Episode 73: First-Time Home Buying with Vicki & Michael Chuck

In this episode, John Schutze is joined by Horizon Realty's Team Chuck, with Vicki and Michael Chuck. The duo will be hosting a first-time homebuying seminar near the end of October - listen in for more details and a timeline you should follow when considering purchasing a home in the next year.

Did you know?

If you have not owned a home within the last three years, you are considered a first time homebuyer, which is a great thing!

"If you have questions about buying your first home, we will be hosting a first-time homebuying seminar," Michael Chuck says. "The event will take place Wednesday, October 26th from 7-8pm at the Cedar Park Library located at 550 Discovery Blvd off 1431. If you are coming to the seminar, you’ll find out information about why you need a real estate professional in your corner, how to find the home that is perfect for you, and how much home you can afford. Plus, we'll have door prizes!"

"We’ll also talk about some great down payment assistance programs that are out there," John adds. "We’ve got some programs where you can make six figures and still get assistance! Rates are so amazing right now that it’s just the time to buy."

“Rents keep going higher and so are home prices, so the best time to buy is right now,” Vicki says. 

“I don’t think the prices are going to go down anytime soon,” John adds.

“The Austin area is phenomenal – I’m talking to a few agents in California, and the tech jobs are definitely moving here.”

If you have questions about purchasing a home for the first time or would like to start the process with a professional real estate agent, please contact Vicki or Michael Chuck at (512) 903-7102 or visit www.teamchuck.realtor

Great Timeline for Buying a Home:

12 Months Out

Check your credit score.  Get a copy of your credit report at annualcreditreport.com.

The three credit bureaus (Equifax, Experian, and TransUnion) are each required to give you a free credit report once a year.

Determine how much you can afford.  Lenders look for a total debt load of no more than 43% of your gross monthly income (called the debt-to-income ratio).

Make a down payment plan.  Most conventional mortgages require a 20% down payment. FHA offers loans with only a 3.5% down payment.

9 Months Out

Prioritize what you most want in your new home.  What's most important in your new home? Proximity to work? A big backyard? An open floor plan? Being on a quiet street?

Research neighborhoods and start visiting open houses.  This is where you can use the services of your Realtor to efficiently find homes for you.

Budget for miscellaneous home buying expenses.  Start the good habit now of putting a little aside each month to fund maintenance, repairs, and home emergencies.

6 Months Out

Collect your loan paperwork.  Banks are very particular when it comes to mortgage loans, so it's important to speak with a lender to determine what they will need to provide a loan.

3 Months Out

Get pre-approved for your loan.  At this point, if you've been following this timeline, your credit score, paperwork, and down payment should be on track.

Start shopping for your new home.  One you're pre-approved, your Realtor will be able to target homes that meet your priorities in your price range.

2 Months Out

Make an offer on a home.  It usually takes at least four to six weeks to close on a home.


The Chuck Team in action on TALK 1370AM! 

The Chuck Team in action on TALK 1370AM! 

Episode 72, Part 2: The Double Up Mortgage

We all know it can be hard to afford a home in the expensive Austin market right now, so why not buy a home with a friend and save on rent? Listen in to hear more about the Double Up Mortgage and why you may want to give it a try.

"It's really almost no different than buying a home as a married couple," Loan Officer Andrew Thurston says.

"We review the credit, income, and assets the same as we would with any couple, and there's almost no negative with it," John Schutze says, though fellow loan officer Kristi Rendon reminded us that it is much more serious to be getting a mortgage with a friend than it is to just sign an apartment lease - though legal agreements could be drawn up to help, if necessary.

"However, people in the millennial age range don't usually consider buying a house with their friend - and it's a great kickstart to start earning equity so when they do leave that house, they can create a nest egg for their next home," Kristi says.

Loan programs such as Fannie Mae's Home Ready Program are also available, which allow you to count income from your roommate to qualify for the property - without them having to sign the mortgage. 

KEY FEATURES OF THE HOME READY PROGRAM: 

Low down payment: Up to 97% LTV financing for home purchases.

Flexible sources of funds: 

  • Can be used for the down payment and closing costs with no minimum contribution required from the borrower’s own funds (1-unit properties).
  • Income from non-borrower household members considered as a compensating factor in Desktop Underwriter® (DU®) to allow for a debt-toincome (DTI) ratio >45%, up to 50%.
  • Rental unit and boarder income.
  • Non-occupant borrowers, such as a parent.
  • Borrower is NOT required to be a first-time buyer. 
  • Gifts, grants, Community Seconds®, and cash-on-hand permitted as a source of funds for down payment and closing costs.

