What’s a Closing Disclosure and Why is it Important?

Imagine that you’re nearing the closing of your home loan. And what a process it has been. Pre-approvals, house hunting, income verification, inspections, appraisals and so much more. For some, the amount of paperwork feels daunting. But if you’ve prepared a bit ahead of time, you’ll keep a cooler head while your eyes stay on the prize of the American Dream.

Closing a home loan can be a whirlwind activity, with a frenzy of dozens of documents to be signed and verified, and instructions of each one coming in from lenders and lawyers with the verbal rapidity of an auctioneer.

Each document is significant, based on its own role in the loan package. A prime example is the Closing Disclosure. There are numerous documents spread between real estate agents, lenders and appraisers but the Closing Disclosure is one of the big dogs you’ll encounter when it comes to closing day.

This is not to be confused with the Loan Estimate, a three-page document covering general information about the loan and property. While not part of closing documentation, the Loan Estimate breaks down you closing costs into a detailed explanation of origination charges (to cover lender expenses), third-party charges like taxes and homeowner’s insurance, and the estimated amount of cash needed at closing.

So, what exactly is the Closing Disclosure? It technically covers the same points as the Loan Estimate, but includes additional information regarding the escrow component of you loan. To understand the Closing Disclosure is to know what escrow is. Escrow is money that your mortgage lender puts into a separate account that pays your future property taxes and insurance costs. It’s common to have escrow with a mortgage, but isn’t always necessarily required.

The most important thing to be aware of is to receive and sign it three days before closing, which is required as part of the new Dodd-Frank guidelines. If it is not signed and returned to the lender within that time frame, the closing will be delayed.

And this is quite probably the most significant part of the Closing Disclosure. It’s one thing to understand the terms outlined in it-which should be pretty familiar because you’ve likely discussed this already with your real estate agent-but it’s just as important to understand the details as it is to promptly sign it. The last thing anyone wants or needs is a surprise delay arising at the closing.

Understanding the terms of the Closing Disclosure will help lessen your concerns before going to the closing.

Hopefully, a seamless home loan closing is a reality when you understand the Closing Disclosure (and what funds will be necessary to bring to the closing).

For more information, contact our office today!

How To Improve Your Financial Fitness

Did you know financial fitness can save your life? Well, maybe not literally. But being well informed about money can reduce stress and help you and your family live a healthier and happier life. Here are three tips to get your started

Tip #1:

The U.S. has one of the lowest personal savings rates amount the world’s economically developed countries.

As of this year, people in the U.S. have saved less than 5% of their disposable income, on average, according to the U.S. Department of Economic Analysis. While that number has undoubtedly increased over the last few years because of hard lessons learned during hard economic times, Americans as a whole still need to save more.

Saving money is crucial to financial well-being. Savings can help you cope with financial emergency, make a major purchase, and even get ready for retirement.

Saving is easier if you start early and make a habit of it. One good practice is to sign up for an automatic savings plan that deducts money from your paycheck or checking account and sets it aside before you have a chance to spend it. Stash your savings in a savings account, certificate of deposit (CD), investment account or retirement account to meet your future needs.

Tip #2:

Only 40% of adults have a budget and keep close track of how much they spend on food, housing, entertainment and other categories, according to a survey conducted for the nonprofit National Foundation for Credit Counseling.

Approximately half of the adults surveyed said they had a good idea of how much they spend or tried to stay within certain limits. 7% had no idea and no set limits. A budget is an important toll to plan and track how much you’re spending and saving each month. To make a budget, start with your monthly income and then allocate specific amounts for each expense. Try to set aside at least 10% for savings, and no more than 30% on housing, 25% for living expenses and 15% for transportation.

Tip #3:

Nearly 70% of young adults have a credit card and 64% worry about their debts at least occasionally, according to a survey conducted for the National Endowment for Financial Education.

Paying credit card bills and other debts on time is essential because a history of on-time payments strengthens your credit score, which measures your overall creditworthiness. It’s much better to build you credit record slowly and patiently than to take on more credit cards than you can handle or spend more than you can repay.

