You’re A Seasonally Employed? Here’s A Guide To Get A Texas Mortgage

Getting A Texas Mortgage When You Have A Seasonal Income

If you are a professional who works part of the year or is seasonally employed, you might have a tough time qualifying for a mortgage. The job can be available depending on the season, such as snow removal, landscaping, or a side hassle. It is a type of employment known as sporadic.

While the nature of your profession might not disqualify you from getting a mortgage, it could make the process somewhat tricky.

The Required Documentation

You must prove to the mortgage lender you have a reliable income even though you have seasonal employment. For VA and FHA loans, you should provide the necessary paperwork that shows you worked for the same employer for at least two years or have been in the same profession for the same period. Moreover, your employer will provide the documents that prove you still be hired in the upcoming season.

However, if you have worked for less than two years, your incomes might not qualify you for the mortgage. Similarly, you might not be eligible even if you have been working for two years, and your employer cannot prove that you will be hired in the season that follows.

What Next If You Cannot Prove This?

If you cannot give evidence that shows you have a reliable income for a period not less than two years, you will not qualify for the mortgage. However, you can re-apply once these changes, and you have the necessary documentation to back it. But if your situation is wanting, you can consider other options even when you opt to wait and reapply.

Provide all your income sources. If you receive Social Security Benefits, have a second or third job, receive unemployment benefits, or some interest income, consider using them to bolster your chances of qualifying for the mortgage.

For instance, you can apply for the mortgage with a close friend, spouse, or family member. You may increase the chances of being eligible for the loan if you add another person, especially one with a good credit score. Keep in mind that lenders will consider both parties’ incomes and credit scores when qualifying the borrower. For better chances of qualifying, consider splitting the homeownership costs and seeking another person’s assistance through the process, which is some of the top benefits of co-owning a home with someone.

Proper documentation can make the difference between being eligible for a mortgage and buying that dream home. But before starting the application process, you should ensure that you sort the W2 forms and have proof of compensation, both covering the last two years. Furthermore, you need your employer to verify you will be hired the next season.

Choose The Texas Mortgage Pros

If you are confident you qualify, begin the process as soon as possible. Texas Mortgage Pros are here to help make things simple for you to have a fast approval. If you are uncertain of your eligibility, get in touch with us today to discover other viable options that you can consider.

A Helpful Guide For A Texas FHA Loan Qualifications

8 Things You Need To Know To Qualify For A FHA Loan In Texas

Part 2

6. Choosing The Right Type Of FHA Loan

Different types of FHA loans are offered by lenders and the most common type remains 30 years fixed interest loan. There is also the option of an FHA loan with a fixed interest rate for a period of 10 to 25 years and you also have the option of an adjustable-rate FHA loan. With an adjustable-rate FHA loan, you will benefit from fluctuating interest rates at particular time periods.

For instance, a 3/1 adjustable rate FHA loan allows a fixed interest rate for the first 3 years but the interest rate is reset every year after that. You can get an adjustable loan with different periods of a fixed-rate term such as 3/1, 5/1, 7/1, or 10/1 with the 30-year loan. However, the FHA loans with fixed interest rates are more popular as adjustable-rate loans are deemed riskier by buyers.

7. Understanding FHA Loan Costs

An FHA loan also comes with the mandatory cost of private mortgage insurance. It is the insurance that protects the lender in case the borrower defaults and as a borrower, you need to pay an upfront fee as well as a monthly fee. It is essential for everyone who opts for less than 20% down payment.

8. Starting The Application Process

If you have checked everything and you think you will qualify for an FHA loan, and it is now time for you to apply, you should first try to get pre-approved with your chosen lender. It could be a credit union or local bank or an online mortgage lender or an independent mortgage broker.

Start the process with multiple lenders and ask for quotes for payments, fees as well as rates. Keep in mind that there is huge competition in the mortgage lending business even with an FHA loan, and even a slight difference in the closing costs or interest rates can help you save thousands of dollars.

The Texas Mortgage Pros

Here at The Texas Mortgage Pros, our team has mortgage professionals all over Texas. We are dedicated to helping our clients get the highest quality service for all their mortgage needs. We are committed to get our clients the lowest rates and to help them choose the best from multiple loan programs in The Woodlands, Tomball, San Antonio, Spring, Houston, Austin, and Dallas, Texas.

