Why Should You Buy Instead of Rent?

If you’ve been renting an apartment or a home for a while, you may think that it’s not worth it to buy. While you dream of one day owning a home for you and your family, the process seems complicated, and you hesitate at the expense. But part of you knows that one day it would be smart to buy a home rather than throw away your money on rent month after month.

If you’re looking for a real estate broker in Alpine, TX, then Carpenter Real Estate can help. We’ve been in business for three generations, guiding first-time homebuyers toward properties that are perfect for their needs and budget. Let’s take a look at all the advantages of buying over renting:

  • Financial benefits: Perhaps the number one reason to buy a home instead of rent is all the financial benefits that come along with it. Think about it this way: By investing in a home that appreciates in value, you’re investing in your future. One day you’ll be able to sell the home and, hopefully, you’ll be able to sell it for more than you paid for it in the first place, as property usually appreciates in value. Paying your mortgage every month means you’re building home equity, too, which improves your credit-worthiness.
  • Fixed costs: Landlords can hike your rent whenever they want without any real reason. You could be paying more next year than you are right now. But a mortgage is usually a fixed cost. You’ll pay the same each month over the course of a fixed-rate mortgage.
  • Freedom to alter property: Have you always wanted to paint an accent wall? Maybe you want to hang artwork around the house. Landlords won’t look favorably on this, and often don’t even allow pets. But when the property is yours, you can feel free to go nuts and do whatever you want. After all, it’s yours!
  • Tax breaks: Did you know that homeowners can deduct mortgage interest and property taxes? That’s right—you can lower your tax burden by purchasing a home. This is an important thing to factor in when you’re considering the buying vs. renting decision.

Do you need to work with a helpful and experienced real estate broker in Alpine, TX? Then you’ve come to the right place. Carpenter Real Estate is here to lend everyone in the region a hand, from Marathon to Fort Davis. We have a deep understanding and familiarity with how best to negotiate the real estate market in this little corner of West Texas (or as we lovingly refer to it, “The Alps of West Texas”).

You’ll benefit from our firsthand knowledge that our company has built over the five decades we’ve been in business. No matter if you’re looking for a starter home or a ranch with plenty of acreage, we’re here to provide expert guidance. Call us right now to learn more and receive a free consultation. We look forward to helping you find the perfect property!

Should I Get Pre-Approved for a Mortgage Before Looking for a House?

The short answer is definitely, yes, you should. The fact is that with today’s competitive housing market, it’s essential to get pre-approval for your mortgage before you start house hunting.

Many first-time homebuyers are hesitant to get involved in the process because there’s so much paperwork involved. But this is one of those times when, if you snooze, you lose! So it’s essential to get started early on and land that pre-approval for a mortgage so you’ll have it in hand when you find that dream house.

While the world of real estate may seem intimidating, an expert realtor in Alpine, TX can help smooth out the process. Let’s take a look at why getting pre-approval for a mortgage is the ideal first step in the homebuying process:

  • Resolve financial issues: The last thing you want is to find the perfect home for you, only to realize that unresolved financial issues, such as a low credit score, will prevent you from getting a mortgage. Obtaining pre-approval means you’re taking a close look at your finances right away. It’s something you might feel you want to avoid, but if you’re looking to move into a home, you’re going to have to do it at some point. Lenders can help you resolve any financial problems—but they need to know about them first.
  • Narrow the search: Mortgage pre-approval will determine what your price range is going to be. This means that lenders will agree to give you a line of credit on a mortgage up to a certain amount—that’s the top of your price range. Different lenders may give you differing maximum amounts, but this should give you an idea of how much you can feasibly spend.
  • Move fast when you need to: So you’ve found a house that’s in your price range and has everything you’re looking for. Now it’s time to make an offer. But wait—you haven’t gotten pre-approval on a mortgage? That’s going to hold things up. You want to be able to submit an offer and show you have serious interest, which means you need pre-approval.
  • Look for a good deal: Don’t just go to one lender—shop around for the best deal. After all, a home is probably the largest investment you’re ever going to make. It pays to compare the terms lenders are offering and take the deal that best suits your needs.

Are you looking for a trustworthy realtor in Alpine, TX? Then Carpenter Real Estate is the choice for you. We’ve served the region since 1947, selling over 1 million acres of real estate. We’re a family-owned and operated enterprise with plenty of experience in residential property, commercial property and ranches. Over three generations, we’ve built the knowledge base and expertise necessary to navigate all kinds of real estate dealings.

