Wealth creation involves accumulation of assets and increasing net worth over an extended period of time. Among one of the most common methods to achieve this is purchasing a home. Read on to learn how investing in a new Empire home can help you build long-term wealth.

This concept combined with real estate appreciation long-term increases your net worth, and makes managing your finances and planning for the future easier. When owning and paying off your own loan, your value of assets increases over time which becomes evident if you eventually sell your home.

Other investments sometimes require a capital gains tax on any return that you make, depending on your taxable income. The profit you make from selling a home, however, cannot be taxed if the amount is $250,000 or less for a single borrower.

And although the real estate market has been fickle over the past four decades, residential real estate has increased in value over time, making it a good investment decision at any point.

Overall, it makes sense to start investing early so investments have more time to appreciate. This can help shape the financial skills while your children are young, setting them up for success in the future.

Our preferred lenders also provide great expertise, access to special incentives, and financing options that make purchasing a home easier. Learn more about some of the industry’s top mortgage lenders, including Interlinc Mortgage (Houston area) and Movement Mortgage (San Antonio and Austin area), that we’ve teamed up with to help you build your wealth and secure a new home mortgage.

Looking to learn more about the homebuying process? Learn how to find the right neighborhood for you, and read our homebuyers’ guide to finances.

Discover available homes for sale in Houston, Austin, and San Antonio today.

*Disclaimer: This post is solely for informational purposes and is not a substitute for professional advice. We encourage you to always work with a financial expert to discuss your best options and what is right for you.

On the hunt for a new home in a rural or suburban neighborhood? You may be eligible to receive a USDA loan which makes homeownership more attainable. This type of loan aims to promote rural development and provide affordable financing options for qualified individuals. We sat down with Michael Nassafer, Market Leader of our preferred lender, Movement Mortgage, for his perspective on all things USDA loans. As a USDA loan expert himself, he explains the benefits, eligibility requirements, and unique advantages of this loan option.

What is a USDA loan?

A USDA loan is a government-issued loan program designed to support rural development and provide accessible financing options.

What properties and households qualify for USDA loans?

To qualify for a USDA loan, your property and household must meet the following criteria:

• Location: The property must be in a USDA-approved rural area, as determined by the USDA map based on census data.
• Property type: USDA loans are available for single-family homes, townhomes, and eligible condominiums that are approved by Fannie Mae or Freddie Mac.
• Income limits: Borrowers must fall below the max income limits. USDA loans have income restrictions based on the area’s median income. These limits vary depending on household size and the specific location.
• Debt-to-income ratios: Borrowers must meet certain debt-to-income ratio guidelines to ensure they can manage their monthly mortgage payments.
• Minimum credit score: While there is no strict minimum credit score requirement for USDA loans, a score of at least 640 is generally preferred.

What are the benefits of obtaining a USDA loan compared to other loan options?

Obtaining a USDA loan offers several benefits, including:

• Zero down payment: Unlike conventional or FHA loans that require a down payment, USDA loans offer 100% financing, making homeownership more attainable.
• Competitive interest rates: Lenders can offer favorable interest rates due to the USDA guarantee.
• Low monthly mortgage insurance: USDA loans have low monthly mortgage insurance fees compared to conventional loans, which require private mortgage insurance for low down-payment options.
• Flexible credit guidelines: While a credit score of 640 or higher is preferred, USDA loans have more flexible credit requirements compared to conventional loans.
• Potential to combine: USDA loans can be combined with other financing or assistance programs, such as the Mortgage Credit Certificate (MCC). The MCC can help reduce monthly property tax payments, providing additional financial benefits to borrowers.

Are there any upfront or ongoing fees associated with USDA loans that borrowers should be aware of?

A few considerations:

• Upfront guarantee fee: The USDA charges an upfront guarantee fee, which can be rolled into the loan amount.
• Annual fee: USDA loans also include an annual fee, which is calculated based on the loan’s current balance and is paid as part of the monthly mortgage payment.

What is the process of applying for a USDA loan, and how long does it typically take to get approved?