Affordable and cancellable monthly MI: Reduced MI coverage requirement above 90% LTV; cancellable MI per Servicing Guide policy.

Homeownership course: The online Framework® course prepares borrowers for sustainable homeownership; other education and advising options are available.

Nontraditional credit is allowed: Supports manufactured housing up to 95% and HomeStyle® Renovation (approved lenders) up to 95%


If you are now considering purchasing a home with a friend or significant other, please feel free to contact John, Andrew, or Kristi or call (512) 524-8310 to learn more about how we can help!

Episode 72, Part 1: Is It Cheaper To Rent or Own a Home in Austin?

The Schutze Team debates: Is it now cheaper to rent a home in Austin than buy? Listen in and let us know which side you're on!

With the pricey market in Austin right now, the Schutze Team is divided on whether it's cheaper to rent an apartment or buy a home. Our loan officer Andrew Thurston believes the long-term benefits of owning a home outweigh the upfront cost, but the rest of the team thinks that it's just flat-out much more expensive to purchase a home in the current market than to rent an apartment until home prices level out.

Andrew's reasons for why you should buy a home instead of rent:

  • Tax Benefits: Buying a home may help reduce your overall federal tax payment due to mortgage insurance being tax-deductible
  • Long-Term Appreciation/Build Equity: When you own a home, you are earning equity and a future nest egg that you can't earn by renting an apartment

"It's a sales tactic to tell people that you can buy a home for the same monthly payment that you pay for rent, and that's just not true in Austin right now," John says. 

What do you think? Is it worth it to buy a home in Austin right now? Weigh in in the comments, or give us a call at (512) 524-8310!

Fannie May's Home Ready Loan Program

We've got great news for buyers with lower and moderate incomes! Thanks to a new product from Fannie Mae, creditworthy borrowers with lower incomes can now access an affordable mortgage. 

Key Features: 

Low down payment: Up to 97% LTV financing for home purchases.

Flexible sources of funds: 

  • Can be used for the down payment and closing costs with no minimum contribution required from the borrower’s own funds (1-unit properties).
  • Income from non-borrower household members considered as a compensating factor in Desktop Underwriter® (DU®) to allow for a debt-toincome (DTI) ratio >45%, up to 50%.
  • Rental unit and boarder income.
  • Non-occupant borrowers, such as a parent.
  • Borrower is NOT required to be a first-time buyer. 
  • Gifts, grants, Community Seconds®, and cash-on-hand permitted as a source of funds for down payment and closing costs.

Affordable and cancellable monthly MI: Reduced MI coverage requirement above 90% LTV; cancellable MI per Servicing Guide policy.

Homeownership course: The online Framework® course prepares borrowers for sustainable homeownership; other education and advising options are available.

Nontraditional credit is allowed: Supports manufactured housing up to 95% and HomeStyle® Renovation (approved lenders) up to 95%

If you're interested in learning more about the Home Ready program or would like to see if you're eligible, contact John here or by phone at (512) 524-8310. 

Episode 71: Reasons to Refinance ASAP

Does your current home interest rate have the number "3" in it?

If your interest rate is in the 4's or higher, listen to the podcast below or keep reading to find out why John Schutze & Andrew Thurston think you should consider refinancing now: 

WHAT DOES IT MEAN TO REFINANCE? 

A refinance is essentially getting a new mortgage to replace your original one - only with a better interest term and rate. A lower interest rate can save as little as $30 to hundreds of dollars off your monthly payments. Your original loan is paid off, allowing you to create a new loan. Refinancing can also allow for you to take cash out of your home for large purchases.

Heads up: Most mortgage companies require borrowers to maintain their mortgage for at least one year before refinancing. 

WHAT ARE THE PERKS OF REFINANCING? 

