3. Change your loan product
There are many ways that you can refinance a mortgage to change your loan product. For example, you can change from a fixed-rate to a variable rate loan, and vice versa. You can also change from a conventional to an FHA loan. You can also make a switch from a conventional loan to an interest-only loan, and vice versa. Which options are available to you and which are in your best interests will depend on your individual circumstances.
4. Alter your buyer profile
Has your income and credit score substantially improved since you first took out a mortgage? If this is the case, you may be able to secure much better terms by refinancing your loan.
5. Remove or add someone
If you are getting a divorce or have been recently married, you can refinance your mortgage to either remove someone from or add another party to the loan.
6. Consolidate multiple mortgages
If you have multiple mortgages on your home, the subsequent ones probably have high interest rates. Often, you can refinance your mortgage to consolidate all of those loans into one, with a more affordable rate.
7. Free up some cash
If you have equity in your home, you can refinance your mortgage and receive cash back. You can use this money for a variety of purposes such as debt consolidation or a major home renovation project.
Choose City Bank to Refinance Your Mortgage
Home loan refinancing can provide many benefits to homeowners. If you want to lower your rate, pay off your home sooner, or free up some cash, City Bank Mortgage can help.
Contact us today to learn more about your home refinance options. Either come into one of our locations, give us a call at 1-800-687-2265, or start your application online now.
July 26, 2018, 1:30 AM
The dream of homeownership is now even more attainable with a new program from Freddie Mac. In April, the nationalized housing agency rolled out one of its most generous programs since its similar move in 2015. If you want to buy a home and have either struggled to come up with a sufficient down payment or worry about income requirements, this could be the perfect opportunity.
Freddie Mac's HomeOneSM Mortgage
Freddie Mac is already known for having some progressive programs aimed at new homebuyers and affordable homes. Its recent program, called Home Possible, has a loan-to-value (LTV) cap of 95%. Another program, called Home Possible Advantage, raises the cap to 97%. However, both have income limits.
Now that there is a shortage of affordable homes, potential homebuyers are finding it more difficult to save for an appropriate down payment. In response, the agency has launched its HomeOne program, which also has an LTV of 97%, but no income restrictions.
What Are the HomeOne Mortgage Requirements?
While other mortgages have limitations based on geography and income, the new HomeOne program eliminates these restraints. You will still need to put 3% down on the home, meaning the LTV should be 97% or greater. Other features and requirements of this program include:
The home must be owner-occupied
Homes can be single-family, townhomes, and condos (no manufactured homes)
Must be a fixed-rate mortgage
Must be a home purchase transaction or a refinance (no cash out)
At least one borrower must have a minimum credit score (estimate of 620 or higher)
There is no minimum buyer contribution, meaning the 3% can come from gift funds
HomeOne will require buyers to carry private mortgage insurance (PMI)
One Borrower Must Be a First-Time Homeowner
Another requirement of this program is that at least one of the borrowers must be a first-time homebuyer. In general, this is considered to be a person that has not owned a property in the past three years. If both borrowers are first-time homebuyers, they will need to complete homeownership education before closing.
Contact City Bank Now to Discuss Your Mortgage Options
While it was announced in April, the HomeOne program will become available to homebuyers in July 2018. If you are ready to buy a home or are interested in researching your mortgage options, City Bank can help. We have access to Freddie Mac's programs as well as a variety of other mortgage products. One of our mortgage lenders can speak to you about your goals and help you choose the most beneficial mortgage.
Contact City Bank now to complete an application or receive answers to your mortgage-related questions.
*This is not a commitment to lend. All loans are subject to credit approval, terms and conditions may apply. Must meet all qualifications.
April 25, 2018, 1:23 PM
There are some attractive mortgage loans that don't require as much of a down payment as in the past, but you will still need to have some cash on hand to buy a home. Even with a low down payment loan, you may need 5%-10% down. Most experts, however, recommend that homebuyers put 20% down to avoid private mortgage insurance and other fees.
No matter which mortgage product you settle on, gathering funds for a down payment can be a challenge. Even so, this is certainly something that can be achieved with some careful planning. Here are just five simple steps that can help you bulk up your savings so that you'll be ready to make that home purchase.