Our roots extend deep into the community because we’re here to stay. We are a member of the Alpine Chamber of Commerce, the Texas Association of Realtors and the National Association of Realtors. Contact us today for a free consultation and to learn more about how we can help you.

How Does the Home Buying and Escrow Process Work?

Are you buying a house for the first time? If so, you might be wondering what you can expect to happen during the home buying and escrow process.

Here is a brief outline from a real estate agent in Alpine, TX about how that entire process works.

Step 1: Disclosures, inspections and credits

The very first step after the buyer and seller agree to a contract is to go through the disclosures and inspections.

The buyer will make a deposit of earnest money with the seller’s brokerage, an escrow agent or an attorney, depending on the terms of the contract. The buyer then reviews and signs any disclosures involved with the contract. These disclosures vary based on the type of property, but will include items such as known flaws with the property, necessary repairs or improvements and potential environmental hazards on the property. All of these disclosures will factor into the contract price.

Next, the buyer must arrange for inspections on the property in accordance with the terms of the contract. This is important for the buyer—the inspection could reveal hidden flaws about the property that make it unappealing or unsafe, and if that is the case, the buyer will be able to back out of the deal without having to forfeit their earnest money.

After inspections, the buyer can either ask the seller for repair work, ask for repair costs to be worked into closing cost credits or ask for a reduction of the price of sale to cover the cost of the repairs.

Step 2: Mortgage

The mortgage process is usually the most stressful part for new property buyers. It’s important to begin it as early as possible to give the lender plenty of time to complete the paperwork. Be ready to produce lots of documentation, including various bank statements, loan information, tax returns, pay stubs, contact information of your employer, explanations of credit inquiries, explanations about large deposits or cash gifts that fall outside your regular income and any other matters that could be material to your financial situation.

After reviewing all of this information, your lender will make their approval decision, and if you’re approved you’ll receive a loan commitment letter that includes the lender’s statement of willingness to fund the mortgage, granted you meet certain conditions.

The lender will usually order the appraisal, and if it comes in below the purchase price, the lender can decline to approve your loan unless the seller is willing to change the purchase price, or you change your down payment amount. The lender will also submit a request for title commitment to a title company, while you are responsible for purchasing homeowner’s insurance coverage and any necessary hazard insurance coverage.

Step 3: Closing

The final part of the transaction is the closing. You’ll submit your final loan documents to the escrow agent, and will then attend the closing at the title company, or the office of an escrow agent or closing company. You’ll sign all the documents, pay the remaining money of your down payment and closing costs, receive the deed and keys and take possession of the property.

For more information about how these processes work, contact a real estate agent in Alpine, TX!

What Happens to the Earnest Money If a Buyer Backs Out?

Every real estate transaction requires the buyer to submit an earnest money check at the outset of the sale, along with the signed purchase contract. This money demonstrates good faith on the buyer’s part, and the amount is usually determined by the seller. Its purpose is to provide the seller with some compensation in case the buyer ends up pulling out of the deal for any reason in which the seller is not at fault.

Here’s an overview from a realtor in Alpine, TX of what could happen to earnest money if the buyer backs out of the purchase, as well as situations in which the buyer can retain his or her earnest money.

When canceling the agreement does not result in lost earnest money

All contracts for real estate purchases have deadlines for achieving certain milestones in the transaction process. These deadlines are subject to negotiation on the part of the seller and buyer. While these deadlines can be changed if both parties are willing to do so, there is nothing that says each party must be flexible, so it’s important to set these deadlines at realistic dates from the outset of the transaction.

Each of these deadlines gives the buyer a chance to back out of the contract without losing their earnest money as long as he or she provides appropriate notice of the intent to withdraw from the purchase.

One example is the inspection contingency deadline. The buyer must negotiate a deal that gives them enough time to complete all desired inspections. If, during the inspection, the buyer discovers an aspect of the property he or she simply cannot live with, the buyer will have the option to drop out before that deadline without forfeiting the cash. Note that this only applies before the deadline—if the buyer discovers something else about the house that makes them wary but this discovery occurs after the deadline, the seller will be able to keep the earnest money.

Another big example is the loan contingency deadline—the date by which the buyer must secure financing for the house. If this date passes without word from the buyer, the seller will be able to keep the earnest money, and at this point that money is nonrefundable.

Getting back your earnest money

If you’re the buyer in a real estate transaction and want to back out of the deal, it’s important to know how to get your earnest money back. Depending on the terms of your contract, that money could be held in escrow by a title company, broker, bank or attorney. The buyer should contact that escrow holder, apprise them of the situation and the need to release the money, and then check to see if any specific forms must be signed and submitted to get that earnest money back.