  • Lower monthly payments: If you plan on living in your home for the next several years, refinancing will be worth it when it comes to savings on your monthly payments. However, if you are planning on moving elsewhere in the next couple years, you may not break even with your refinance & closing costs. It's important to calculate your "break-even point," which helps you decide if a refi is the best option for you financially. 
  • Get rid of pesty PMI: If you bought your house and put less than 20% down, you are most likely required to pay private mortgage insurance. As the value of your home increases, borrowers may be able to drop their PMI with a refinanced loan (as long as it's not an FHA loan). Be sure to ask your lender if this is an option for you!
  • Cash out some of your home equity: As your home increases in value, the opportunity for putting it to cash also increases. You can use a cash-out refi to help purchase a new car or pay down credit card debt. Bonus: This option is also often tax-deductible!

WHAT ARE THE COSTS OF REFINANCING?

Refinancing generally includes lender fees, title company fees, and the cost of a new appraisal.

OTHER REASONS YOU MAY WANT TO CONSIDER A REFI: 

  • Current interest rates: Right now, rates are lower than ever, so it's a great time to consider a refi! 
  • Jumbo loan: If your original mortgage was a jumbo loan, but the current balance of your loan is under $417,000, you may be able to get a "regular" refi with lower rates.
  • Credit score changes: If your credit score has improved since your initial mortgage, you may now qualify for a lower rate! 
  • Home Equity: The more equity you have in your home, the easier it is to get a refi. If you haven't been in your home too long, you may want to wait it out; but if you've earned quite a bit of equity, you're much more likely to qualify for a refi with great terms.

Episode 70, Part 2: What Makes The Boutique Real Estate Unique

Andrew Thurston of Supreme Lending & Noa Levy of Boutique Real Estate discuss her company and what separates them from the rest when it comes to Austin real estate.

What demographics does Boutique Real Estate represent?

"We started out as a downtown firm helping young professionals get condos, and then the young professionals got married and had kids and wanted to go to the suburbs, so that transition is happening all the time," Noa says. "One of our specialties is this transitional phase in your life - whether you're an empty-nester coming downtown or a young professional moving to the suburbs where you'd like your children to go to school, I do believe that is a cool aspect of real estate, because you come from the other side into the suburbs and there are some beautiful parts of Austin with lots of other things to offer."

"We're a young city - we have the University of Texas and other colleges, and it's also a great city to raise kids, a great city to retire in - so it's really interesting to be able to work with folks from different walks of life," Andrew says.

"Our office is set up as a living room, because we thought 'you're buying a house,' so you should feel comfortable and not like you're in a corporate setting," Noa says.

"We really strive to provide a unique experience - providing you with knowledge, with statistics, listening and communicating to your needs, because after all this is one of your biggest purchases in your life," Noa explains.

"If you're paying these high prices for properties downtown, you expect and need that service that a lot of the local shops in Austin can provide, and I think it's great that you came from a bigger shop and paved your own way for the folks who want to live downtown," Andrew says.

How did you come to form Boutique Real Estate?

"I got my Masters in International Relations and Communications, and when I came back to Austin, I couldn't really find a job and at this time East Austin was really starting to transition, so I would call agents and try to get information - and I had an idea about investing in some land in East Austin but I didn't have a client, so I enlisted my parents," Noa laughs. "So my parents bought a little property in East Austin, and then I just got into it! I had a great network here, and we started to find rentals and turn them into sales, and the rest is history."

Do you work with sellers, buyers, or both?

"Both! We also have done project development - we've represented a couple of projects throughout Austin and a couple downtown towers, along with some smaller projects within South Austin - we do it all! We're a full-service firm, we represent buyers, tenants, short-term rentals, projects, and I do about 10% commercial real estate," Noa explains. "But we mostly do residential work."


If you're looking to buy, sell, or have questions about downtown real estate, visit their website at www.breaustin.com or call Noa at (512) 659-3898. 

“The most important thing, whether you’re buying or selling, is to have an advocate for you - and we can do it all!”
— Noa Levy
Noa Levy & Andrew Thurston

Noa Levy & Andrew Thurston

Episode 70, Part 1: Why You Should Consider Downtown Living

Andrew Thurston of Supreme Lending sits down with Noa Levy of Boutique Real Estate to discuss the often-overlooked perks of living in the heart of downtown Austin.

What's the type of mindset of people looking to move downtown?

"Most people are looking to downsize," Noa Levy says. "Or, they're empty-nesters or looking for a change in lifestyle. That's definitely something to consider, because up in the suburbs you have your larger square-foot home, and then you're coming downtown to a more communal setting living in a building with a lot of other people and reducing your square footage by a lot."