1. Determine your budget. It's easier to reach for a goal if you define it first. Make a list of your "needs" and "wants" for a new home and then do some thorough research on your market. Find out how much a typical home costs that meets your needs and figure out your budget for a down payment.
2. Review your current savings. You may be tempted to tap into your existing retirement account or emergency fund to finance your home ownership dream, but this could be a mistake. It's important that you keep those items designated for their intended use. Instead, think about opening a new savings account that you will use solely for your mortgage down payment.
3. Cut back on expenses. Home ownership is a major accomplishment that could involve some sacrifices to achieve. This means that you should carefully examine your existing expenses and see where you can cut back for the sake of your dream. Maybe you don't need 500 cable channels for now and can do without the gourmet lunches for a while. If you want to go extreme, you could move into a smaller apartment and even think about taking in a roommate for a short period.
4. Boost your income. Another way to save for a house is to find new ways to make money - legally, of course. Get a second job that you can work weekends or in the evenings. Now that we have a growing gig economy, you can look into driving for a ride sharing service or even research ways to make some extra cash online.
5. Keep the change. If you are someone who shops with cash, it might be tempting to squander those loose bills and coins. These add up! Instead, set them aside and begin depositing the money into your down payment savings account. When you combine this technique with some of the others, you will reach your goal even sooner.
Open an Account to Begin Saving for a Home
If your goal is to buy a home, there is no better time than the present to begin saving to make that dream a reality. At City Bank, we offer a variety of products to help you achieve your financial goals including a personal savings account and competitive mortgage loans when you are ready. Open a savings account now or come into one of our local branches to discuss your options.
October 26, 2017, 10:08 AM
Mortgage rates are still low, and there is no guarantee that we won't see some rate hikes from the Fed in the coming year. There are many reasons that someone might want to refinance their home, some more common or obscure than others.
One thing that all homeowners need to consider is that there are costs involved with refinancing a home. As long as you are going to be in the home for a sufficient period, your new loan could recoup those costs through savings. Here are just ten reasons why you may want to consider refinancing your mortgage.
Lower your interest rate. Obviously, if interest rates are lower than when you originally took out your loan, you will probably get a better deal refinancing. This may not be the only way to benefit from refinancing, however.
Shorten/extend your term. Some people want to pay off their mortgage faster, so refinancing with a shorter term mortgage, such as a 15-year fixed, is a good choice. Or life’s circumstances may have changed where you want to extend your term and slow down the amortization.
Lower your payment. If you are just looking to free up monthly cash flow, you can refinance and do this in several ways. You can lengthen your payoff term or choose an interest-only loan.
Convert your loan. When you refinance your mortgage, you can convert your current loan from a variable rate to a fixed rate loan or vice versa.
Cash out equity. If you have equity in your home, refinancing can allow you to take out that cash to use for any reason you see fit. If you want to remodel or pay off some debts, this could be the solution.
Combine first and second mortgages. A common reason for refinancing a mortgage is to combine a first and second mortgage into one loan with more favorable terms.
Drop your PMI. If your home increases in value enough, you may be able to drop your PMI. Refinancing could allow you to both drop PMI and get a more favorable rate.
Remove a person from a loan. If you are getting a divorce or just otherwise want to buy someone out that is listed on a loan, refinancing can help you accomplish this.
Access special programs. At times, the government will produce special programs allowing for the refinancing of certain loans. These are often time-sensitive. If you qualify for one of these programs and it's to your benefit, you should apply.
Your buyer profile has changed. Assuming your original loan was just after a bankruptcy or foreclosure, your credit may now be significantly improved which would qualify you for more favorable loan terms through refinancing.
Refinancing Your Mortgage with City Bank
If you're interested in refinancing your current mortgage, find out how City Bank's competitive loans can help you meet your goals. City Bank Mortgage is an independent community bank that offers a full line of mortgage products including FHA, VA, USDA, fixed rate, adjustable rate, construction loans, and jumbo mortgages. Complete an application now or contact us to discuss your mortgage needs.
