If you have an upcoming closing that involves a loan in Texas, the Lender who is making the new loan will require all property taxes to be collected and paid at the time of closing.

Typically, these taxes can be paid one of two ways:

1)    Property taxes can be withheld from the owner’s funds at the time of closing,
OR
(2)     Funds can be disbursed from the existing owner’s escrow account currently set up to service the property.

Occasionally, there may be a delay from the time the existing Lender disburses the funds from the existing escrow account to the point at which taxes can be verified as “paid” by the taxing authority.  If the title company unable to obtain a tax certificate from the tax service confirming that taxes are paid in full at the time of closing, then they will be required to collect these taxes from you, the current owner, at closing.  Unfortunately, paid receipts from the property tax office, escrow account disbursement statements or letters from your Lender confirming the disbursement of taxes from your escrow account will not be adequate proof of payment.  The Title Company must have a Tax Certificate which indicates that taxes have been “Paid” prior to closing.

This can be a very confusing issue, so please feel free to contact us with any questions you may have with regard to property taxes or any other title matter.

If you missed the boat on record low mortgage rates last October/November, the opportunity has presented itself again. Don’t delay, the record low rates may not last.

If you are in the process of a loan and have not locked your interest rate, you may be at risk.  The risks involved in floating have greatly expanded to include (1) lenders taking it upon themselves to negatively adjust rate sheets (to slow loan production) and (2) interest rates finding a bottom and moving higher on their own.   The frustration of missing out on “high 3′s” and instead getting “low 4′s” seems nowhere near as bad as the frustration of missing out on a refi opportunity (moving from 5% to 4.25% for instance) altogether.

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Total housing inventory dipped slightly in 2010, as did the number of weeks the home remained on the market.

Home prices are expected to bottom-out in 2011, which means that if you are thinking of purchasing a home, you need to take action NOW! With low interest rates and a strong inventory, 2011 is shaping up to be a buyers market.

The Annual Mortgage Insurance Premiums is the mortgage insurance that is included in your payment (1/12th), the Upfront Mortgage Insurance Premium is the amount that is added to your loan amount.

Currently, the annual premium for 30-year mortgages, with Loan-to-Value’s (LTV) over 95% is 90 bps, as of April 18, 2011, this will increase to 115 bps.  LTV’s below 95% will increase from 85 bps to 110 bps on 30 year mortgges.

15 year mortgage’s will also be hit with the increase. Currently LTV’s less than 90% have no annual mortgage insurance, but not so after April 18th, add 25 bps to your payment, and over 90% LTV will increase from 25 bps to 50 bps.

So what does all this mean? Higher mortgage payments!  This is the second increase in Annual Mortgage Insurance Premiums in less than 1 year. October 1, 2010, HUD raised the premium from 55 bps on 30 year fixed rate mortgages to 90 bps on LTV’s over 95%.

If you are looking to purchase or refinance with FHA financing and have been sitting on the fence waiting for home prices to drop, you may want to re-consider, and have a case number assigned (appraisal ordered) before 4/18/2011. Your monthly payment on a FHA 30 year loan with 3.5% down, will go up a little more than $41.00 per month on a purchase price of $200,000.

Even with all the regulations that have been placed on the mortgage industry, I am still amazed at the lack of ethics with Loan Officers quoting interest rates to “rate shoppers”.  Now, I am all for trying to get the best deal, but unfortunately what happens to rate shoppers is they don’t get the best deal and don’t realize it until interest rates have gone up (which in some cases is within hours of the initial quote) or worse yet, they get down to closing and are told they need to bring in thousands of dollars more than they had expected.

Far too often we receive phone calls from borrowers who think they have all the answers that any Loan Officer needs to quote an interest rate, because they have shopped around, they know what questions will be asked.  They are quoted an interest rate and how much it will cost. The only problem is the rate they were quoted is only for a 10 day lock, and the loan can’t close in 10 days.  Or worse yet, quoted an interest rate that really doesn’t exist for the price (origination fee, discount points). Why, because the Loan Officer want’s the deal and hopes that rates are volitile enough to drop to the rate and price quoted before the loan closes.

So if it sounds to good to be true, it probably is. We all get our rates from the same place, the “secondary market”. Yes, some lenders will pad the price more that others, but unless the lender is trying to fill a commitment, rarely will you see the price lower for a given interest rate.

What borrower’s should be shopping for is experience and service. By experience, I mean experience of the Loan Officer.  How much experience? Do they educate themselves on the ever changing underwriting guidelines? Are they licensed through the NMLS? Do they ask questions to find out what your financial goals are? If any of the answers are NO, then run, don’t walk to and experienced Loan Officer.