"You could still get a large residence downtown, though I imagine they're a bit more pricey than what you'd get in the suburbs," Andrew adds. 

"At the top end, there's the Austonian and these luxury buildings - the high end of those prices are getting into the $800-$1000 per square foot," Noa says. "So if you wanted that same amount of space as a suburban home, you'd end up having to pay up to around $3 million."

What are some perks of living downtown?

"If you think about it, you have this huge yard - you have Lake Austin, you have the trails, and downtown becomes your little playground and you can go anywhere you want and find a bar, a restaurant, a grocery store - pretty soon there will be a big library, and it's just a vibrant part of the city."

"A lot of folks work downtown too, so you could have that," Andrew says. "I go and visit the Northeast and New York City occasionally, and I think in Austin we are kind of coming to that point where we can live and play and work all in the same place."

"I'll use myself as a good example - I've been living downtown for 12 years, and I absolutely love it," Noa says. "I have two children, and we love the lifestyle - it's great to be able to walk out and go feed the ducks, bike the trail, go to the BMX park. We don't feel that we're missing out on the suburban lifestyle - instead, we're getting a totally different way of growing up for our children. Granted, it is in small quarters, but we think the trade-off is something very unique."

How is the population broken down into downtown areas?

"I don't think it's broken down into certain areas - but I think something to consider no matter your age group is to find out what type of lifestyle you want in the building you're considering," Noa explains. "There are buildings with a tons of ameninties, like a gym and pool and concierge; and there are some that are very small and private and maybe you don't need those amenities.

Location is something to consider, too - as downtown has been building, it has created separate areas. There's the market district near Whole Foods, Rainey Street, the entertainment district, and all those areas give off different vibes. 

What's the range of pricing for living downtown?

"There is a side of downtown that is very affordable - you can get a one or two-bedroom ranging from $300/square foot to $500/square foot, which is more of the norm. Some of those buildings on the lower end might be a little older - the $500-600 range will probably be in a newer building and be closer to some of these brand new ones like Seaholm and the Independent that are both coming up." 

"That's really interesting," Andrew says. "I visit a lot of open houses all over the city and I see a lot of houses even in the suburbs that are close to $300/square foot or more, so that's cool to know you can get a property as affordable downtown than living in the suburbs." 

"Another thing to consider with rentals: Some of these rental buildings have rents at $3,000 or $4,000 - that could be your mortgage!" Noa says. 

What about renting?

"Last year we had a lot more people renting - the occupancy rate was 96%, and they're not inexpensive rentals. Now with all these new buildings that have come online, I've seen a lot more homeowner occupants occupying those buildings, and a lot more rental buildings have come up," Noa explains.

"If you're looking to buy downtown, those are considerations like the occupancy rate, how many investors are there, and other details about condo communities that affect warrantability, meaning it may affect your loan." 


Noa Levy of Boutique Real Estate & Andrew Thurston of Supreme Lending

Noa Levy of Boutique Real Estate & Andrew Thurston of Supreme Lending

If you have questions for Noa Levy about residential or commercial real estate or anything downtown-related, feel free to contact her here or by calling her at (512) 659-3898. 

If you have any mortgage questions for Andrew, email him here or give him a call at (512) 590-4976.

 

 

Episode 69, Part 2: Selling Houses in the Age of Technology

Living in the age of technology, it's more important than ever to find creative ways to market and sell houses, especially in the competitive Austin marketplace. Learn more with Andrew Thurston and local agent Marius Morosanu!

What do people need to do to sell their home in this day and age?

"In so many ways, marketing has changed with the prevailing tone of technology and I think it's important for us as real estate agents to take that into account. People are paying attention to design quality and our industry really needs to keep up with that. From that perspective, I think it's important to stand out in the marketplace here because there's a shortage of inventory. Because of that, you really have to fight to bring your home up in buyers' eyes," Marius says.

"It used to be that back in the day, realtors had their printed book that came out every month and I think realtors would put up some signs and walk around, but it's not really the same anymore," Andrew says.

"I look at the MLS every day, and a lot of times you see listings out there that are really subpar. There are some good choices for buyers, and there are buyers that are making multiple offers on houses, and you might say 'well why do i need to do anything extra? and it's because it's more about branding your home and your lifestyle - where I'm at in Avery Ranch, you need to let people know about your community and highlighting that with video and drone photography is necessary."