A realtor in Alpine, TX can work with you throughout your real estate transaction to ensure it goes as smoothly as possible. Contact Carpenter Real Estate today to learn more about how we can help.

Should I Get a Sewer Inspection Before Buying Property?

As realtors in Alpine, TX, we often get asked whether one should have a home sewer inspection performed when they purchase a home. The answer to this question is just about always “yes”—it’s an extremely wise move, regardless of the age or condition of the property, simply because it could end up saving you quite a bit of money and headache down the road.

Sewer lines can suffer quite a bit of damage over the years due to pipes shifting and cracking, collapses, worn-out materials or tree roots invading the pipe. Repairing a sewer line that has suffered some level of damage could become extremely costly, so you’re going to want to know about these risks before you purchase the property.

Usually, a sewer inspection will not be included with a regular house inspection. You’ll have to specifically request this as an add-on service if the home inspector provides it, or you’ll need to seek the services of a specialist who handles this type of inspections. The cost will generally be anywhere from $200 to $450 depending on where you live.

About sewer lines

All homes have sewer lines that are buried underneath the ground. These pipes take the wastewater from your sinks, toilets and washing machines away from your home to the treatment plant in your municipality. There are several different types of sewer lines:

  • Cast iron pipes: These types of sewer lines are generally found in older homes and neighborhoods, though they are still sometimes installed in modern houses. They are capable of withstanding more pressure than other pipe materials, but are also susceptible to corrosion. They’ll usually last 30 to 50 years.
  • Clay pipes: These pipes are also found in much older neighborhoods, though they are still very rarely installed today. They are heavy and difficult to work with, which is why more areas are turning to plastic materials. While they are highly resistant to chemical degradation, they are also much more susceptible to being damaged by tree roots.
  • Fiber conduit pipes: These pipes are made out of tar paper, and are also referred to as Orangeburg pipes. They were frequently used from 1950 through the early 1970s, at which time they were mostly replaced by PVC pipe. It is developed out of different layers of wood pulp compressed together. They can last around 50 years in optimal conditions.
  • Plastic pipes: The most common types of plastic pipes are ABS and PVC, with PVC being the most common type of pipe used in homes built around the United States today. They are smooth and inexpensive. Their smoothness makes it less likely that tree roots will attach to them, but they are also more prone to breakage than other types of materials.

In your sewer line inspection, the inspector will determine the kind of piping you have, the condition those pipes are in and whether there is any cause for concern about their condition in the near future.

For more information about sewer line inspections, contact a realtor in Alpine, TX today.

The Importance of a Home Inspection When Buying a House

The process of purchasing a new home is always exciting, and it’s easy to get swept up in all that excitement and let some of the important details slip by. For example, you must get a home inspection done on the property before purchasing any homes for sale in Alpine, TX.

Home inspections can save you a significant amount of time and money, and are a crucial part of any residential real estate transaction. Here are just a few reasons why they are so important:

  • They uncover potential problems you might not have noticed: There is so much more to every home than what you can just see from the façade or from a simple walk-through. No matter how old the home is, there could be some significant problems with the house that the average buyer (and even the average realtor) would be unable to discover on their own. Home inspectors are trained in analyzing all the wiring, plumbing and structural aspects of the home in addition to the more cosmetic aspects. In some cases, these inspections can reveal some significant issues with the home you wouldn’t have otherwise discovered until after the purchase, allowing you to either adjust or revoke your offer to the seller.
  • They can help you save a lot of money: If the inspection does reveal some significant problems with the house, you can either lower your offer by the amount of money it would cost to fix those issues or ask the seller to make the repairs before the purchase. This could end up saving you a significant amount of money. So while the inspection will cost you several hundred dollars, it’s absolutely worth it in the long run.
  • They can help you negotiate a price: If your potential home is just on the edge of your price range, the results of the inspection could give you the leverage you need to talk the seller down. You could add some language into the purchase agreement that allows you to back out of an agreement in the event of certain revelations arising from the inspection, or include clauses requiring the seller to make certain repairs before you exchange any money.
  • They give you a much clearer picture of what you’re getting into: The inspection will point out every potential flaw throughout your new home. Even if some of the issues don’t need to be corrected right away, it’s important to have an idea of the kind of work you’ll need to do on the home within the first five years or so after you make your purchase. The more you know from an inspection, the less you will have to worry about being surprised a little later down the road by major issues with repairs and replacements.

These are just a few reasons why you should absolutely not skip over a home inspection when analyzing homes for sale in Alpine, TX. For more information, contact the team at Carpenter Real Estate today.

