When people move to the Houston area from other states they are often surprised by our high taxes. Texas is one of five states without an individual or corporate income tax. Most states derive about 40% of their revenue from income taxes, a third from sales tax and the rest from taxes on items such as business licenses and gasoline. Because of this Texas has a fairly high sales tax and significantly higher property taxes.

In Northwest Harris and Southeast Montgomery Counties there are basically three different property taxing authorities. There is a county tax; which covers such things as county, hospital, emergency services, port authority, flood control, community college etc. The second tax is a school tax. The amount of this tax will depend on which school district you live in. The amount of the school district taxes vary by district but they are very similiar; they differ by pennies. It doesn’t matter where you live you are going to have these two taxing authorities.

The third taxing authority is the MUD or Municipal Utility District. Basically this is your water. This is the taxing authority that is going to vary subdivision by subdivision. There are a few older subdivisions in the area that have paid their bonds and don’t have this tax. The rate will vary from .25 to over $2.00 per 100 value of your house. If you live in a country subdivision and are on a septic you will not have this tax.  Typically the country subdivisons are on septic and have community water.

The good news is that you get a LOT of home for your money in Texas; even with the high taxes.  We have lived in two other states and for the same money a month we bought a newer home with more square footage. 

To get information for Harris County taxes you can go to the Harris County Appraisal District HCAD. For Montgomery County taxes you can get information at the Montgomery County Appraisal Tax Office.

Even with the higher property tax Texas ranks 14th in the lowest overall taxes paid among all 50 states.  What a great place to live!

For all your Northwest Houston Real Estate  needs, contact me today!
Marchel Peterson
Results Realty
Cell: 832-721-8332

One of the most common reasons for a real estate transaction to break down before closing is due to the loan not being approved.  The buyer thinks that they are approved but the problem is the lender often issues pre-qualification and pre-approval letters based on limited information.  The lender pre-qualifies them on nothing more than what the client tells them their income is.  In addition they sometimes don’t run a credit report before issuing a pre-qualification letter.  This is changing some with the fallout of the subprime industry this last spring.  This makes it even more important that a lender get you totally pre-approved. 

If you think you are pre-approved but have not provided the lender with income and asset documentation you are not approved.  A true approval, unless for a specified no document program, will require income and asset documentation and credit reports are required on all loan types.Being pre-approved gives you an edge when you start looking for you home.  If you get in to the situation where there is more than one offer on a home it is often the person who has been pre-approved who will get the home.  I have even had the situation where the other offer was a little more but my seller preferred the person who had a true pre-approval.

What is a Pre-Qualification?

A prequalification is simply a meeting between a loan officer and a customer to determine what the mortgage needs of the customer are.  Income and assets are not verified.  The credit report may or may not be pulled.  The information is not submitted to an underwriter.  The lender does not receive enough information to make a credit decision.

What is a Pre-Approval?

Pre-approval includes a complete loan application.  A credit report is pulled and asset and income are verified.  The information is submitted to underwriters for “credit only” decision.  Once you have been pre-approved your credit package can be used with any property.  Final loan approval will be subject to the underwriter approving the property only.  A pre-approval is normally good for 90 days.  The borrower receives a written pre-approval letter.

So you have your loan in place, the title commitment is in and you have completed any inspections etc. you wish to have on the property; now it is time to go to your real estate closing.  So what do you need to bring to the closing table?

The biggest item you will need to bring is of course money.  I have had a few clients who did not have to bring funds to the closing table but those have been few and far between; even if they had a 100% loan.  Actually the only two times that I remember that happening it was a VA loan.  The money to pay all your fees and closing cost will need to be in the form of “guaranteed funds” such as a Cashier’s Check.  Your agent or escrow officer will notify you of the exact amount.   You will receive a closing document required by HUD that outlines the settlement cost. The Title Company prepares this document.   The HUD statement is a little difficult to read as you read it backwards.  You start with page two and then go back to page 1.  Page 1 is the page that shows the funds you need to bring for your real estate closing.  For additional information on HUD statements go here. 