"I've seen some great marketing for houses, and I've seen some subpar," Andrew says. "For me, the drone videos are one of the coolest things out there right now. 5 years ago, would we ever have thought that was possible?"

"I think this new technology has brought us this really cool cinematic effect with home tours, and typically it's only being used in higher-end homes right now, but I think that as costs come down in the technology and availability, we can bring the cost down and offer those videos at all different price levels. And I think it makes the real estate industry looks better as a whole, too. I want to lift up the industry to see more quality in it," Marius says.

"For sellers to be featuring their homes in such a positive way, they can really get the full market value, which could be missed out on if they only have subpar pictures on the MLS," Andrew says.

"We live in the world of the iphone and beautiful apps - people expect design, and it comes down to what your flyers and signs and photos and videos look like," Marius says.

Why is it still beneficial to host an open house?

"We see all kinds of people come in to open houses - a lot of times we'll get people that come in just to look and see what floor plans look like, and sometimes they just want to see what's the latest and greatest and what's selling," Marius says. "I also think it's important to put on a great open house and have people spend more time there in a warm environment."

As far as inventory goes, people are still going toward the houses that show the best," MArius adds.

"Just because it's a seller's market doesn't mean that sellers can get complacent and not try to present their house well or think they don't need a great realtor," Andrew says. "90% of people who try to sell their houses by themselves end up using a realtor, because there's just so much that goes into the process that people don't realize." 

"When people try to market their houses on their own, they don't necessarily have all the same tools that realtors have," Marius adds. 


If you're interested in purchasing a home or have questions about hosting an open house, feel free to give Marius a call or text at (512) 800-5876 or email him here

If you have any loan-related questions you'd like to direct to Andrew, email him here or give him a call at (512) 524-8356 or reach him on his cell at (512) 590-4976.

Episode 69, Part 1: The Advantages of Smart Home Automation

Loan Officer Andrew Thurston welcomes special guest host Marius Morosanu, of Keller Williams Realty, to the show to discuss the major perks of purchasing a Smart Home.

What is "Smart Home Automation"?

"Smart Home Automation is kind of defined by homes equipment and devices - it's lighting and heating and cooling devices being controlled individually or all at once remotely, so it has a lot to do with how we're able to control our environment," Marius says. "It's definitely part home planning, material choices and the buildout, and how you integrate all those tools into what makes a home a 'smart' home, and I feel like we're in the infancy stage of that right now."

What is included in a typical Smart Home?

"When I hear Smart Home, I think energy efficient - solar panels, thermostats you can program to be on and off in different rooms, et cetera," Andrew says. "Is that part of the Smart Home?" 

"That's the gadget part of it - there's a company developing registers that are smart that regulate the air coming into particular rooms, which works in conjunction with your locks and lights and thermostat, so in essence you can set up a recipe that will make sure the doors are closed and locked and the thermostats are off. You can set it up so that everything can be turned off or on within a 5 or 10 mile radius of your house."

The building process itself is also a huge portion of the Smart Home: "The buildout makes sure it's environmentally friendly and has those materials inside of it, like carpeting that doesn't hold mold or surfaces that are easy to clean or come from renewable sources, and really that work with your external environment and help you live a cleaner and better life," Marius says. 

Does a Smart Home save you money?

""It does, it saves a lot of money!" Marius says. "There's a homebuilder here in Austin that I'd like to mention, Scott Turner, who has a couple of smart home models in downtown Austin at Riverside that fit the smart home bill in the sense of their buildout and energy efficiency," Marius says. "These are the environments that millennials will want to be a part of!"

"Are the savings over time actually going to give you a cost benefit, or do you just know you're gonna spend a little more because you have that attitude of being green or environmentally frinedly?" Andrew asks. 

"People buy on emotions so much, so a lot of these technologies will give you a lot of cost benefits over time - if you have a home that doesn't leak air, of course that will be beneficial to your wallet. But as you add convenience, that 'feel good' factor of 'hey, I'm doing the right thing!' That starts to add a lot more value to the whole concept," Marius says.

"It's so important to have a realtor out there who can point these things out to you, because when you say that, it makes a little more sense to me that it's not always just about the numbers and that it's about the lifestyle too," Andrew says.

"You always want to have friends over and brag to your friends about all the cool features in your home," he adds. 