Our team of mortgage professionals has multiple years of experience and we will work with you to make sure that you get a customized home loan that is exactly right as for your situation and meets your expectations. Whether you are buying your first home or buying your dream home or refinancing a loan or consolidating debt, our team of highly experienced loan officers will make sure you are able to find the right loan at the lowest possible rate.

We strive to create a lasting relationship with our clients to allow us to serve our clients for many years in the future. We are different from other mortgage companies that operate nationwide. We promise that all your information will always be safe and private. We have a well-earned reputation in the lending community for trustworthiness and reliability.

Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the first article in this series.

A Helpful Guide For A Texas FHA Loan Qualifications

8 Things You Need To Know To Qualify For A FHA Loan In Texas

Part 1

With the help of FHA loans, you can now fulfill your dream of owning a house with a low payment or limited credit. Here is what you need to know about qualifying for an FHA loan and things you can expect.

The FHA loan program allows you to buy a home with just 3.5% of the property value as a down payment even when you have a credit score that is lower than as required by traditional mortgage providers.

It is also important to understand that the FHA loan program is not limited to low-income applicants or first-time homebuyers. Here is what you need to know about FHA loan qualifications.

1. Verifiable Income

One of the biggest factors that affect your qualification for an FHA loan is your ability to repay the loan. Here is a rough criterion you need to meet in terms of income:

The mortgage payment should be below 35% of your income before taxes and all your monthly debt payments including your mortgage, credit cards, car loan, or any other loan should be within 48% of your income.

If all these things sound confusing, feel free to use our home affordability calculator to figure out the maximum amount you can afford to spend on a home. If your dream property costs more than what you can afford now, you should try to pay off as much debt as possible before applying for an FHA loan.

2. Down Payment – 3.5%

The minimum down payment you need to make for an FHA loan stands at 3.5%. However, it is close to 6% of the purchase price of the home in reality as you also need to pay the closing costs. This closing cost also includes the upfront mortgage insurance premium which is equivalent to 1.75% of your home’s value. You can bring this insurance premium down to 1.25% when you undergo an FHA approved credit counseling program before you close the deal.

3. Credit History

Established credit history is a must and you need to have at least 2 lines of credit such as a credit card and a student loan in order to qualify for an FHA loan.

4. FICO Score Range 580 to 640

The minimum FICO score you need for qualifying for an FHA loan program is 580. However, you should know that FHA is not the lender but it acts as an insurer and the minimum credit score requirements are set by the lender. This minimum score is often around 640 when it comes to FHA loans. Keep in mind that conventional mortgages usually require a FICO score of around 700.

You can check your credit score for free if you don’t already know it. If your score is above 640, is completely safe to apply for an FHA loan. If your credit score is below this limit, get in touch with the chosen mortgage lender and inquire about their minimum scores to process FHA loan applications. Keep in mind that you should do all this before making an official application.

5. Remain Within FHA Loan Limits

You cannot borrow as much as you want with an FHA loan as there are federally set limits that depend on your state and county. However, in most cases, the limits aren’t low enough to prevent you from buying a home that is expensive.

Contact our expert mortgage professionals, call us today, or use our interactive tools that are on offer on our site. We cant wait to meet you. Click here to go to the next article in this series.

First-Time Homebuyer In Houston? These Loans Are Available For You

10 Houston First-Time Homebuyer Loans & Programs

As a first-time homebuyer, you must be navigating one of the toughest real estate markets in the economy. It’s very hard to find the right house to buy since most people are buying any available houses to flip for profit. On the other end, builders are now focused on high-end homes because of the escalating costs so they can boost their own profits.

The Benefits Of Loan Programs For First-Time Homebuyers

Are you thinking about buying your first home? Well, there are first-time homebuyer programs, loans, and grants available to you. These are financial assistance programs given to qualified buyers, especially if they meet the set income restrictions and have high credit scores. Here are some of the ways you can benefit from these programs.

1. Grants

You might be eligible for a grant to cover costs related to buying a home such as down payment or closing costs.

2. Assistance With Closing Fees

You can get a loan that puts a cap on the total amount you can be charged for closing fees.

3. Deferred Payments

With these loans, you will not be charged interest or be forced to repay the loan until you sell the home or pay off the mortgage.