To apply for a USDA loan, borrowers should follow these steps:

• Find a USDA-approved lender: Work with a lender experienced in USDA loans, such as Movement Mortgage, to guide you through the process.
• Gather necessary documents: Prepare documents such as income verification, bank statements, credit history, and identification.
• Complete the application: Submit the application to the lender, providing accurate and thorough information.
• Wait for approval: The approval process takes approximately 30 days from application to closing, depending on various factors.

Looking to expand your knowledge on all things related to mortgages? Click here to debunk 5 financing myths with Movement Mortgage, and learn all there is to know about rate buydowns.

Wealth creation is the process of accumulating assets and increasing net worth over time. There are many ways to do this, but one of the most popular and reliable methods is by purchasing a home. Read on to learn the benefits of real estate investment, and how your new Empire home can help you build long-term wealth.

Amortization allows borrowers to pay off a debt gradually and systematically, making it easier to manage their finances and plan for the future, assisting with stability and overall wealth creation. In contrast to renting, only the landlord receives a long-term benefit. When owning and paying your own loan, your wealth and value of assets increases over time which becomes evident should you choose to sell your home in the future.

Stuart further explains that at a rate of 5.7% appreciation each year, your $500,000 home would be worth about $780,000 in a decade. Your initial cash-out at purchase of $25,000 leveraged itself into approximately $280,000 of net-worth accumulation, yielding more than a 10x return by simply making your house payments. Purchasing a home enables this to be passively accomplished, which grows your initial investment exponentially and builds wealth long-term.

And while there have been fluctuations in the real estate market over the past four decades, residential real estate has appreciated in value over time — making it a sound investment at any point.

Learn more about some of the industry’s top mortgage professionals, including BankSouth Mortgage, that we’ve teamed up with to help you build your wealth and secure a new home mortgage.

Looking to learn more about the homebuying process with Empire? Check out our resources for new homebuyers and learn about the advantages of using one of our preferred lenders.

*Disclaimer: This post is solely for informational purposes and is not a substitute for professional advice. We encourage you to always work with a financial expert to discuss your best options and what is right for you.

You may have heard the term “temporary buydown” during your new home search in Atlanta, but what does it mean? We asked Shachi Bhardwaj of BankSouth Mortgage to give us the details on how this financing arrangement works to help you understand its benefits.

What Is a Temporary Rate Buydown?

A buydown is a way for a borrower to obtain a lower interest rate for a period of time. When offered by one of our preferred lenders in Atlanta, Empire will purchase discount points against the buyer’s mortgage loan which is the equivalent of paying interest upfront at closing. It allows the buyer to make lower mortgage payments for the first few years of their loan, with payments increasing slightly once the buydown period is over.

A builder-paid buydown allows Empire to reduce the buyer’s monthly mortgage payment for an initial period — typically one or two years — and can bring the borrower significant savings. The amount of savings each month depends on the terms of the buydown, interest rate, and the loan amount.

How It Works

Depending on your overall goals, this is a great way to reduce your monthly mortgage payment without taking on additional risk with other loan options such as Adjustable-Rate Mortgages (ARMS) since buydowns are fixed-rate programs. Buying a home is an exciting milestone but can come with additional acquisition costs. With our 2-1 Buydown Program, buyers are able to lock in lower mortgage payments for the first two years, making it easier to transition to homeownership and move on their own timeline. Between things like new furniture, blinds, and appliances; a seller paid buydown is a great solution to help offset out-of-pocket expenses. There are six buydown programs that buyers can take advantage of when certain eligibility requirements are met. Here are the details:

• Buydowns are available for Conventional, FHA, and VA loan programs.
• They are only offered on 30-year fixed purchase loan programs.
• The borrower must qualify at the final interest rate and meet all loan guidelines.
• The home must be the buyer’s new primary residence.

2/1 Buydown

• The buydown period on a 2/1 Buydown is two years.
• In year one, the mortgage payments are based on an interest rate that is 2% below the actual interest rate of the mortgage, which is called the Note rate.
• In year two, the mortgage payments are based on an interest rate that is 1% below the Note rate.
• In year three and the remaining years of the loan, the mortgage payments are based on the Note Rate.
• The borrower saves money each month during the 24-month buydown period by having lower monthly payments.

