PEOPLE
2022 REAL ESTATE EDITION
COMPILED BY BRIAN RASH & BROOKE SJOBERG
Robert Bowker
Robert Bowker is a mortgage loan originator with Interlinc Mortgage, a lending company in Round Rock. Bowker recently answered several questions for Community Impact Newspaper centered on the homebuying process. Speci cally, Bowker provided information and tips for people looking to buy a home as well as common practices and bene ts to look out for. The following answers have been edited for length and clarity. Mortgage loan originator, Interlinc Mortgage LLC
LOAN TYPES
because everyone’s situation is di erent. Homeowners really need someone they trust who will calcu- late for them the actual return on investment for re nancing, rather than someone who is just out for a paycheck. Homeowners must consider the following when determining whether or not to re nance: • how long they plan to stay in the home; • what the re nancing will save them per month; and • what it will cost to re nance, whether that is being rolled into the loan or it is being paid up front. HOW CAN HOMEOWNERS USE HOME EQUITY TO THEIR ADVANTAGE? Home equity is a great thing. In Texas, homeowners are restricted to taking only 80% of the total value of their home as a cash out to help protect the equity. However, it is important to understand how to wisely utilize a cash out. As one example, I would not use a cash out on my home equity to pay o my car, because I would be stretching out the payments from a short-term debt to a long-term debt, and I would ultimately end up paying more for the vehicle. CAN PAYING OFF A MORTGAGE EARLY RESULT IN PENALTIES? On a regular conventional [loan], there are no prepayment penalties, but if you are doing a unique program like a bank statement loan [that allows homebuyers to qualify for a mortgage without income documents that most loan types require] or non[quali ed mortgage loan, which has features that reduce risk for borrowers and make the loan more a ordable], homebuyers need to ask if there are any penal- ties for paying o a home loan early. Robert Bowker specializes in helping home buyers navigate the loan process. COURTESY ROBERT BOWKER
According to Bowker, there are several mortgage loan programs that are bene cial to rst-time homebuyers. Those include:
WHAT SORT OF QUALIFI CATIONS DO PROSPECTIVE BUYERS NEED TO BE AWARE OF TO BE APPROVED FOR A MORTGAGE LOAN? There are many things that need to be considered. A key element is what is called a debt-to-income ratio. There is a front ratio and a back ratio. The front ratio for the homebuyer is the percentage of their gross monthly income, and the back ratio is the housing payment and all debts on a person’s credit report as a percentage of gross monthly income. Additionally, homebuyers need to be aware of the e ect student loans will have on that ratio. Even though student loans may not require a payment at present, mortgage lenders will still factor in a 0.5% of a person’s total loan against their debt ratio. A second key requirement involves a person’s credit score. The score requirement will vary depending on factors such as loan type. For example, the Federal Housing Administration can accept a credit score as low as 580 as long as the debt-to-income and loan-to- value ratios t the program guide- lines of the investor. Conventional loans can go down to a 620 credit score, but that will also require a larger down payment. WHAT ARE SOME TIPS FOR FIRST TIME HOMEBUYERS TRYING TO TAKE ADVANTAGE OF ASSISTANCE PROGRAMS? First-time homebuyers need to get a lender who knows the elements of various loan programs such as how much must be repaid or how much could be forgiven. All of the assistance programs are di erent. There are also di erent assistance percentages available that range from 2%-5% of the loan. Homebuyers should also be aware of what is called a mortgage
credit certi cate, or MCC, which is designed to help rst-time homebuyers get assistance with tax credits. They should also be aware that assistance programs come with income limitations, and some come with purchase price limits. That is why it is important to work with a professional. WHAT IS THE DIFFERENCE BETWEEN AN ADJUSTABLE MORTGAGE AND A FIXED RATE MORTGAGE? The adjustable rate mortgage, or ARM, is locked in for a period of time and then will adjust. For exam- ple, a homebuyer could opt for what is a called 5/1 adjustable mortgage. That is where a loan’s interest rate is locked in for ve years and can adjust once a year. Or, a homebuyer could have a 5/6, which is a loan in which the interest rate is locked for ve years and can adjust every six months. People need to ask these questions and also be aware of the life cap, which is the maximum number of times a loan can adjust over the life of the loan. A xed rate loan contains an interest rate that is locked in for the full period of the loan, whether that is 15 years, 30 years or another amount of time. HOW LONG DOES THE HOME BUYING PROCESS TAKE ONCE THE MORTGAGE APPLICATION IS FILED? This is a tricky question because [the process] is not based on when the application is lled out. It is based on the time the contract is written. Homebuyers should be able to close a mortgage within 30 days from when the contract is written. WHEN IS THE BEST TIME FOR A HOMEOWNER TO REFI NANCE THEIR MORTGAGE? This is a very tricky question
TSAHC:
A loan from the Texas State A ordable Housing Corp. provides 30-year xed interest rate mortgage loans, down payment assistance and mortgage credit certi cates to homebuyers in communities throughout Texas. The programs are o ered through a network of approved mortgage lenders.
SETH:
Loan programs from the Southeast Texas Housing Finance Corp. help promote a ordable housing opportunities for low- to moderate- income Texas residents.
TDHCA:
The Texas Department of Housing and Community A airs has various loan programs that administer funds to residents through partnerships with cities and counties that receive no direct allocation of federal housing money, nonpro t and community-based organizations, private developers and public housing authorities.
Travis County—Hill Country Home Down Payment Assistance:
Interlinc Mortgage 3000 Joe Dimaggio Blvd., Ste. 66, Round Rock 512-387-2583 https://interlincmortgage.com/austin SOURCES: ROBERT BOWKER, WWW.FHA.COM, WWW.SETHFC.COM, WWW.TDHCA.STATE.TX.US, WWW.TSAHC.ORG COMMUNITY IMPACT NEWSPAPER The Travis County Housing Finance Corp.’s HCHDPA program helps homebuyers with government-backed loan nancing.
JOE DIMAGGIO BLVD.
KENNEY FORT BLVD.
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ROUND ROCK EDITION • JULY 2022
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