4. Savings On Interest

Some loan lenders will pay the interest or subsidize it. You can also get help with qualifying for a loan with reduced interest rates.

5. Loan Forgiveness

If you stay in the home for a predetermined period, a portion of your loan will be forgiven.

6. Assistance With Down Payment

With this program, you will put down a small down payment and the lender covers the rest. Also, in some cases, you will not pay the down payment at all.

10 First-Time Homebuyer Loans & Programs

1. FHA Loan Program

It is a loan for buying a home guaranteed by the Federal Housing Administration. It is the best loan program if you have low credit scores and a little amount of money as a down payment.

2. USDA Loan Program

It is a loan program guaranteed 100% by the U.S Dept of Agriculture. It is applicable to low-income loan borrowers in rural areas.

3. VA Loan Program

It is a loan program guaranteed by the U.S Dept of Veteran Affairs. Here, any military personnel will not pay any down payment. It’s also applicable to veterans and their families.

4. Good Neighbor Next Door Buyer Aid Program

It is a program offered by HUD (the U.S Dept of Housing and Urban Development). It is a housing program for people in law enforcement, emergency medical technicians, firefighters, and teachers.

5. Freddie Mac Or Fannie Mae Loans

They are conventional loans that are backed by Freddie Mac or Fannie Mae. They require a 3% down payment. It’s the best loan for people with strong credit.

6. HomePath Ready Buyer Program

Here, you will get 3% assistance with closing costs if you are a first-time homebuyer. To qualify you must complete an educational course and also buy a foreclosed Freddie Mac or Fannie Mae property.

7. Energy Efficient Mortgage Program

It is backed by VA or FHA loan programs. Here, buyers can combine the total cost of energy-efficient upgrades and apply for loan upfront.

8. FHA Section 203 (k) Loans

Here, you can borrow the money needed to pay for any home improvement projects. You will roll the costs into an FHA loan with the primary mortgage.

9. Local First-Time Home Buyer Programs & Grants

Various cities and states offer first-time buyer grants and programs for a down payment on a new home or assistance with closing costs.

10. Native American Direct Loan

It is a program backed by the VA that offers loans to Native American Veterans. They can buy, build, or renovate homes on their federal trust land.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

First Time Home Buyer In Texas? FHA Loan Can Clear The Path For You

Why An FHA Loan Is Ideal For First Time Home Buyer In Texas

It is every American’s dream to own a home. However, homeownership is becoming increasingly expensive with each day. Real estate prices have spiked in many parts of the US, and aspiring homeowners are finding it much harder to put down a down payment and afford the monthly payments. This is not to mention the upkeep and maintenance costs. For some people, renting appears to be the more favorable option.

However, while renting isn’t necessarily a bad thing, you will be pleased to learn that, in a bid to make housing more affordable, US government offers some home loan programs. This is particularly beneficial for those with poor credit. One such loan program is the FHA loan offered by the Federal Housing Authority, and it can prove to be more beneficial than you think.

The Advantages Of FHA Home Loans

There are three key reasons why you should consider the Federal Housing Administration loan program- easy credit requirements, reduced down payments, and low closing costs. While in the case of a conventional home loan you may be required to put a downpayment of 5% or more, with an FHA loan, you are allowed to put down as little as 3.5% or $3,500 per every $100,000 you borrow.

Besides lowered down payment requirements, you don’t need to have a perfect credit score to qualify. People with a credit score as low as 580 can be approved for an FHA loan. It is worth noting that you can also be approved even with a lower credit score but you will have to put a downpayment of 10% or more.

The Federal Housing Administration has made it even easier to qualify as you can be approved even if you have other types of debts. As opposed to conventional mortgage lenders who require that you have a debt-to-income ratio_(your total amount of debt compared to your total income as a percentage) of below 36% including housing, you can be approved for an FHA loan with a debt-to-income ratio of up to 43%.

Should You Get An FHA Home Loan?

While the benefits and downsides discussed above will help you to determine whether you are a good candidate for an FHA loan, you should consider speaking with several lenders before making a final decision. By consulting a mortgage expert, you will be able to find out which loan will be ideal for your financial situation and needs.

Ultimately, FHA loans are suitable for first-time homebuyers who are still struggling to build their credit and save up enough money to invest in a home. With the easy credit requirements, reduced down payment requirement, and higher debt-to-income ratio, the FHA has made it easier for almost everyone to afford a home. However, this is only so if you are looking to buy a home within FHA loan limits.