July 06, 2015, 1:07 PM
In the skyrocketing North Texas market, median home sales prices have hit the $200,000 mark for the first time. According to the latest data from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems, area home sales prices in April rose 14% over the same time last year to an all-time high of $207,000. Compared to prices from five years ago, the worst of the recession, the average price of a single-family home is now almost 60% higher.
The Real Estate Center findings come on the heels of a report by Wall Street analyst Fitch Ratings that found Texas has some of the most overvalued properties in the country. Fitch reports that Fort Worth home prices are overvalued by 9%, followed by Dallas at 11% and Austin at a whopping 20% above value.
A Seller’s Market
In addition to costing more, the data shows that preowned homes are not sitting on the market for long – an average of 46 days, a 13% reduction over 2014. That’s the lowest average number of days on market since records have been kept. With demand high and inventory low, the number of homes listed for sale with real estate agents was 15% lower than in April 2014, according to the Real Estate Center report.
Ted Wilson, a housing analyst with Residential Strategies Inc. in Dallas, notes that higher prices are motivating more homeowners to put their houses on the market. He also issued a warning that there might be troublesome times ahead. “It all works right now because mortgage rates are so low and it helps with these price increases,” Wilson said. “I just hope that we see household incomes pick up, or we will have a big jolt down the road when interest rates go up.”
Make Your Move with City Bank
Take advantage of historically low mortgage rates this year before they move higher. City Bank is your local mortgage loan company with the mortgage products and services you need, when you need them. Apply for a mortgage loan online today!
May 28, 2015, 1:07 PM
Things are looking brighter for the 2015 housing market as more millennials are ready and able to become first-time homebuyers. With rents rising at unprecedented rates, many from the youngest adult generation are looking to save money and settle into their own homes.
A continued market challenge during the post-recession period has been reduced and delayed household formation, with millennials living with parents or renting for longer periods of time due to economic uncertainty. Construction of entry-level housing stalled while builders focused on demand from higher-end buyers with stable income and savings for a down payment. Current data suggests that the construction of entry-level housing is increasing.
Entry-Level Construction Showing Signs of Recovery
Census data reports that the final median new home size in 2014 was 2,414 square feet, down from 2,478 square feet at the end of the first quarter. The decrease indicates a shift toward construction of smaller entry-level homes, and more attractive market conditions for the key millennial demographic. The National Association of Home Builders predicts that as more first-time buyers return to the market, typical home size will continue to post slight declines.
Millennials who are looking to buy a home are finding much more favorable conditions than just one or two years ago. In late 2014, Fannie Mae and Freddie Mac revamped lending guidelines to include the return of 3% down payment mortgages that make qualifying for a mortgage easier for young buyers. Industry experts also expect to see looser lending standards and a bigger selection of homes to choose from.
Apply for a Mortgage Loan Today
Your path to becoming a successful homeowner starts with competitive rates and a local lender to guide you through the process. City Bank is a leading provider of home mortgage loans in Texas and New Mexico. Bring us your dreams and we’ll help you realize them. Give us a call at (800) OUR-BANK or apply for a mortgage loan now.
May 13, 2015, 2:35 PM
The wonderful thing about home improvement is that it gives you the opportunity to incorporate special features and upgrades into your home that increase your quality of life, while also increasing your property’s overall value. Using a City Bank home equity loan or home improvement loan might be the smartest way to manage the expenses associated with making the upgrades you’re dreaming of.
Here’s what veteran real estate professionals have to say about the improvements that are most cost-effective and valuable.
- Kitchen & bath remodeling. Updated homes often sell faster, which makes renovating a dark, outdated kitchen or an ugly bathroom a money-wise investment. Even small improvements such as installing new fixtures, re-grouting the shower, adding crown molding and brightening up a room with fresh paint can do wonders.
- Refinancing. Interest rates are on the rise. If yours is among the estimated one in five households that is eligible to refinance a mortgage at record-low rates but has not yet taken advantage of this opportunity, visit with your local City Bank mortgage professional.
- Attic insulation. Not having enough attic insulation could allow nearly 30% of your heated or cooled air to escape through the roof. Adding insulation is a simple and relatively inexpensive project with big returns.
- Landscaping. While it’s commonly overlooked, landscaping is one of the top three investments that bring the biggest return. According to a 2007 survey of 2,000 brokers conducted by HomeGain, an investment of $400-500 dollars in landscaping could quadruple your return.