"And you can brag with the touch of a single button," Marius says. "You can just press a button and have your lights turn a different color and integrate into a grander system with different rooms in the house."

What's the best way to get in touch with Marius?

"I'm one of those people that loves to talk on the phone, so calling me at (512) 800-5876 is probably the best way to reach me through text or phone," Marius says. "You can also reach me via email at marius@refinedaustin.com or visit his website, www.refinedaustin.com

If you'd like to get in touch with Andrew to apply for a loan or learn more about purchasing a home, email him here or give him a call at (512) 524-8365.

 

 

Episode 68, Part 3: Explaining Recent Appraisal Delays in Austin

John and Andrew talk appraisals and recent delays in the busy Austin real estate market.

"There's no doubt that there are delays with appraisals right now," John says. "Prior to March or so, in real estate things get really busy in the spring through the summer, and then it slows down around November. We're in two thirds of the way through the busy season right now." 

Why are appraisals taking longer to come in right now?

"Appraisers get really busy too, but to become an appraiser, it's like a two-year apprenticeship and you also have to have a college degree, and you can't just hire appraisers," John explains. "It's an industry where the average age is going up and the younger generation is not getting into becoming appraisers, for whatever reason. It's just the reality - the average age of appraisers is around 60 right now."

So when appraisers get really busy, they're tapped out - there's just not enough appraisers out there right now. 

"We're used to about a 5-day turnaround, but we're seeing in Travis County that it's taking about 6.4 days on average to get an appraisal back. When you're in this business, every day counts. Sometimes that one day can really affect things."

In other counties like Bexar County near San Antonio, appraisals are taking about 7 to 8 days right now. 

"In Salado, we had to call 10 appraisers to find one who could do that report in 17 days. We couldn't find an appraiser to do it in the time-frame it needed to happen, so we had to push out closing date out, and the appraisers were still 3 days past that date."

We work with appraiser management companies, so we don't really have any control over how the appraisal goes or how fast it comes back," Andrew adds. 

Guidelines to Dealing with Appraisal Delays

1. Be prepared to possibly pay more

A typical appraisal costs roughly $460, but it's not uncommon these days to pay $560 or $660 for an appraiser simply because they are so busy and working later than normal. "It's supply and demand," John says.

2. Talk to your lender about what their turn times are

We have a pretty good idea depending on the location of the property what the turn time is for an appraisal. If a closing date is August 10th and the best appraisal time is August 8th, we'll then tell you that we think it should close on time, but there may be a delay. A good lender will let you know upfront that there may be a delay in your appraisal.

3. Have a back-up plan

"Unfortunately, right now you may just have to assume that the appraisal will come in a day or two late," John says. 

Be sure to communicate with your realtor and lender to ask what the plan is if the appraisal does come in a little later than the deadline. "I think most good agents will think through this and have a pre-negotiated backup plan so that if the worst-case scenario happens, you will be able to get through it," John says.


If you work with a good lender, they will help you through this process! If you have any further appraisal questions, feel free to call John or Andrew at (512) 524-8310. 

 

 

 

Episode 68, Part 2: DPA Programs That Aren't FHA

John Schutze & Andrew Thurston discuss the different down payment assistance program alternatives to FHA. Listen in to see which programs you may qualify for!

"A lot of the folks I work with are first-time homebuyers and millennials," Andrew says. "A lot of younger people don't have a lot saved up and don't know what to do, so they come to us to see what their options are."

"One of the neat things about Supreme Lending is we offer several down payment assistance programs," Andrew says. 

Those programs include the SETH program, TSAHC program, Travis County HFC program, and the My First Texas Home TMP 79 program. You can learn about all of these programs right here!

DPA programs help you cover your down payment and maybe some of the closing costs. There is, of course, a trade-off: The closing costs are a little higher and interest rates are a little higher with these programs.

An FHA loan allows you to do 3.5% down payment with pretty good interest rates and are usually more forgiving on the credit score side, but their monthly mortgage insurance is usually higher. 

An alternative that makes sense for some people with a higher credit score is a conventional DPA program: They can get a conventional loan with an even lower down payment at 3% and still receive down payment assistance!

Conventional loans are also great for condos, since FHA loans for condos are generally much more strict on approving certain condos. 