Even though an FHA loan is favorable to buyers with less-than-perfect credit, the conventional mortgage offers a better deal to those with a good credit score and have enough money for a sizeable down payment. Additionally, if you’ve saved up 20% of your home’s purchase price, a traditional loan will definitely be your best option as you will avoid mortgage insurance costs altogether.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

The Suitable Home Loans For Texas First Time Homebuyers

Financing Basics For First Time Homebuyers In Texas Part 3

 

Fixed Vs Floating Rate Mortgages

Another consideration to make is whether to go for a fixed-rate or floating-rate (variable rate) mortgage. For fixed-rate mortgages, rates don’t change throughout the loan period. The benefit of getting this loan is that you know the monthly costs of the loan for the whole period beforehand. Whenever the prevailing interest rates are low, you’re guaranteed a good rate for a considerable duration.

first time home buyer banner for planoFloating-rate mortgages, like interest-only mortgages or adjustable-rate mortgages (ARM), are meant to assist first-time homebuyers or people who speculate an income rise along with the loan duration. Floating-rate loans normally enable one to get lower introductory rates in the initial years of the loan, enabling you to qualify for more money compared to opting for a more costly fixed-rate loan. This option can, undoubtedly, pose a risk if your income doesn’t grow at the same rate as the increase in interest rate. Another disadvantage is that the market interest rates may fluctuate: Whenever they rise drastically, the terms of your loan will shoot up with them.

How ARMs Work

The commonest types of ARMs are usually of one, five, or seven-year periods. The opening interest rate is usually fixed for a particular period of time and is then reset with time, often every month. Whenever an ARM changes, it adapts to the prevailing market rate, which is often done by adding a predetermined percentage (spread) to the usual U.S Treasury rate. Though an upper limit is imposed on the increase, and ARM adjustment may be more costly than the usual fixed-rate mortgage loan to compensate the financier for giving a lower rate in the introductory period.

Interest-only loans are a kind of ARM in which one only pays the mortgage interest and not principal in the introductory period until the loan returns to a fixed and principal-paying loan. These types of loans can be beneficial for first-time borrowers since paying interest only reduces the monthly cost of borrowing significantly and will help you qualify for a bigger loan. However, since you don’t pay the principal during the initial period, the amount due on the loan remains unchanged until you commence repaying the principal.

The Texas Mortgage Pros

The Texas Mortgage Pros team consists of mortgage professionals all over Texas. We are committed to providing our clients with the highest quality service for your mortgage needs. Combined with the lowest rate and multiple loan programs available in your area – Spring, San Antonio, Tomball, The Woodlands, Dallas, Austin, and Houston, Texas. Our outstanding mortgage professionals with years of experience will work with you one-on-one to ensure that you get the home loan that is tailored specifically to meet your situation and expectation. Whether you are purchasing your dream home, first home, refinancing an existing loan, or consolidating debt, our highly experienced team of loan officers can help you find the right loan program at the lowest rate possible.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today! Click here to go to the first article in this series.

The Suitable Home Loans For Texas First Time Homebuyers

Financing Basics For First Time Homebuyers In Texas Part 2

 

Equity & Income Requirements

The financier determines the pricing of home mortgage loans in two distinct ways, with both relying on the creditworthiness of the borrower. On top of checking your FICO score from the major credit bureaus, financiers will compute the loan-to-value ratio (LTV) as well as the debt-service coverage ratio (DSCR) to determine the amount they will offer you, and the interest rate.

LTV refers to the actual or implied amount of equity available in the security being borrowed against. For home purchases, the LTV is arrived at by dividing the amount of loan by the home’s purchase price. Financiers assume that the more the amount you are paying in the form of the down payment, the less the possibility of defaulting on the loan. The higher the LTV, the bigger the risk of default, and the lenders will, therefore, charge more.

The debt service coverage ratio signifies your ability to service the mortgage. Financiers divide your net monthly income by the costs of the mortgage to determine the probability of defaulting on the mortgage. Most financiers require a DSCR greater than one. The higher the ratio, the higher the probability that you will cover the borrowing costs, which means less risk to the lender. The higher the DSCR, the higher the probability of the lender negotiating the loan rate since, even at a lower rate, the lender gets a better risk-adjusted return.

