FAQ

Frequently Asked Questions

What Is the Lender's Formula?

The “lender’s formula” typically refers to a set of criteria or calculations used by lenders to determine whether an individual qualifies for a mortgage loan, and if so, how much they qualify for. It’s not a standardized formula, but rather a combination of factors that lenders consider when assessing a borrower’s eligibility for a loan. These factors typically include:

Income and Employment History: Lenders assess a borrower’s income to ensure they have the financial means to repay the loan. Stable employment history is also important, as it indicates a reliable source of income.

Credit Score and Credit History: Lenders typically review a borrower’s credit score and credit history to evaluate their creditworthiness. A higher credit score and positive credit history indicate a lower risk for the lender.

Debt-to-Income Ratio (DTI): Lenders calculate the borrower’s debt-to-income ratio, which compares the borrower’s monthly debt payments to their gross monthly income. A lower DTI ratio indicates that the borrower has more disposable income to allocate towards mortgage payments.

Down Payment: The size of the down payment can affect the terms of the loan. A larger down payment typically results in a lower loan-to-value ratio (LTV), which may lead to more favorable loan terms.

Assets and Reserves: Lenders may consider the borrower’s assets and reserves, such as savings accounts or investments, to assess their financial stability and ability to handle unexpected expenses.

Loan-to-Value Ratio (LTV): The loan-to-value ratio compares the loan amount to the appraised value of the property. A lower LTV ratio indicates less risk for the lender, as the borrower has more equity in the property.

Other Factors: Lenders may also consider other factors such as the type of property being purchased, the borrower’s occupancy status (primary residence, second home, or investment property), and any potential additional sources of income.

Overall, the lender’s formula is a comprehensive assessment process used by lenders to evaluate borrowers and determine their eligibility for a mortgage loan. It’s important for borrowers to understand these factors and take steps to strengthen their financial profile before applying for a mortgage.

What Do I Look for in Homes in Texas?

It is no secret that different things will have different levels of value to different buyers, but there are a few things that you should keep an eye out for when buying property in North Texas:

Foundation: Due to the sandy loam soil that is prevalent throughout North Texas, foundation movement is very common. It is not uncommon for homes of 10+ years old to have at least some foundation movement/settlement. It is always recommended to have a professional foundation company and structural engineer inspect the property you are purchasing in Denton County.

Roof: Hail storms and wind storms are very common in North Texas. Sometimes, hail damage can cause enough damage to total your neighbors roof, and leave your roof unaffected. Because of the unpredictability of hail and wind in North Texas, it is crucial to have a professional roofer inspect the roof of any property you are purchasing in North Texas.

HVAC/Air Conditioner: It gets very hot and very humid here in North Texas, and it can get very costly to protect yourself from the elements if you do not do proper due diligence on the HVAC systems in a property. Full HVAC replacements are currently ranging anywhere from $8,000 to $25,000 depending on the system and size of home. It is crucial to have a general inspector and HVAC professional inspect the HVAC components of your property or a property you are purchasing here in Texas.

Can I Ask You for Advice?

Yes! Seeking advice from a professional real estate agent comes at no cost to you as a consumer. It is not until closing that an agent would be paid, in most cases here in Denton, Texas.

Am I Ready to Be a Homeowner?

If you’re considering buying a home in Denton, Texas, it’s crucial to assess your readiness. Here’s a brief guide:

Financial Stability: Ensure you have a stable income to cover mortgage payments, taxes, insurance, and maintenance costs.
Affordability: Calculate how much you can afford to spend on a home and determine if it fits within your budget.
Long-Term Commitment: Consider your long-term plans and whether homeownership aligns with your goals.
Market Research: Research the real estate market in Denton to understand current trends and property values.
Lifestyle Preferences: Evaluate how homeownership will impact your lifestyle and daily routines.
Responsibilities: Understand the responsibilities of homeownership, including maintenance and repairs.

By considering these factors, you can determine if you’re ready to buy a home in Denton, Texas.

For personalized assistance with your home buying journey, contact Brownie Stonecipher and his team. We’re here to help you every step of the way.

What Should I Expect at Closing?

As long as your professionals have taken care of all appropriate matters, Closing should not be a complicated process. You typically only need to bring a form of identification to the table, along with funds required at closing which should have been clearly disclosed well in advance, if necessary. At closing, you will sign all of the required paperwork for the Title Company to properly record the property sale with the local jurisdiction.

For buyers, closing can take up to an hour sometimes, depending on the type of financing, title discrepencies, and a multitude of other matters.

For Sellers, closings can be as quick as 15 minutes. For a Seller, there is typically less paperwork to sign here in Texas, which typically results in a bit faster of a signing.

What Is Pre-approval?

The only ‘real’ way to answer if you are ready to be a home owner, is to connect with a qualified lender and go through the pre-approval process.

A pre-approval can typically be done mostly online, and involves filling in information and submitting documents with a licensed mortgage officer. By getting a pre-approval, it allows the lender to provide you with different scenarios based on your specific financial situation.

The pre-approval process will allow the loan officer to take into account your debt to income ratio, current assets, current income, amongst other factors to determine what amount you may qualify for. From there, it is important to consider what your monthly payments will be under different scenarios. After all, that monthly payment is typically what matters most at the end of the day.

Am I Ready to Rent?

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What Should I Offer?

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Do I Need a Home Warranty?

A home warranty is not a requirement, but it can provide valuable peace of mind for homeowners. A home warranty typically covers repair or replacement costs for major systems and appliances in your home, such as HVAC systems, plumbing, electrical, and kitchen appliances. It can be especially beneficial for older homes or first-time homebuyers who may not have a reserve fund for unexpected repairs. However, whether you need a home warranty depends on your individual circumstances and risk tolerance. Consider factors such as the age and condition of your home, your budget for maintenance and repairs, and your ability to handle unexpected expenses.

Let's Find You Together The Place You Deserve

I am always happy to provide free consultation and answer real estate related questions. Reach out below or text/call/email me anytime, and let’s talk real estate.