Strive to learn more about savings, budgeting and using credit responsibly, especially credit cards. Learn to improve your financial literacy, which will, in turn, help you to achieve your goals, both financially and personally.

5 Money-Saving Tips for Your Home

  1. Check Your Plugs – Here’s something you might not know: Plugged in toasters, coffeemakers, TVs and other electronic devices in your home actually use a small amount of electricity even when they’re not in use. By unplugging them when you’re not using these devices, you can save electricity and lower your utility bills.
  1. Go with the Right Light – Compact fluorescent light (CFL) bulbs are an easy way to make your home more environmentally (and economically) friendly. Although they’re a bit pricier up front, CFL bulbs last a lot longer than traditional bulbs and can save you about $30 each in energy over their lifetime
  1. Not-So-Hot Can Save a Lot – Want to see a dramatic difference in your energy bills? All you have to do it lower the water temperature on your hot water heater to 120 degrees from the standard 140. You won’t feel the difference when you wash your hands, but you’ll appreciate the difference it’ll make in lowering your budget.
  1. How Low is Your Flow? – By switching to low-flow showerheads, you can not only reduce the amount of water your family uses every day, but also the energy needed to heat it. On average, you may be able to see a savings of up to $75 per year on water, and up to $50 per year on energy bills by going low-flow.
  1. Care About Your Air – Just before summer is the perfect time to clean and replace the filters on your air conditioning system. A clogged air conditioning filter can increase your cooling costs by 10% or more. Also, consider installing a programmable thermostat. It will increase the efficiency of your air conditioner.


How to Avoid Buying More Home Than You Can Afford

You want to buy a new home. Now is a great time, as rates are still low compared to other points in history. It also gives you a spot in this world that’s yours to do whatever you want with. Nevertheless, in getting ready, there’s one really big question you want to make sure you answer before moving forward: Just how much house can you really afford?

We’ll go over a couple of different ways to calculate that and how to avoid getting yourself in over your head. If you know how much you can realistically spend, you’ll be able to buy with confidence.

Get Pre-Approved

Before you take a look at what’s on the market in your area, it’s helpful to get a pre-approval letter from Texas Loan Star for your mortgage financing. This accomplishes two goals:

  • You’ll get a real dollar figure that can serve as a solid basis for determining just how much you can afford. Your pre-approval letter represents the maximum amount that the lender can approve you for. It shows real estate agents your offer merits serious consideration because you’ve already taken concrete steps to secure financing from us.
  • When you get pre-approved, we will pull your credit in order to determine the amount of your monthly debt payments. This is then put up against income documentation to get your monthly debt-to-income (DTI) ratio – a measure of how much of your monthly income goes toward paying off bills, including housing, car payments, student and personal loans, as well as credit cards. The maximum DTI depends on the type of loan you’re getting, but this is important because it also determines how high of a house you can afford to have and by extension, the cost of the house you can afford.

Don’t Strain Your Budget

A pre-approval will tell you exactly how much you can afford to spend for any given loan. Still, you may not want to push to the upper limits of that approval.

Leave Room for Emergencies

You never know when a sudden illness or an unexpected job loss could throw your budget into temporary disarray. You’ll want to make sure you leave some room in your budget every month to save for your rainy-day fund.

How much should you make sure you’re saving every month? One strategy is to figure out the cost of everything you absolutely need: food and water, housing, medicine, electricity, etc. After that, take a look at anywhere you might be able to cut back. For example, you can probably get by without some of your subscriptions as well as not subscribing to every sports package on cable TV.


We understand life does not always go perfectly. Stuff happens. That’s why one of the lending checks is to make sure your budget isn’t stretched so thin that a temporary life event puts the affordability of your home in jeopardy. For that reason, you have to have reserves in order to qualify for most home loans.

When we measure reserves, we take a look at the assets you have in the bank and determine how long you could continue to make your full mortgage payment in the event of a job loss or other source of financial stress.

Call us today to see what you can be pre-approved for! 713-802-0606 – texasloanstar.com

4 Great Reasons to Refinance in 2019


Are you looking to ditch mortgage insurance premiums? Perhaps you’re looking to pay off your mortgage faster? Do you want to consolidate credit card debt or pay for some home improvements? A home loan refinance could help answer all of these questions for you.