As such, you should submit any kind of qualifying income when negotiating with a mortgage financier. Often, an additional part-time job or other income-generating ventures can be the difference between qualifying and failing to qualify for a loan or achieving the best possible rate.

Private Mortgage Insurance

LTV also determines whether you will need to buy private mortgage insurance (PMI). The PMI protects the financier from default by transferring some of the loan risks to a mortgage insurer. Most financiers require PMI for loans bearing an LTV higher than 80%, implying any loan where equity ownership in the home is less than 20%. The amount to be insured, as well as the mortgage plan, will determine the mortgage insurance cost and collection plan.

The majority of mortgage insurance premiums are collected monthly alongside tax and property insurance securities. Once LTV equals or is less than 78%, PMI should be eliminated automatically. You can cancel PMI as soon as the home appreciates sufficiently in value to grant you 20% equity, and a set duration has elapsed, say two years. Some financiers, such as the FHA, will evaluate the mortgage insurance as a total sum and capitalize it into the amount of loan.

There are tactics to evade PMI payment. One should not borrow more than 80% of the property value when buying a home; another way is using home equity financing or another mortgage to make up more than 20%. The commonest program is known as an 80-10-10 mortgage. The 80 represents the LTV of the first mortgage, the first 10 represents the LTV of the second mortgage, while the third 10 stands for your equity in the homeownership.

Though the second mortgage’s rate will be higher than that of the first, on a combined basis, it should not exceed the rate of a 90% LTV loan. An 80-10-10 mortgage may be less costly than paying for PMI and also enables you to hasten the payment of the second mortgage and do away with that part of the debt fast for you to pay off your home early.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today! Click here to go to the next article in this series.

The Suitable Home Loans For Texas First Time Homebuyers

Financing Basics For First Time Homebuyers In Texas Part 1

 

The numerous financing options at the disposal of First Time Homebuyers often seems overwhelming. However, researching on the various property financing basics can save you a great deal of time and money. Understanding the market of the property location and whether it provides incentives to financiers could mean a whole lot of advantages for you. Consider your finances to be sure that you are getting the most suitable mortgage.

Standard loans are uninsured mortgages or those that are not guaranteed by the federal government. They are basically fixed-rate mortgages. Their sterner requirements of making a larger down payment, having a higher credit score, lower-income to debt ratios, and often the need for private mortgage insurance render them the toughest to qualify for. However, standard mortgages are often less costly expensive than guaranteed mortgages.

Corpus Christi texas classic home bought with assistance paymentsStandard loans are classified as either confirming or non-conforming loans. The conforming loans are those that adhere to rules such as loan limits, which are set by the government-sponsored enterprises Freddie Mac or Fannie Mae since they or other financiers often buy and package such loans and sell them in the form of securities in the secondary market. The loan limit for a conventional mortgage in 2020 is $510,400 overall. Although it can go up in the case of well-known high-cost areas.

A loan in amounts higher than this is known as a jumbo loan and usually comes with a higher interest rate. The high rates are attributed to the high risk associated with these loans, since they involve huge sums of money, and this makes them less likable in the secondary market. Non-conforming loans are usually issued by portfolio lenders who determine their lending terms.

FHA Loans

The Federal Housing Administration (FHA), a portion of the U.S Department of Housing and Urban Development, provides several mortgage programs. An FHA loan requires a lower down payment and is easier to qualify for, unlike a conventional loan. FHA loans are great for First Time Homebuyers since they come with lower upfront costs and less severe credit requirements. As such, First Time Homebuyers can make down payments as low as 3.5%. FHA loans cannot go be. FHA loans cannot go beyond the statutory limits stated above.

Most importantly, all FHA borrowers ought to pay a mortgage insurance premium (MIP), which is included in their mortgage payments.

VA Loans

The U.S Department of Veterans Affairs (VA) assures VA loans. The body doesn’t offer loans itself, but rather guarantees mortgages offered by qualified financiers. Such guarantees enable veterans and service people to acquire home loans with friendly terms, normally without a down payment. Mostly, it is easier to qualify for VA loans than conventional loans. Financiers usually limit the maximum VA loan to the conventional mortgage loan limits. Before signing up for a loan, seek eligibility from the VA. If you are granted, the VA issues an eligibility certificate that you can use when applying for the loan.