What Credit Score Do You Need to Buy a House?

You want to buy a house, but you already know that your credit score is on the poor side of the spectrum. The good news, though, is that you might still qualify for certain types of home loans, as different types of mortgages will vary in the minimum credit scores they are willing to accept. So, what range should your credit score be in before you even think about buying a house? Let’s ask a real estate agent in Alpine, TX!

Credit score ranges

First things first, let’s look at credit score ranges. In the United States there are three credit reporting agencies (TransUnion, Experian and Equifax), all of which individually grade your credit history on a range from 350 to 850. Since not all creditors will report to all three, your score from each credit agency will be different. Keep in mind that a score of 700 is generally considered good, while a score below 620 is generally poor:

  • 740 and higher = great credit
  • 680-739 = average credit
  • 620-679 = fair credit
  • 580-619 = poor credit
  • 500-579 = bad credit

FICO score

There are many steps to the home loan process, but checking your FICO score is the first step a mortgage lender takes when checking if you qualify for their loan. Keep in mind that although there are a number of factors that play into home loan qualification, your credit score is the most important one. So, what is the minimum credit score a person needs to purchase a home? The answer depends on the type of home loan you qualify for.

Here are the typical average minimum FICO scores by mortgage types:

  • Conventional loan: 620 and up
  • FHA 203k loan: 620 and up
  • USDA loan: 640 and up
  • VA loan: 620 and up (some lenders will approve a score of 580)
  • FHA loan: 580 and up

Minimum credit score to get a mortgage loan

First time homebuyers with poor credit ratings may still qualify for an FHA loan, as these loans have lower requirements than other loan options. FHA loans are backed by the Federal Housing Administration, but the FHA doesn’t issue loans itself. What they do is insure them in case the borrower defaults on the loan at any point. It is done this way to reduce the risk of the lender accepting a lower credit score to buy a house.

For an FHA loan with the lowest credit requirements, the borrower must have a score of at least 500 with a 10 percent down payment (this is not typical). The average (and most likely) FHA loan goes to borrowers with a 580 or higher credit score with a 3.5 percent down payment.

In general, your credit score will affect the interest rate you can get. For instance, someone with poor credit will have higher mortgage rates and increased closing costs, and therefore a higher monthly payment. And the higher your credit score, the lower all of this will be.

Contact Carpenter Real Estate today to work with a phenomenal real estate agent in Alpine, TX!

How to Prepare Your Credit for Buying a Home

Like many Americans, this is the year you plan to buy a house. But while you’ve been saving your pennies, checking out neighborhoods you are interested in living in and searching houses online, you may not have considered the important role your credit score plays in your ability to secure a loan. For example, a conventional mortgage loan typically requires an average FICO score of at least 720, and people with scores at 580 may qualify for an FHA loan.

Here’s some information from a realtor in Alpine, TX for how to prepare your credit for buying a home:

  • Review your credit report: The first thing you need to do is check your credit report for any issues a few months before you plan to apply for a mortgage. For those who pay their bills on time, checking your credit for mistakes two to three months in advance should suffice. However, if you know you have late payments or other negative things that stand out on any of your accounts, you might want to start your review six to nine months in advance to allow enough time to remedy any issues.
  • Take care of inaccuracies: You may look at your credit report and find errors like an account you didn’t open, an account that’s not yours or an “unpaid item” that is actually paid off. File a dispute with the credit reporting agency immediately. It’s not unusual for someone to discover an inaccuracy on their credit report, so be thorough.
  • Have several tradelines: You will need at least three tradelines—such as credit cards, car loans, student loans, etc.—that have been active within the past 12 to 24 months to apply for a conventional loan; you need two tradelines for an FHA loan. Talk to you realtor about opening additional tradelines if you need them.
  • Don’t close old credit: Don’t close older credit cards—they can actually help boost your credit score. To keep old cards active, use them every few months and pay them off in full.
  • Don’t open new credit: New credit, meanwhile, can temporarily lower your score. For this reason, avoid opening new credit lines at least six months out from applying for a mortgage.
  • Avoid using credit: You’re excited about purchasing a house, and now you’re in escrow. This may lead you to buy new things for your new house on credit—like furniture, appliances and more—but you should avoid buying on credit (or applying for other loans, like a car loan) before closing. Being in escrow doesn’t mean you’ve got the house; in fact, if you have a debt utilization ratio above 30 percent right before closing, this could disqualify your home loan.
  • Leave money accounts alone: A mortgage lender will ask you to provide several months of bank statements, so don’t close accounts or make large money transfers. To create less paperwork, leave accounts as stable as possible for at least three months.

