Mortgage Do's And Don'ts
Mortgages can be tricky, and it's easy to make mistakes that can end up costing you dearly. That's why we've put together this list of Mortgage Do's and Do not's to help you navigate the process with ease - and a little bit of humor.
DO: Shop around for the best mortgage rates
DON'T: Assume your bank will give you the best rate just because you have a checking account there. Remember, loyalty is a two-way street.
DO: Have a budget in mind
DON'T: Get in over your head. Just because you can technically afford a million-dollar mansion doesn't mean you should buy one. You don't want to be house-poor and unable to afford groceries.
DO: Get pre-approved before house-hunting
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DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
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DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Get pre-approved before house-hunting
.
DON'T: Assume you'll be approved for a mortgage just because you have good credit. Pre-approval is important because it gives you a better idea of how much house you can afford and shows sellers that you're serious.
.
DO: Consider your future plans
.
DON'T: Assume you'll live in your new house forever. Life happens, and you may need to sell sooner than you think. Make sure you're not getting into a mortgage that you can't realistically afford if you need to move in a few years.
DO: Read the fine print
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DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
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DO: Be prepared for unexpected expenses
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DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Read the fine print
.
DON'T: Sign on the dotted line without reading the terms and conditions. There may be hidden fees or clauses that could come back to haunt you later.
.
DO: Be prepared for unexpected expenses
.
DON'T: Assume everything will go smoothly. There may be unforeseen expenses, like a leaky roof or a broken furnace, that can quickly drain your savings. Be sure to budget for these types of surprises.
DO: Have a good sense of humor
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DON'T: Take everything too seriously. Yes, buying a house and getting a mortgage can be stressful, but try to find the humor in the situation. After all, laughter is the best medicine for a stressful day.
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By following these Mortgage Do's and Do not's, you'll be well on your way to successfully navigating the mortgage process - with a smile on your face. Good luck, and happy house hunting!
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🇺🇸 TX VA Loan Benefits: $0 Down Purchase, IRRRL, Construction & Renovation Options 🏡
🇺🇸 TX VA Loan Benefits: $0 Down Purchase, IRRRL, Construction & Renovation Options 🏡
🎖️ Texas Veterans: Your VA Loan Can Do More Than Just Buy a Home 🇺🇸
Texas VA Loans Offer More Options Than Many Veterans Realize
For eligible Veterans, active-duty service members, and qualifying surviving spouses, the VA home loan benefit can be one of the most powerful mortgage programs available in Texas.
Most borrowers know about the traditional VA purchase loan. What many don't realize is that VA financing can potentially do much more.
Depending on the property, borrower, lender, and transaction, VA-backed financing can be used to purchase a home, refinance an existing VA mortgage through an IRRRL, build a new home, or purchase/refinance a property that needs renovations. The VA specifically identifies buying, building, and improving a home as eligible uses of the VA home loan benefit.
For Texas Veterans, understanding these options can make the difference between simply asking, "Can I get a VA loan?" and finding the VA financing structure that actually fits your goals.
🇺🇸 1. Standard VA Purchase Loans in Texas
The traditional VA purchase loan remains one of the program's biggest advantages.
Qualified borrowers may be able to purchase with no down payment, subject to entitlement, qualification, appraisal, and lender requirements. VA loans also don't require monthly private mortgage insurance.
VA-backed purchase financing can potentially be used for a single-family residence, a VA-approved condominium, certain manufactured homes, and even properties containing as many as four units when applicable VA requirements are satisfied.
That makes VA financing particularly compelling for Texas buyers who want to preserve cash rather than putting a large amount of money into a down payment.
Another important consideration is the VA funding fee. Many borrowers pay a one-time funding fee, but certain eligible Veterans and other borrowers are exempt. The exact amount depends on factors including the loan type, down payment, and previous use of the benefit.
💰 2. VA IRRRL: Streamlining an Existing VA Mortgage
Already have a VA loan?
The VA Interest Rate Reduction Refinance Loan, commonly called an IRRRL or VA streamline refinance, is designed specifically for refinancing an existing VA-backed mortgage.
An IRRRL may make sense when it can help a homeowner reduce the mortgage payment through a lower rate or create greater payment stability by refinancing from an adjustable-rate mortgage into a fixed-rate loan.
One of its biggest attractions is the streamlined process. VA guidance states that an appraisal or traditional credit underwriting package isn't required by the VA for an IRRRL, although individual lenders can impose their own requirements. An IRRRL also doesn't provide cash back to the borrower.
Closing costs can potentially be incorporated into the new mortgage, and the current VA funding fee for an IRRRL is 0.50% for borrowers who aren't exempt.
The key isn't simply whether today's rate is lower. The transaction needs to make financial sense after considering the payment savings, closing costs, loan balance, and time required to recoup those costs.
🏗️ 3. VA Construction Loans: Build Your Texas Home
What if the home you want doesn't exist yet?
VA financing can potentially be used to construct a primary residence.
VA guidelines permit both one-time-close and two-time-close construction loans.
With a one-time-close structure, construction financing and permanent financing are established through a single closing. A two-time-close transaction generally involves initial construction financing followed by permanent financing after construction.
This can be particularly attractive in Texas, where buyers may want to purchase land and build rather than compete for an existing home.
However, VA construction financing is more specialized than a standard VA purchase. The builder, plans, specifications, appraisal, inspections, construction budget, draw process, property and lender all become important parts of the transaction.
Not every VA lender offers construction financing, either.
That's where working with a mortgage broker familiar with specialized VA lending can be especially valuable.
🛠️ 4. VA Renovation Loans
Suppose you find the right location but the wrong house.
Instead of automatically walking away from a property because it needs repairs, a VA renovation loan may provide another option.
VA guidelines permit alteration-and-repair financing that can allow improvements to be incorporated into an eligible VA purchase or qualifying refinance transaction and completed after closing. Funds are then disbursed to the contractor during the renovation period.
That could potentially open the door to properties that need updating rather than limiting your search to completely finished homes.
Renovation transactions require additional coordination because the improvements, contractor, appraisal, draws, inspections, and VA minimum property requirements must all be addressed.
Why Work With a Mortgage Broker for a Texas VA Loan?
VA establishes the framework for its home loan guaranty program, but private lenders make VA-backed mortgages, and their pricing, requirements, and available programs can differ. VA itself encourages borrowers to compare lenders because terms and fees vary.
This distinction becomes especially important when you're considering specialized financing such as VA construction or renovation loans.
At Medallion Funds, our objective isn't simply to quote a mortgage rate. It's to help identify a financing structure that matches your property and long-term goals.
Whether you're purchasing your first Texas home, refinancing an existing VA mortgage, building from the ground up, or buying a property that needs renovation, understanding the available options is the first step.
Ready to Explore Your Texas VA Loan Options?
If you've earned your VA home loan benefit, don't assume you're limited to a traditional purchase mortgage.
Standard Purchase. IRRRL. Construction. Renovation.
The right option depends on what you're trying to accomplish.
Bill Rapp
Partner & Capital Advisor | Medallion Funds
Commercial Lending Nationwide
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© Bill Rapp, Medallion Funds LLC, Director of Capital Advisory
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