1/0 Buydown

• The buydown period for a 1/0 Buydown is one year.
• In the first year, the buyer’s mortgage payments are based on an interest rate that is 1% below the Note rate.
• In year two, the borrower starts paying the mortgage based on the Note Rate and will continue to do so for the remaining payments on the loan.
• The borrower saves money each month during the 12-month buydown period by having lower monthly payments.

If you’re purchasing a home valued at $600,000 with 10% down, the monthly principal and interest payment would be approximately $3,413 at a 30-year fixed rate of 6.5%. But with a 2-1 buydown, here’s how things change:

• Your monthly payment for the first year would be around $2,736 ($677 lower at the 4.5% discounted rate for the first year).
• Your monthly payment in year two would be around $3,066 ($347 lower at the 5.5% discounted rate for the second year).
• This translates into savings of $8,124 for the first year, and approximately $4,164 for the second year — total savings of $12,290 over the two-year period.
• In comparison, if you used $12,000 to negotiate a lower sales price to $588,000, your monthly payment at 6.5% is $3,344 — a difference of only $99.

The Benefits

Buydowns reduce your interest cost, making your dream home that much more attainable. In today’s market, they allow you to take advantage of today’s home prices and lower payments, saving you money during the initial loan term and allowing you to ease into your homeownership experience.

• A buydown temporarily reduces your interest rate, saving you (the borrower) money and lowering your payments during the initial buydown phase.
• The Builder pays the buydown fee, not the borrower.
• This type of financing arrangement could make sense for homebuyers whose income will increase in the years to come.

The buydown funds are held in an escrow account and if and when the rates drop, you can refinance into a lower monthly payment for the remainder of the term. The balance (if any) of the funds in the escrow account will be applied to your principal balance if you refinance before the buydown period is complete. In other words, you will not lose any of the un-utilized seller-paid buydown funds.

Is It Right For Me?

When it comes to finances, the best way to determine what’s right for you is to speak with a Mortgage Loan Officer. These industry experts can point you in the direction of the best financing options based on your individual scenarios, goals and needs.

Next, discover our preferred lenders, the benefits of buying a new home, and the top reasons to move to Atlanta.

You may have heard the term “rate buydown” on your new home search in the Carolinas, but what does it mean? We asked Flynn Harris of Atlantic Bay Mortgage Group to give us the details on how this financing arrangement works to help you understand its benefits.

What is a Rate Buydown?

A buydown is a way for a borrower to obtain a lower interest rate. When offered by one of our preferred lenders in the Carolinas, Empire will purchase discount points against the buyer’s mortgage loan or pay interest upfront at closing. It allows the buyer to make lower mortgage payments for the first few years of their loan, with payments increasing slightly in the third year.

How it Works

Depending on your overall goals, this is a great way to reduce your monthly mortgage payment without taking on additional risk with other loan options such as Adjustable-Rate Mortgages (ARMS) since buydowns are fixed-rate programs. They can also be used on almost all loan types such as VA, Conventional and FHA, and the prepaid interest required upfront is usually paid for by the seller.

“Mortgage interest rates have trended higher during the last year. A 2-1 buydown is a temporary interest rate buydown for the first 2 years of the loan, lowering the interest rate by 2% for the first year of monthly payments and then by 1% for the second year of monthly payments,” says Harris. “The interest rate then goes back to the original rate for years 3 through 30. Essentially, it allows homeowners to save money by reducing the principal and interest payments collected during the 2-year buydown period.”

Types of Rate Buydowns

While there are a few rate buydown structures to choose from, the most common is a 2-1 buydown. With a 2-1 program, monthly mortgage payments will be at their lowest in the first year and will increase slightly in the following year. The full interest rate will come into effect in the third year of the loan. In most cases, a 2-1 buydown will cost fewer points than other buydown programs, but the savings may also be less. Take a look at our example below illustrating how this rate buydown structure works.

The Benefits

Buydowns reduce your interest rate, making your dream home that much more attainable. In today’s market, they allow you to take advantage of low home prices and low payments, saving you money during the initial loan term and allowing you to qualify more easily for your mortgage.

If and when rates drop, you can refinance into a lower monthly payment for the remainder of the term. With your funds being held in an escrow account, the balance of the escrow fund will be applied to your principal balance. In other words, you won’t lose any of your incentives like a permanent rate buydown.