Are you in the market for a realtor in Alpine, TX? Then call Carpenter Real Estate today!

Is Mortgage Insurance Worth It? Info from a Realtor in Alpine, TX

Whenever you decide to take out a new mortgage, you’ll be offered mortgage protection insurance (MPI). There are several variations of this insurance available, but in general it is used to protect your loan payments in the event you lose your job, have sudden unexpected medical bills or experience a life-changing disability.

But is mortgage insurance actually worth it, or is it just another way for the mortgage company to get more money out of you? The answer primarily depends on your age, health and financial situation. Here’s some information from a realtor in Alpine, TX about whether mortgage insurance is right for you.

Benefits of mortgage protection insurance

Perhaps the most valuable benefit of MPI is that it is handed out on a “guaranteed acceptance” basis. There are very few, if any, questions on an application for MPI that will prevent you from getting the coverage you need, which is especially important for people who have health issues and who often have problems getting other kinds of insurance at a reasonable rate.

If you are someone who works in a high-risk occupation, this is also another way for you to protect your investment and your estate. People in the construction industry, for example, are more susceptible to injury and death on the job, and often have a hard time getting disability insurance. Mortgage protection insurance is an easier policy to get that will provide you with some protection for your home.

Drawbacks of mortgage protection insurance

If you already own your home outright, then MPI doesn’t do anything for you.

In other circumstances, keep in mind that MPI is a declining-benefit policy. You’ll pay a set premium for the entire life of the mortgage, but the payoff amount decreases as you continue to make your mortgage payments.

In addition, it might not always be the best decision to pay off most of your mortgage in the event of your death. Depending on the monthly amount of the mortgage payments, it might make more sense for you to leave behind lump sums to your beneficiaries and allow that money to collect interest while continuing to make the mortgage payments as outlined in your original loan agreement.

If you do decide to go with MPI, make sure you have a plan for how you’ll choose your policy. You shouldn’t automatically go through the same bank or lender providing your mortgage—you should do some shopping around to make sure you can get the best available rates and benefits.

There are also some alternative options you can choose. For example, if you’re considering an MPI plan that would be payable upon your death, you might consider a life insurance policy instead, as the policy would not decline in value over time and would, depending on the value of the policy, cover more than just your mortgage in the event of your death.

For more information about mortgage protection insurance, contact Carpenter Real Estate to speak with an experienced and knowledgeable realtor in Alpine, TX.

Is It Normal to See a Credit Dip After Buying a House?

If you recently purchased a new house, you’ve probably been carefully watching the progress of your credit score, as your rating affects your ability to get a mortgage with lower interest rates. After the purchase of your home goes through, it’s not uncommon for you to experience a credit dip.

Here’s some information from a realtor in Alpine, TX about how you can expect your purchase of a new home to affect your credit score.

Certain factors give a hit to your credit score

You’ll probably start seeing some minor hits to your credit score as soon as you start applying for mortgages with different lenders. Whenever you apply for pre-approval for a mortgage, lenders will perform a credit inquiry to see if your credit is sufficient for them to give you a loan. A hard credit pull essentially tells the algorithm you are actively looking for a new source of credit, which will cause a slight dip in your credit score.

If you want to limit the effect these hard credit pulls can have on your credit score, you should apply for pre-approval with several different companies in a single two-week span. With some credit scoring models you might be able to get away with drawing them out over a longer period of time, but by limiting them to a shorter time period you also limit the hit that your credit score has on you.

Actually opening up a new mortgage will cost you even more points in your credit rating, especially if it’s the first mortgage you’ve ever taken out. There will be a massive increase in debt, which will cause your score to drop. However, by making your mortgage payments on time, you’ll slowly build that credit score back up.

Debt can be a good thing

Keep in mind that adding to your credit mix can actually help your credit profile in the long run. About 10 percent of your credit score is determined by your credit mix, so if you have a greater variety, you’ll actually help your score.

And again, by paying your mortgage on time every month, you’ll start to build your credit score up again relatively quickly. In fact, for many people, it will only take a few months before your score is even higher than it was before you actually started applying for loans!

So, if you see your credit score decrease during and immediately after the home buying process, don’t fret. In the long run, you’ll actually help your credit score so long as you’re able to continue making your monthly payments in full and on time.

If you have any further questions about how purchasing a new home can impact your credit rating, or questions about any other financial issues that might arise as you seek a mortgage, feel free to contact a realtor in Alpine, TX. Get in touch with Carpenter Real Estate today, and we’ll be happy to provide you with any further information you want or need.