 In a perfect real estate world you would receive the HUD statement the day before closing so you would have time to go over it before closing.  Unfortunately real estate is not perfect; I can’t tell you how many times we get the HUD from the Title Company at the closing table.  I honestly don’t know why it takes so long but it is a very complex process.  Should that happen you can bring a check using the figures your lender have come up with from your good faith statement.  Should you not bring enough money you can write a personal check to the title company for up to $1500.  On the flip side if you bring too much money the Title Company will cut you a check for the overage.

The other item you will need to bring is a picture ID such as your driver’s license.  A number of years ago I had a client who was moving to another state.  He came back to Texas for the closing and to get his furniture.  A few days before closing I found out that he had turned in his driver’s license to the other state and only had a piece of paper for a drivers license.  He did not have another picture ID.  Back then I talked the title company in to letting us get a membership at Sam’s Club and using it as a picture ID.  As I told you this was quite a few years ago I’m not sure if that would fly today.  Long story short I highly recommend not turning in your driver’s license if you are planning on buying a house unless you have another type of picture ID like a passport.

For all your Northwest Houston Real Estate needs, contact me today!
Marchel Peterson
Results Realty
Cell: 832-721-8332

I have lived in states that have closed homes at attorneys offices and in states that close homes at title companies.  In Texas we close at Title companies and if you are getting a loan you will probably be required by your lender to have a title policy.  If you are paying cash you can choose whether to get a policy or not.  In my opinion you are taking a big risk that could come back to bite you later on by not acquiring a title policy but that will be your choice.  I have heard nightmare stories about people who have not bought policies and something going way back has come back to bite them.

Title insurance provides protection against title defects that were unknown to you at the time you purchased the policy.  Before writing a policy, a title company will check for defects in your title by examining public records, including deed, mortgages, wills, divorces, court judgments, tax records, liens, and encumbrances.  The company will then defend in court any claims to the property that are covered by your policy, subject to certain limitations.  If the company loses, it will pay you for covered losses up the amount of your policy.

In Texas, the two most common types of title policies are “mortgagee policies,” which protect lenders, and “owner policies,” which protect buyers.

Most lending institutions won’t loan you money to buy a house or other property unless you purchase a mortgagee policy.  This policy will repay the balance of the mortgage if a claim against your property voids your title.  Mortgagee policies remain in effect until the loan is repaid.  Most lenders will require you to buy a new mortgagee title policy if you refinance your home. 

Owner policies insure property owners against the specific kinds of claims listed in the policy.  Any owner policy remains in effect as long as you or your heirs own the property or are liable for any title warranties made when you sell the property.  You should keep your owner policy, even if you transfer your title or sell the property.

In Texas our title policy forms are standardized.  This mean the policy language is the same, regardless of the company. Here is a blank title policy from Alamo title so you can see the standardized language.  Pay special attention to “Schedule B” of the policy which explains any limitations, exclusions, exceptions and special conditions.  You may want to discuss these exceptions with an attorney before you close on a real estate deal.

The premium for a title policy is paid only once, at the closing of the sale.  The buyer and seller may negotiate who pays the premium.  Generally in Texas the title policy is paid by the seller for the new buyer but everything is negotiable so this is not always the case.  Lots of times when you are buying a new home the builder will not pay for the policy. 

Title insurance premium rates are set by the Texas Department of Insurance and are based on the property’s sale value using a sliding scale.  You can check the Texas Title Insurance  rates out here. 

If you would like more information about title policies.  I found an informative article about Texas Title Basics by Roberts & Roberts Attorneys at Law.  Texas Title policies are a good thing as they protect what is probably one of your biggest investments your home.

For all your Spring TX Real Estate needs, contact me today!
Marchel Peterson
Results Realty
Cell: 832-721-8332