Michael Stockton

The FED announced last week that it would cut it’s overnight lending rate to .25%. This news alone was not necessarily a shock to the market, however in the words of the FED Chairman, Ben Bernanke, the FED would use every tool in its’ arsenal to help stimulate the economy.  One tool is the purchase of mortgage backed securities.  The FED’s announcement to continue to purchase mortgage backed securities caused the bond market to rise rapidly.  This alone will help to continue to drive down mortgage rates. 

Refinancing your mortgage is a big step, but how do you decide when to do it? Here some tips to help you decide when the time is right for you.

The rates are lower This is probably the first reason people decide to refinance because it results in lower monthly payments. Generally, if rates drop 1 percent or more - it’s a good time to refinance.

You need extra money Need to pay college tuition or a high interest credit card? Because refinancing results in lower payments, the money you save can be spent elsewhere.

You want to reduce the term of your loan Many people refinance to save money over the life of their loan. For example, if you currently have a 30-year loan and you refinance to a 15-year loan, after you refinance you may have higher monthly payments but you will pay off your loan quicker.

You want to convert your adjustable loan to a fixed loan If the rates are lower than they were when you got your loan, switching to a fixed rate mortgage can offer more security and stability as well as save you money!

You want to consolidate debt Loans such as second mortgages, credit lines, student loans and credit cards can often be consolidated when you refinance. Plus, consolidating your debt can result in tax savings, since consumer loans are not tax deductible, but a mortgage loan is tax deductible.

Here are more helpful links

Misc Links

City of Austin Crime Stastics  

Texas Property Code

Appraisal Districts

BCAD Bastrop County

HCAD Hays County

TCAD Travis County

WCAD Williamson County

Williamson County Deed Records

Travis County Deed Records

I wanted to create a central place you to view home builders in Austin and surrounding areas.  It might not include all of the builders but, I hope you find this to be a comprehensive list of the home builders in the surrounding areas. 

Armadillo Homes, Capital Pacific, Centex, David Weekley, DR Horton, Gehan Homes, Highland, Kimball Hill, Lennar, Mercedes, Meritage, Morrison, Newmark, Partners in Building, Perry, Plantation, Pulte, Reytex, Ryland, Standard Pacific, Streetman, Wilshire, Toll Brothers

1.      What’s the difference between pre-qualification and pre-approval?

      Pre-qualification is a simple process. The buyer is asked specific questions about their income, assets and liabilities.  Based on this information, they are provided with an amount for which they may qualify. This process can be done strictly on a verbal level or electronically over the Internet.

 On the other hand, a pre-approved buyer is one who is actually approved for a loan of a certain amount.  The pre-approval process is much more involved.  The borrower will provide proof of income, assets and liabilities and this information will be verified by the lender.  Because of this verification, pre-approved buyers are much more attractive to sellers than pre-qualified buyers.

 2.      When dealing with borrowers, what concerns lenders the most?When dealing with borrowers, lenders’ main concern is risk.  Lenders proactively manage these risks by requiring four things from a borrower:

       1.Down Payment – statistics have proven that borrowers who put down 10% or more unlikely to default on a loan.

1. Excellent Debt to Income Ratios – borrowers with high debt and low income are a high risk because they are using too much of their income to pay their current debt; e.g. credit card debt, car loans, and so on.  We describe a person with high debt and low income as having a high DTI (debt to income ratio).
2. Job History – long term employment is a good predictor that a borrower will have a steady stream of income, which will not be interrupted by a career change or termination.
3. Excellent Credit – a credit score tells an underwriter a great deal about a borrower.  Lenders take a close look at FICO scores.  FICO stands for Fair Isaac Credit Organization, the organization that developed the formulas used by credit bureaus to calculate credit scores.  (Go to www.myfico.com to learn more.)

 3.      Why do credit scores vary?  And what do lenders like?

The three major credit bureaus are:  Experian, Equifax and TransUnion.  Credit scores will vary from bureau to bureau because each bureau puts different emphasis on different factors; these factors are delinquencies, too many credit cards, balances that are too high, too many recent credit inquiries, tax liens, judgments, bankruptcies, length of credit history, and so on.Credit scores are calculated using a scorecard that allocates points for each of the above factors; however, lenders do not get to see the entire scorecard, all they see are the final scores.  FICO scores can range from 300-850. 

I am involved with the largest real estate investor community in Austin.  If you are a member of RECIAustin, you may know the President of the club, Ashton Mouton.  The people I work with directly work with Ashton to help him enhance his investing capabilities, just the other day they were out in Killeen looking at commercial and residential multi-family units.  I would like for you to meet the people I work with and see what we are doing differently in Austin.  We will have over 100 investors and small business owners and I would be happy to introduce you to many of them. 

We are not an equity sharing group.  We are a group of investors where we all share the same knowledge base of about 38+ strategies.  We network to find deals, put them together, fund and complete them.  We do not share equity unless we partner up with one another to take down a deal. 

            As we all know, real estate is all about networking and leveraging one another’s talents to find the deals we want.   We primarily deal in residential purchases and multifamily dwellings.  Our community has a lot of investors who network together to meet people and combine resources to get our individual deals done.  As I mentioned before, we all share the same knowledge base so it’s very easy for us to help one another using many different strategies. 

            If you are looking to expand your strategies in today’s market or if you are looking to network with a group who are like minded in real estate investing, you should check us out.  Its not for everyone however, I can tell you I have met many seasoned and novice investors get involved in this community and then go on to produce some phenomenal results.

Why not come out to meet these people I am working with.  Its will only take 2 hours out of your day to see what the largest real estate investor group in Austin is all about!  Can you meet me this Thursday at 6:45 at the Holiday Inn Arboretum (183 & MoPac) and I can introduce you to the people I work with and show you how we are all investing together?