- Furnace/HVAC replacement. Replacing an old unit can give you an immediate increase in comfort and efficiency, and gives prospective homebuyers’ peace of mind.
Apply for a Home Improvement Loan Today
When it comes to real estate, sometimes you have to spend money to save money. By making smart home improvements, you’ll quickly recoup the cost of your investment with an increase in the value of your home. For more information about refinancing and home improvement and mortgage loans in College Station, contact City Bank at (800) OUR-BANK.
March 18, 2015, 1:20 PM
Although it did not experience the devastating housing bust that affected other parts of the country, the Texas housing market is likewise on the upswing. 2014 ended as the second-best year ever for real estate in the Lone Star State, driven by one of the highest fourth-quarter single-family home sales volumes ever and closing the book on a year-long trend of flat annual home sales growth.
This means that 2015 could be a very big year for the Texas mortgage market, thanks to an unemployment rate that is well below the national average. According to the Texas Workforce Commission, the seasonally adjusted unemployment rate fell to 4.6% in December, down 0.3% over November and 1.4% over a year ago. This was the lowest Texas unemployment rate since May 2008. Dallas-Fort Worth and Houston posted unemployment rates even lower than the state average. Texas is also expected to have the nation’s most aggressive annual job growth rate at 2.7% over the next five years, as forecast by Moody’s Analytics.
A Robust Year for Mortgage Lending?
“Texas home sales in the first half of 2015 are expected to be similar to what we’ve seen in 2014, but continued increases in home prices and record-low inventory levels should still continue,” said Jim Gaines, an economist with the Real Estate Center at Texas A&M University. With mortgage rates still low and expected to rise since the U.S. Federal Reserve announced that it would be ceasing its economic stimulus in October, potential homebuyers who have been waiting for the bottom could be enticed to jump into the market.
City Bank loan officers look forward to the year ahead, and are ready to help you achieve your 2015 home mortgage goals with the most competitive rates and fees. Home mortgage loans are simple with City Bank on your side! Request a free consultation with one of our experienced loan officers.
March 13, 2015, 9:54 AM
A slew of individual, business and energy tax breaks were set to expire at the end of 2014, but last-minute action by Congress and the president allowed for a one-year extension. The Tax Increase Prevention Act became official on December 19, 2014, giving businesses reason to celebrate extension of the research and development (R&D) credit and first-year bonus depreciation. Individual taxpayers will also enjoy more money in their pocket on April 15 with the following tax breaks.
- Deduction for private mortgage insurance. When you purchase a home and put less than 20% down, you must pay private mortgage insurance (PMI). Since 2007, homeowners who meet certain income limits have been able to deduct PMI paid on primary residences, and this incentive has been extended for another year. It’s a bonus for many homeowners, giving them the ability to deduct not only the interest they are paying on a mortgage, but also the PMI.
- Deduction of sales tax for no-income-tax states. The bill also extended a benefit for those living in states without income taxes, including Texas. State income tax is deductible on a federal tax return, but Texans may instead take a deduction for state and local general sales taxes paid in 2014. This deduction is beneficial for large purchases, such as a vehicle, and varies based on your residence and adjusted gross income. You’ll need to show receipts for the purchases you made.
- No income tax on cancelled mortgage debt. Normally people have to pay income taxes on forgiven debt. Those who lost their homes to foreclosure or did a short sale in 2014 can breathe easier knowing that they may be able to avoid a huge tax bill when they file their tax returns. The extension excludes up to $2 million of debt forgiven on a mortgage on a primary residence from gross income.
It is uncertain if these laws, which expired on December 31, 2014, will be extended for 2015.
Ready to Buy a Home in 2015?
Take advantage of historically low mortgage rates this year before they move higher. City Bank is your hometown mortgage loan company with the mortgage products and services you need, when you need them. Apply for a mortgage loan online today!
March 10, 2015, 2:12 PM
If the number of hotels going up in the area is any sign, Bryan-College Station is in for some major growth in the coming years. According to numbers from the Convention and Visitors Bureau, 15 hotels were added in Bryan and College Station in the last decade. As of late 2014, an additional nine hotels had either submitted site plans or applied for permits from Bryan or College Station, according to city officials.