Is it Right For Me?

When it comes to finances, the best way to determine what’s right for you is to speak with a Mortgage Loan Officer. These industry experts can point you in the direction of the best financing options based on your individual scenarios, goals and needs.

Next, discover our preferred lenders, what you need to know about securing a mortgage, and the top reasons to buy a new home in the Carolinas with Empire.

You may have heard the term “rate buydown” on your new home search in Austin, Houston or San Antonio, but what does it mean? We asked Benito Solis of Interlinc Mortgage to give us the details on how this financing arrangement works to help you understand its benefits.

What is a Rate Buydown?

A buydown is a way for a borrower to obtain a lower interest rate by purchasing discount points against their mortgage loan or paying interest upfront at closing. It allows them to make lower mortgage payments during higher interest rate conditions either for the first few years of their loan or for its full life, depending on which structure is chosen.

How it Works

Depending on your overall goals, this is a great way to reduce your monthly mortgage payment without taking on additional risk with other loan options such as Adjustable-Rate Mortgages (ARMS) since buydowns are fixed-rate programs. They can also be used on almost all loan types such as VA, Conventional and FHA, and the prepaid interest required upfront is usually paid for by the seller.

“One of my favorite features of buydowns is that any upfront interest you paid or anyone paid on your behalf is never lost,” says Solis. “If you choose a 3-2-1 buydown and rates fall in year two, the remaining upfront interest that isn’t used will be deducted from your loan balance.”

Types of Rate Buydowns

While there are a few rate buydown structures to choose from, the most common are 3-2-1, 2-1, and permanent rate buydowns. With a 3-2-1 program, monthly mortgage payments will be at their lowest in the first year and will increase slightly in the following two years. The full interest rate will come into effect in the fourth year of the loan.

A 2-1 buydown is very similar in that it has the same permanent payment structure as a 3-2-1 buydown, but the full interest rate comes into effect in year three. In most cases, a 2-1 buydown will cost fewer points than a 3-2-1 buydown, but the savings will also be less.

While a 3-2-1 and 2-1 buydown will temporarily reduce your mortgage payments, a permanent buydown will lower the interest rate for the entire life of your loan. Take a look at our examples below illustrating how these rate buydown structures work.

The Benefits

Buydowns reduce your interest rate, making your dream home that much more attainable. In today’s market, they allow you to take advantage of low home prices and low payments, saving you money and allowing you to qualify more easily for your mortgage.

If you choose a 3-2-1 or 2-1 buydown structure and rates drop, you can refinance at any time with no pre-payment penalty. Any remaining funds being held in your escrow account will not be lost and will be applied to your principal balance.

Is it Right For Me?

When it comes to finances, the best way to determine what’s right for you is to speak with a Mortgage Loan Officer. These industry experts can point you in the direction of the best financing options based on your individual scenarios, goals and needs.

Next, discover the benefits of working with one of our preferred lenders, the 5 financing myths you should know and what to know about the homebuying process in Texas.

Brought to you by Movement Mortgage.

Ready to purchase a home? Congratulations — it’s an exciting but daunting time, and you probably have a ton of questions. Down payments, qualifications, costs, and interest rates all sound scarier than they actually are when you don’t know who to ask for advice. We sat down with loan officer Michael Nasserfar from Movement Mortgage to dispel some of the most common misconceptions about financing to ensure that you have the utmost confidence on your new home journey.

Myth #1: You need to put down a minimum of 20% for financing.

In the past, putting 20% down was a requirement as banks tried to mitigate their exposure risk when lending to homebuyers, but not anymore. “Most buyers think they have to put 20% down for financing or to get ‘good’ financing, but this is nothing more than a common misconception,” says Nasserfar. “There are a variety of loan programs available with as little as 3% down for Conventional, 3.5% down for FHA, and even some zero-down programs such as VA Financing and USDA loans.”

Myth #2: You don’t qualify as a first-time homebuyer.

There are some financing programs that do require you to be a first-time homebuyer to use, but there are even more that do not make this a prerequisite. “The good news is that when it comes to financing a new home, there are no stipulations that state you must be a first-time homebuyer,” says Nasserfar. “Many of the first-time homebuyer financing programs reset a few years after you’ve purchased a home, at which point you can requalify.”

