Mortgage Minutes

This session of Mortgage Minutes provides our readers with some good information about closing dates.

Why Closing Dates Matter

Let’s talk about cash flow and closing dates.  Most home buyers want to have as much cash as possible to buy things for their new home after loan closing, and the closing date you choose can make a difference when it comes to cash flow. This is because your closing date impacts when your first mortgage payment will be due to the mortgage company. For example, if you close your loan on July 30, your first mortgage payment will be due at the first of September. However, if you push the closing date just two days to August 1st, your first mortgage payment will not be due until the first of October. This gives you an extra month (September) with no mortgage payment. Many times, people use this extra cash to cover rent on an expiring lease, or like we mentioned when we started this discussion, this cash can come in handy for new window treatments, accent rugs, and other new decorator items for your new home.

As we can see, the closing date determines when your first payment is due. It is very important to pay attention to this detail when making your contract offer on your new home. The contract includes a date that must be met to close the loan. The wording will generally state the closing must occur on or before X date. Pay attention to this date, and make sure it coincides with your cash flow plans to get that extra month with no mortgage payment. This date is negotiable, so do work with your realtor to make sure the date on the contract meets your needs, and enjoy the extra cash!

Please feel free to contact me if you have any questions or would like help getting a new mortgage or refinancing your existing mortgage to take advantage of the current rate environment.

Brian Bazar, Sr. Mortgage Banker

NMLS# 1969754

PH 817-403-9181 

E: bbazar@home123.com

402 E Trunk Street, Suite G1, Crandall, Tx 75114 

www.home123mortgage.com

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With over 35 years in the banking and mortgage industry,  Brian is recognized as an industry expert. 

Late Breaking News

HOUSTON — (July 8, 2020) — A flurry of homes going under contract in May after COVID-19-related stay-at-home orders expired led to a surge of closings in June, driving home sales volumes back up to levels considered more normal for summertime in Houston – and even beyond 2019’s record pace. However, renewed coronavirus concerns, stemming from a spike in cases across greater Houston and in other parts of Texas, may bring this taste of normalcy to an end by the fall.

Mortgage Minutes

This week we introduce a new periodic content at Houstoning–Mortgage Minutes. Each session of Mortgage Minutes will provide the reader with mortgage news, industry updates, changes in relevant laws and other quality content. Enjoy!

Discount Points

Mortgage rates for both purchases and refinance loans are at historic lows. Even when rates are low, some lenders require a borrower to pay discount points. There are generally multiple combinations of rates and discount points offered by lenders, and the borrower can choose what combination they prefer. A rate with no discount points is called the Par Rate.  One discount point is 1% of the loan amount and is often referred to simply as a “point”. So if your borrowing $300,000, and your lender is charging 1 Point discount, this means you will pay $3,000 to the lender. You may also hear the word “point” when discussing origination fees. Again, 1 point origination fee is 1% of the loan amount. 1/2 a point is simply 1/2 of 1%, or in our loan amount example, 1/2 a point of $300,000 is $1,500. 

It is not always a simple decision regarding paying discount points to get a low rate or not. There are many factors to consider…how long you plan to keep the mortgage, how much cash do you have to spend on discount points, as well as what monthly payment can you afford. The lower your rate, the lower your monthly payment will be. One should compare monthly payments at various rate/point offerings to calculate how long it will take to recoup the upfront cost of the discount points. If you are not planning to stay in your home long enough to recoup the discount point(s), then it may not make sense to pay the discount. Conversely, if you are staying in your home past the recoup period, then you could save hundreds if not thousands of dollars in interest charges over the life of the loan. Always ask your lender for the par rate, and for the lender to provide you with various discount point and rate offerings to determine what is best for you. As always, let your tax preparer know if you paid any discount points (treated as mortgage interest) or origination fees, as both can result in lower income tax bills in many scenarios when itemizing.

Please feel free to contact me if you have any questions or would like help getting a new mortgage or refinancing your existing mortgage to take advantage of the current rate environment.

Brian Bazar, Sr. Mortgage Banker

NMLS# 1969754

PH 817-403-9181 

E: bbazar@home123.com

402 E Trunk Street, Suite G1, Crandall, Tx 75114 

www.home123mortgage.com

With over 35 years in the banking and mortgage industry,  Brian is recognized as an industry expert. 

HAR Update – March 2020

https://www.har.com/content/newsroom?pid=1714

HOUSTON — (April 8, 2020) — As COVID-19 ravages the physical and business health of the nation, its impact on the Houston real estate market only began to set in during the last week of March, and therefore caused little disruption to the month’s overall performance. The full effect of the pandemic is expected to become more apparent when the April housing numbers are tallied.