"With an FHA loan, you have to look at the spouse's credit score. In some cases, one spouse has great income and credit, but the other spouse may have a lower credit score or more debt. Unfortunately, with FHA loans, we must include both debts for each spouse. With conventional loans, you don't have to do that and can qualify with just one spouse's information," John says.

Nowadays, there are a lot of down payment conventional programs that are better options than an FHA loan! There are some from Fannie Mae, some from Freddie Mac, and all with different eligibility factors. 


If you'd like to learn more about down payment assistance programs, visit our blog or call John or Andrew at (512) 524-8310 to discuss your loan options!

 

 

 

Episode 68: Discussing Discount Points

John Schutze & Andrew Thurston of Supreme Lending discuss how the point system works with home loans, and what it means to have a discount point.

3.45% is the current average interest rate, according to Freddie Mac's latest survey. However, there are a lot of factors that may bring in adjustments to that rate, John and Andrew say.

"A common phrase I hear is that people want 'no points,' or 'I don't want to pay any points!'" The Freddie Mac rate specifically includes average points of .5 -- it's not the zero point rate," John says. 

"The rates that are quoted generally have some sort of associated discount points," John explains. 

"We're definitely competitive out there with other lenders and banks," Andrew says. 

"I had a client this week who was about to go with another lender after starting the process with us," John says. "They emailed me and said they were going to go with another lender because their rates were better. She put these round numbers in an email, and it didn't look right to me because her closing costs were $500 - so unless the lender was waqiving their fees AND the title company's fees, it just didn't add up. So in a very nice way, I told her to send me that in writing - I want to help people, and I didn't want her to go down the road and find out later about those costs. She had called online to a lender and wasn't even given a written quote!"

What is a discount point? 

Discount points come up a lot, so it's important to know what they are:

"Discount points are basically money that you pay to bring the interest rate down," Andrew says. "So in this case the point is equal to 1% of the loan amount, so if you're buying a $250,000 home and putting 20% down, your loan is $200,000. So one point there is going to be $2,000. If the Freddie Mac average is half a point, then they are likely paying $1,000 to drop that interest rate a little bit."

"I'm seeing these tiers - you may pay one point just to get an 1/8th percent off, since rates are so low right now. What we're actually seeing is a lot of clients aren't paying too many points because it doesn't really pay off right now," John says.

"You pay your normal lending fees plus the title company fees, so if today you paid a point, you could get down to 3.375, paying $2,000 on a $200K house -- your payment will be $28 cheaper if you do that,' John explains. "So one thing we do is help people understand what their break-even is; so how many months would have to go by before that savings of $28 per month adds up to the $2k you paid?"

"A lot of lenders seem to give clients a one-rate option, whether discount points are included in that number or not. This is especially true with online lenders and banks, quite frankly," John says. "That's why it's so neat what we do, because we give our clients a matrix chart of different rate options so they can see what they are saving and where with different points and rates."

Bonus: Discount points are generally tax deductible, so if you pay points now, you can increase your tax deductions slightly!


If you'd like a consultation or have further questions about how discount points work, give John or Andrew a call at (512) 524-8310. 

Episode 67: Is Now The Best Time To Refinance Your Home?

With interest rates averaging close to 3.57% (according to Freddie Mac's latest survey), there hasn't been a better time to refinance in years! Listen to the show or continue reading below to figure out if refinancing is something you should consider:

What does it mean to refinance? 

A refinance is essentially getting a new mortgage to replace your original one - only with a better interest term and rate. A lower interest rate can save as little as $30 to hundreds of dollars off your monthly payments. Your original loan is paid off, allowing you to create a new loan. Refinancing can also allow for you to take cash out of your home for large purchases.

Heads up: Most mortgage companies require borrowers to maintain their mortgage for at least one year before refinancing. 

What are the perks of refinancing? 

  • Lower monthly payments: If you plan on living in your home for the next several years, refinancing will be worth it when it comes to savings on your monthly payments. However, if you are planning on moving elsewhere in the next couple years, you may not break even with your refinance & closing costs. It's important to calculate your "break-even point," which helps you decide if a refi is the best option for you financially. 
  • Get rid of pesty PMI: If you bought your house and put less than 20% down, you are most likely required to pay private mortgage insurance. As the value of your home increases, borrowers may be able to drop their PMI with a refinanced loan (as long as it's not an FHA loan). Be sure to ask your lender if this is an option for you!
  • Cash out some of your home equity: As your home increases in value, the opportunity for putting it to cash also increases. You can use a cash-out refi to help purchase a new car or pay down credit card debt. Bonus: This option is also often tax-deductible!