Myth #3: You don’t have the money for a down payment right now, so you have to wait to buy until you have 100% of the funds needed.

Did you know that you can save up for your down payment while your new home is being built? “Contrary to what some may think, 100% of your down payment funds are not needed until your home is completed and you’re ready to finish the loan process,” says Nasserfar. “If you need time to save up, take advantage of the construction timeline on your home to get there.”

Myth #4: New homes are more expensive than resale homes.

Now more than ever, the market is proving this statement false. “New-build homes can provide far more value when you consider all the special features and finishes you may not find in a resale,” says Nasserfar. Think green-built homes and energy-saving warranties or incentives. “With a resale, an individual would have to spend a lot more for a balanced offer compared to a new-construction home. When you’re comparing apples to apples, a new home is far less expensive than a resale property.”

Myth #5: Interest rates are way too high to buy and the payments are out of my budget.

Historically speaking, current market interest rates are low. Just ask anyone who purchased a home in the 1980’s when rates ranged from 10% to almost 19%. “With mortgage interest rates averaging around 8% historically, current rates are substantially lower in comparison,” says Nasserfar. “What’s more is there are many incentive programs to help you yield a lower rate than what the market is currently offering, helping you save money and drive your new mortgage payment as low as possible.”

One incentive program is a rate buydown which lowers your interest rate for the first year and then increases slightly per year until the final and fixed rate period takes place. This program allows you to take advantage of low home prices and low payments. “If and when the rates drop, you can refinance into a lower monthly payment for the remainder of the term when the opportunity is available,” says Nasserfar. “This specific rate buydown holds your funds in an escrow account so if and when you refinance, the balance of the escrow fund is applied to your principal balance.” This way, you won’t lose any of your incentives like a permanent rate buydown.

Whether you’re preparing to buy your first home, or your next one, it’s best to familiarize yourself with the lingo. Learn the most common terms you’ll likely hear to help you navigate the homebuying process with absolute ease.

• Adjustable Rate Mortgage (ARM): A mortgage with a variable interest rate that is usually initially lower than that of a mortgage with a fixed rate but is adjusted periodically according to the cost of funds to the lender.
• Appraisal: A professional opinion of the homes current market value.
• Amortization: The process of paying off a loan with regular installments of interest and principal over time, lowering the amount you owe with each payment over the full term of the loan.
• Annual Percentage Rate (APR): A broader measure of the cost of borrowing money than the interest rate. The APR reflects the interest rate plus additional fees and expenses associated with taking out your loan. APR allows homebuyers to compare different mortgages based on the annual cost for each loan.
• Buydown: When the seller, builder or buyer pays an amount upfront to lower monthly mortgage payments for a certain number of years or the whole term.

• Closing: The Closing, also called settlement, is the last step in buying and financing a home where the buyer signs the mortgage documents, and pays closing costs.
• Closing Costs: Fees and expenses incurred when finalizing a real estate transaction, beyond the down payment of the home. These costs may include loan origination fees, points, appraisal fee, credit report fee, mortgage tax, survey and other items.
• Closing Disclosure: A closing disclosure is the official form providing the final details about the mortgage loan you have selected. It includes the terms of the loan, projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs).
• Contingency: A condition that must be met for a contract or a commitment to remain binding.
• Conventional Mortgage: A conventional loan is any mortgage loan that is not insured or guaranteed by the government (such as under Federal Housing Administration, Department of Veterans Affairs, or Department of Agriculture loan programs).
• Credit Report: A credit report is a statement containing information about your credit activity and current credit situation. Lenders use your credit scores and information on your credit report to determine whether you qualify for a loan and what interest rate to offer you.