The new rooms demonstrate the effects of economic growth, capital investment and low unemployment across the region, factors that are driving up demand for land, goods and services in and around the Brazos Valley. “We set a record last year with single-family home permits,” said Lance Simms, Director of Planning and Development Services for College Station. The city of College Station alone issued 753 permits for single-family homes in 2014. The city of Bryan reported that the number of building permits issued increased 87% over 2013, driven by more single and multi-family residential developments.
The construction boom is having a similar ripple effect on the sales of existing homes and property. The Bryan-College Station Regional Association of Realtors reports that for January 2015, total monthly sales were up nearly $10 million dollars from the same time last year, and more than $11 million over January 2013. The average number of days homes in the area are listed for sale fell to 115 days in January 2015, down from 135 in 2014 and 139 in 2013.
Last year, Forbes ranked Bryan-College Station at number two nationally for “Best Small Places for Business and Careers.” Bryan-College Station ranked number one in Texas. City Bank is pleased to help fuel continued growth in the Brazos Valley by providing a full range of real estate, mortgage and commercial loans to College Station and Bryan residents.
February 04, 2015, 1:51 PM
In late October, the Federal Reserve confirmed it will end the third phase of quantitative easing, which refers to the purchase of bonds to lower long-term interest rates. The $3 trillion bond-buying campaign was aimed at stabilizing and stimulating the economy in the aftermath of the Great Recession.
In the wake of the recent announcement, mortgage interest rates predictably began to rise. This is the signal for those who have not yet taken advantage of historically low interest rates to pull the trigger on mortgage refinancing. Despite the upward trend, today’s rates still remain extremely low.
One in Five Households Could Refinance
Millions of homeowners have already taken advantage of the opportunity to save by refinancing at record-low rates in recent years. Despite this appealing mortgage environment, millions more – an estimated one in five households – are eligible to refinance with minimal or no cost and save an average of $11,500 over the life of their loan, but haven’t done it.
Regardless of when you bought your home, you should consider your refinance options if you can reduce your mortgage rate by at least 1%. Use our calculator to find out how long it will take to break even on a refinanced mortgage loan. The Federal Reserve’s decision, combined with continued positive economic momentum, likely means the upward climb of mortgage rates won’t end anytime soon. The Mortgage Bankers Association expects the average rate on a 30-year fixed-rate mortgage to surpass 5% by the end of 2015.
Check Out City Bank’s Refinance Programs
To decide if this move is right for you, talk to a City Bank loan officer by calling (800) OUR-BANK or set up a free consultation today.
January 26, 2015, 1:56 PM
With mortgage rates still at enticingly low levels, the purchase of a home is on many Americans’ to-do lists for 2015. It’s true that the requirements to qualify for a mortgage loan remain stringent, but by educating yourself and preparing for this important step, the process really can be smooth and trouble-free. Here’s a simple, six-step guide to the home buying process.
- Determine your budget. In general, look at home prices that are two to three times your annual income. You should be able to pay a significant portion of the purchase price as a down payment and still have money available for emergencies and miscellaneous expenses.
- Get pre-approved. Contact lenders to begin the approval application process so you know how much you can borrow – and you can prove to a seller you are a qualified buyer.
- Shop for a home. Now comes the fun part! Browse online resources to find homes within your budget that meet your qualifications. Decide whether you will use a real estate agent to facilitate the purchase of a home. View as many houses as possible, and be objective about wants versus needs.
- Make an offer. Once you find a home that meets your needs and some of your wants, it’s time to make an offer. To decide on the right price, consider other home sales in the area, how long the home has been for sale and the local market conditions. If the seller will not accept your best price, be willing to walk away.
- Secure financing. Once a seller accepts your offer, closely review the contract and arrange for a home inspection. If there are no major defects, submit the mortgage application to secure financing.
- Closing day. This is when you sign all documents related to the purchase and get the keys to your new home.
If you’re ready to begin the home buying process, apply for a mortgage loan with City Bank. To find out what information is required during the mortgage process, view our Mortgage Checklist. Whether you’re buying your first home or your last, City Bank can help make your dreams a reality.