Current rates are still very good. So you can definitely capture a lot of savings by locking in your low rate now. Refinancing can still make a lot of sense for many of you in 2019, depending on your financial goals. Here are four great reasons why you might consider refinancing soon.

1. Ditch Mortgage Insurance

The good news is that you’re not necessarily stuck forever with mortgage insurance payments. Once you reach 20% equity in your home, a refinance could be your ticket out.  If your credit score and other qualification factors are good enough to qualify for a conventional loan, mortgage insurance doesn’t have to be a fact of life.

Mortgage insurance payments aren’t required on conventional loans if you have a loan-to-value (LTV) ratio of 80% or less. To calculate your LTV in a refinance, divide your mortgage balance by the home’s value. (Call us for help.)

2. Shorten Your Term

Depending on your situation, it may make sense to refinance into a slightly higher rate and shorten your term. By doing this, you may find that you actually pay less interest over time than if you were to stay in your 30-year loan.

3. Consolidate Debt

According to Bankrate, the average interest rate on a variable rate credit card was 17.60% as of 2018. Even “low interest” cards averaged 12.52%. If you have a credit card balance in the thousands of dollars following the holidays, those interest charges can add up rather quickly.

If you want to consolidate your credit card debt, it might make a lot of sense to cash out some of the equity in your home.

4. Make More Possible

While it can be all too easy to think of your home as just the place where we entertain our families and sleep, your home is actually one of the biggest investments you can make. You can use the equity to your advantage for any number of things.

For example, if your retirement fund needs a boost, a cash-out refinance can be a great way to make that happen. It’s the same thing if you want to send your kid to college or add a new addition. Maybe it’s not even something that ambitious. Home issues tend to crop up at the most inconvenient time. Your equity can give you the funds to buy that new furnace or repair the roof you may suddenly need.

Sure, interest rates are up a little, but they’re up from near historically low levels. This may make refinancing a viable option for many. Is it the right time for you?

For more information, contact our office today!

713-802-0606 – 2233 Yale St. – texasloanstar.com

Energy Efficient Guide: GreenChoice Mortgage


As the name implies, a “Green Mortgage” is an environmentally friendly type of home loan.  But how do you make a mortgage environmentally friendly? Also known as Energy Efficient Mortgage Programs, Green Mortgages are a special type of loans that are designed to make your home more energy efficient while saving you money at the same time.

Energy Efficient Mortgage Programs let you borrow money specifically to pay for energy efficient upgrades to your home.  The cost can be added into the mortgage used to purchase a home or rolled into your current mortgage through an energy efficient refinance to allow you to make improvements to the home you have now.

The loans can provide an affordable way to make upgrades that may be costly up front, but save money over the long run, such as double paned windows, tankless water heaters, a high efficiency furnace or air conditioning system (HVAC), and new insulation. The result is a more environmentally friendly living space with significantly lower costs for heating and cooling.

How much money can you save with a Green Mortgage and reduce your home’s carbon footprint at the same time? Consider the following:

  • Overall, heating and cooling accounts for 50–70% of the total energy used in the average American home.
  • 60% of the existing homes in the U.S. are not properly insulated.
  • Updating your home’s insulation can save up to 20% on heating and cooling costs or up to 10% of your total yearly energy bill.
  • According to the Department of Energy, energy loss from outdated windows accounts for nearly 25% of the annual heating and cooling costs for the average American home.
  • Even the most basic double-pane window can reduce energy use by up to 24% in cold climates during the winter and by up to 18% in hot climates during the summer.
  • In houses with central air and heating, about 20% of the air is lost due to faulty, outdated duct work.
  • A new Energy Star-rated dishwasher not only uses less energy (a dishwasher typically accounts for 2% of your gas or electric bill) but can also save as much as 1,200 gallons of water a year.
  • Programmable thermostats can save about 2% on heating bills and more than 3% on cooling bills. These numbers can translate into savings of up to $180 a year.