What are the costs of refinancing?

Refinancing generally includes lender fees, title company fees, and the cost of a new appraisal.

Other reasons you may want to consider a refi: 

  • Current interest rates: Right now, rates are lower than ever, so it's a great time to consider a refi! 
  • Jumbo loan: If your original mortgage was a jumbo loan, but the current balance of your loan is under $417,000, you may be able to get a "regular" refi with lower rates.
  • Credit score changes: If your credit score has improved since your initial mortgage, you may now qualify for a lower rate! 
  • Home Equity: The more equity you have in your home, the easier it is to get a refi. If you haven't been in your home too long, you may want to wait it out; but if you've earned quite a bit of equity, you're much more likely to qualify for a refi with great terms.

While refinancing can sound complicated, try not to feel overwhelmed! Call John or Andrew today at 512-524-8310 for an open and honest discussion of all your options. We're happy to take a look at your situation and help you decide if refinancing right now is the best idea for you! 

If you're interested in taking the next step, just click right here to apply!

Episode 66, Part 2: Why Sellers Should Get Home Inspections First

Mark Hairston and Andrew Thurston of Supreme Lending welcome Keller Williams Luxury Homes Agent Sean Sutton to the show to discuss an awesome strategy for sellers when it comes to home inspections and how to control the deal.

What's a home inspection? 

"A non-invasive visual inspection of the systems and components for durability, operability, and serviceability," Russ explains. "If you tear a wall open and find dry rot, that's really not your home inspector's fault. However, if there was water damage or staining, then absolutely they should be bringing that up."

"The home inspection is usually something we're all holding our breath for," Andrew says. 

"I literally schedule the inspection as I'm driving away after a final offer has been made," Russ says, emphasizing the importance of getting an inspection done as soon as possible in the process.

Why the seller should get a home inspection done first

"The one person holding their breath the most in this is the seller," Russ says. 

"The seller should get the inspection done upfront BEFORE they go on the market," Russ explains. "Now when they get an offer, they respond with their counteroffer AND their seller's disclosure AND the home inspection, and now they've defined the as-is sale. The buyer may get their own home inspection anyway, and anything that's in their inspection that's also in yours, you've already defined as part of the as-is sale and there's no re-negotiation. Anything different, you go back to your inspector and if the buyer's inspector is correct, then a great seller's inspector will step up and make it right, and that's a win-win."

"Be prepared. Get everything done upfront so you can control the process," Russ advises.

Left to right: Andrew Thurston, Russ Colliau, Mark Hairston.

Left to right: Andrew Thurston, Russ Colliau, Mark Hairston.

If you have any questions for Russ about real estate or home inspections, feel free to call him at 512-910-0560 or email him at RussColliau@kw.com.

If you have any questions on the lending side, call Mark at 512-789-6967 or Andrew at 512-590-4976. 

Episode 66, Part 1: Home Buying Is At Its Lowest Percentage in 48 Years

Mark Hairston and Andrew Thurston of Supreme Lending sit down to discuss the surprising news that the current percentage of home-buyers is at its lowest in 48 years.

Why are we at a 48-year low?

"The housing crisis back in '08 is still affecting us, though in Austin we have been protected from it moreso than in other areas in the United States - but it seems like some people are still too scared or think it may be too difficult to buy a home," Andrew speculates.

"Also, it seems like a lot of millennials are okay with putting home-ownership off," Andrew says.

"I'm definitely seeing that," Keller Williams agent Sean Sutton agrees. "But it's the opposite of what they should be doing! The sooner you can buy a property, the sooner you can start building that real estate wealth. More millionaires have been made through real estate than any other platform!"

Mark adds, "The economy isn't doing so great and the rates are pretty low right now, so it's a great time to buy."

"I've been seeing refinances go up as well," Andrew says. "People who got mortgages in the past two or three years are even refinancing already."

"However, at some point rates will go up, so it's smart to get in now," Andrew advises. 


If you're interested in buying a home in the near future, contact Keller Williams Luxury Home agent Sean Sutton at (512) 988-7827 or email him at seansutton@kw.com.   

If you have questions about refinancing your current mortgage or if you're looking to apply, contact Mark or Andrew or call our office at (512) 524-8310.