• Discount Point: Discount points lower your interest rate in exchange for paying an upfront fee.  This is also referred to “buying down the rate.” Each point you buy costs 1 percent of your total loan amount.
• Down Payment: The percentage of your homes purchase price paid upfront when you close on your home loan. This amount is not financed with a mortgage and will vary depending on the type of loan you choose and the lender’s requirements. Generally, the larger the down payment you make, the lower the interest rate you will receive and the more likely you are to be approved for a loan.
• Down Payment Assistance Program (DPA): Financial assistance provided by an organization such as a government or non-profit agency, to a homebuyer to assist with the down payment for a home purchase.
• Earnest Money: The deposit a buyer pays to show good faith on a signed contract agreement to buy a home. If the offer is accepted, the money will become part of the down payment.
• Escrow: An escrow account is set up by your mortgage lender to pay various property-related expenses, like property tax and homeowners’ insurance. A portion of your monthly mortgage payment goes into the account. If your mortgage does not have an escrow account, you pay your property-related expenses directly.
• Equity: Equity is the difference between what you owe on your mortgage and the fair market value of the home.

• Federal Housing Administration (FHA) Loan: FHA loans are from private lenders that are regulated and insured by the Federal Housing Administration (FHA). FHA loans differ from conventional loans because they allow for lower credit scores and down payments as low as 3.5 percent of the total loan amount. The maximum loan amounts vary by county.
• First Time Home Buyer (FTHB) Loan Programs: Mortgage loans with special qualifying terms for those who have never owned real estate or have not in the past few years. Although the programs and terms vary by state, they often offer down payment and closing cost assistance.
• Fixed-Rate Mortgage: A mortgage in which the interest rate is set when you take out the loan and it does not change during the term of the loan.
• Homeowner’s Insurance: Homeowner’s insurance pays for losses and damage to your property if something unexpected happens, like a fire, theft, liability for property damage and personal liability. When you have a mortgage, your lender wants to make sure your property is protected by insurance. That’s why lenders generally require proof that you have homeowner’s insurance. Homeowner’s insurance is not the same as mortgage insurance.
• Lock in: A homebuyer can lock in a specified interest rate and points provided the loan is closed within a set period of time. This can help protect you against the interest rate changing during the time between applying for a loan and closing on it.

• Mortgage Insurance: Mortgage insurance protects the lender if you fall behind on your payments. Mortgage insurance is typically required if your down payment is less than 20% of the property value.
• Pre-qualification: The process of determining how much money a prospective homebuyer will be eligible to borrow before a loan is applied for.
• PITI: The four basic elements of a monthly mortgage payment: principal, interest, taxes, and insurance.
• Title Insurance: Title insurance protects a real estate owner or lender against any loss or damage they might experience because of liens, encumbrances, or defects in the title to the property, or the incorrectness of the related search.
• Underwriting: The process of evaluating a loan application to determine the risk involved for the lender. Underwriting involves an analysis of the borrower’s creditworthiness and the quality of the property itself.
• USDA Loan: The Rural Housing Service, part of the U.S. Department of Agriculture (USDA) offers mortgage programs with no down payment and generally favorable interest rates to rural homebuyers who meet the USDA’s income eligibility requirements.
• VA Loans: A VA loan is a loan program offered by the Department of Veterans Affairs (VA) to help service members, veterans, and eligible surviving spouses buy homes. The VA does not make the loans but sets the rules for who may qualify and the mortgage terms. The VA guarantees a portion of the loan to reduce the risk of loss to the lender. The loans generally are only available for a primary residence.

Explore our selection of homeowner resources to help you along at all stages of your homebuying journey, and the many benefits of working with our preferred lenders in Houston, Austin and San Antonio.

Whether you’re purchasing your first home or your next home, we want to ensure your home buying experience is as seamless as possible. When it comes to securing a new home mortgage, Empire understands the importance of finding a knowledgeable lender you can trust — that’s why we’ve teamed up with some of the industry’s top mortgage professionals. Working with one of our preferred lenders might be a good solution if you have not yet secured financing.

Get in touch with our New Home Specialists today to start your home buying journey and to connect with one of our preferred lenders.  

Whether you’re purchasing your first home or your next home, we want to ensure your home buying experience is as seamless as possible. When it comes to securing a new home mortgage, Empire understands the importance of finding a knowledgeable lender you can trust — that’s why we’ve teamed up with some of the industry’s top mortgage professionals. Working with one of our preferred lenders might be a good solution if you have not yet secured financing.

Get in touch with our New Home Specialists today to start your home buying journey and to connect with one of our preferred lenders.