Energy Efficient Mortgages allow families to both save money and benefit the environment at the same time. They also make your home more comfortable and durable. Energy efficient homes are cooler in the summer and warmer in the winter, cost less to maintain, have lower monthly utilities costs, and generally last longer.

Energy Efficient Mortgage Programs can help you do the following:

  • Get money to invest in energy efficient upgrades for a new house.
  • Help you to qualify for a larger mortgage to pay for a house that is already energy efficient.
  • Qualify you for money for green renovations when refinancing a mortgage.
  • Make older homes more comfortable and more affordable with lower utility payments.
  • Help you to use less energy to maintain the temperatures in your home and therefore lessen you family’s footprint.

Whatever your reasons for seeking a Green Mortgage, the results are the same: a more comfortable, energy efficient, environmentally sound home that is cheaper to maintain and has lower monthly utility costs.

Call us today for more information on Texas Loan Star’s GreenChoice Mortgage, 713-802-0606 or www.texasloanstar.com


4 Tips for Improving Your Credit!


If you’re in the market for a new home, it’s important to know your credit score. A good credit score can lead to a better interest rate on your mortgage, while a lower score might present some extra challenges. Are you feeling the need to improve your score? Here are a few things you can do before you start house-hunting.

  • Check your credit. Start by requesting your credit reports from the three credit reporting agencies: Equifax- equifax.com – 1-800-685-1111. Experian- www.experian.com – 1-888-EXPERIAN (397-3742). TransUnion- www.transunion.com- 1-800-916-8800. You’re allowed one fee copy every year. Requesting one report from each agency every four months can show you how your credit changes over the year. If you’re short on time, request all three at once.
  • Dispute any errors. Next, look for errors, signs of fraud or outdated information. Are the accounts familiar? Are all balances accurate? Is a closed account listed as open? If you spot an error you’ll need to submit your dispute in writing to both the reporting agency and the company that provided the information.
  • Stop credit activity. Until you apply for a mortgage, it may be a good idea to cease most credit-related activity. That means you’ll want to skip any large purchases, avoid applying for any new accounts, and try not to switch jobs or make any other major life changes.
  • Pay down balances. One of the most important factors in determining your credit score is the amount you owe compared to the amount of credit you have. Ideally you don’t want to use more than 30 percent of your available credit. If you can, work to pay down balances if you’re using more than this.

Good credit can take time to build, but regularly reviewing your information and working to rectify past errors will put you in the best possible position when it comes to getting an optimal interest rate on your mortgage.

What factors affect my credit score?

  • Payment History

This one is relatively simple. If you make your credit card and loan payments on time, this tends to help your credit score. If you have late payments, your credit score will be lower. History and trends matter. A late payment will always lower your score, but if you have a history of on-time payments, it may not affect your score as much as it would for someone who is consistently late. On the other hand, it may take longer for someone who is typically late to build up their score with on-time payments. Late payments, collections and charge-offs are also lumped into this category. Payment history accounts for 35% of the formula; your credit utilization refers to how much credit you’re using.

  • Credit Utilization

Representing 30% of the formula, your credit utilization refers to how much credit you’re using compared to your monthly limits. For example, if you have a credit card balance of $250 and your credit limit is $1,000, you’re utilizing 25% of your available credit.

  • Length of Credit History

The credit bureaus also consider the length of your credit history, which makes up 15% of your total score. This is measured from the time you open up a credit card or close  on a car loan or mortgage. The idea here is that the longer you have your accounts open, the more you can prove or demonstrate that you’ve been responsible with credit. You don’t have to have four credit cards, plus a car loan and a student loan in order to get a mortgage, bust a long history of sound financial responsibility can only help.

  • Credit Inquiries

Credit inquiries make up 10% of your score. If you’re applying for a mortgage, its not a good idea to apply for three new credit cards and a car loan at the same time. This is because credit companies want to know that you’re not overextending yourself with credit. For this reason, each hard inquiry made at the time of application my temporarily knock down your score a little bit.

  • Credit Mix

Your mix of credit accounts for the final 10% of the credit score formula. For creditors, this is all about knowing that you can handle various different types of credit, including both revolving accounts like credit cards and installment loans like a mortgage, student or personal loans.