On top of these types of federal loans and programs, state and local governments and agencies support assistance programs to grow investment or homeownership in specific locations.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today! Click here to go to the next article in this series.

How Can I Get Approved For A Texas Mortgage With Bad Credit?

Tips To Get Approved For A Home Loan In Texas 

Financing is of high concern for people with bad credit. They are already extremely stressed by the mounting debt they have to pay off. With that, the late fees and interest are zooming out of control if they’re not making their minimum payments. If you’re dealing with a lot of debt and can’t get a loan you shouldn’t panic, you should look at what is the easiest mortgage to qualify for. It’s still possible to get a loan; however, it will be harder for you. The best thing you can do is to continue to work on your credit score. You may need housing now. It’s harder to rent an apartment if you have a poor credit score than it is to get a housing loan. You may want to consider the following options:

Remember That Most People Do Not Have Excellent Credit

You aren’t perfect? Neither is anyone else. Only 22% of Americans had an excellent credit score in 2018. Most fall within the low end of the 700. You’re probably suffering from a credit score that is at least 690 or below if you are reading this article. You have a lot more options if your credit score is in the 600 verses below 600. Those with a score of 620 can even get a conventional home loan. What if my score is below 600? There’s still hope for you.

A Co-Signer

Co-signers are commonly used by young people as they do not have a long history of credit or an adequate income in most cases. How do I get a mortgage on my house?  While it isn’t always possible, an adult may be able to get someone to co-sign for them. A stay at home mother, who has recently gotten divorced, may be able to convince her ex-husband to Co-Sign for a new place. The more willing he is to support his Ex-spouse, the better he will look in court during proceedings. 

The Co-signer is promising that he or she will be responsible for the debt if you do not pay your mortgage. He or she will also be subject to a credit score reduction if he or she does not take on the debt. Parents often do not trust their kids enough to do this. It’s less likely it will happen for an adult that’s over 26. Let’s look at other options:

Make A Larger Down Payment

Many lenders will offer you a loan with a larger down payment if you have a poor credit score. There is a limit to this. This is more likely to happen if you have a credit score that at least falls above 590. Those with extremely poor credit scores may not be given this option and will have more strict conventional loan requirements.

State & Federal Programs 

Some programs may be available for you. As an example, veterans can get help through VA financing. VA financing does not have stringent rules about credit scores and requires no down payment. Those who are willing to live in rural areas can get a USDA loan. These loans are insured by the government. You have less to lose if you can’t pay. Also, you should avoid urban housing if you are struggling financially. Urban housing is way more expensive anyway. 

HUD housing does not require a credit score at all. Families with children, the elderly, and the disabled will be the priority for HUD housing. You cannot get HUD housing with a felony, especially if it is violent or sexual. HUD housing does have a max income cap. It may vary depending on dependents. 

It’s Possible To Get Housing

The government does not want people to go without housing. That’s why there are many home loans in Texas. You may be living with a false perception if you believe that you do not qualify. This is especially true for those with a credit score in the 600s.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Feel free to contact us or call us today!

Mortgages In Texas: Which Ones Are Easy To Qualify?

The Easiest Texas Mortgage To Qualify For

Have you been looking for the best mortgage companies in Texas, but you don’t know which ones are easy to qualify for? Don’t fret. This article will provide you with some of the options that will increase your chances of getting a mortgage. One thing you have to understand is that getting approved for a mortgage is not easy. The procedures are complicated and extensive. The lenders do a thorough evaluation, and thus, any wrong move or failure on your side automatically disqualifies you. 

For you to qualify for a mortgage, you will have to go through a lot of investigations. The lenders have to ensure that the person they give the loan to will be able to repay the loan as agreed. Failure to repay the loan puts the lenders at risk because they are the ones left with the bad debts. Besides, mortgage loans are expensive. 

How do I get a mortgage on my house? The bank is willing to give you several dollars for you to build your dream home. You don’t expect them to be lenient when choosing who qualifies for the mortgage loans and who doesn’t. Since the mortgage process is tough, it is useful to known which mortgage loan is easy to qualify for, to avoid all the hustle. Read on to get more information.

Government-Backed Mortgages

Some of the most accessible loans to qualify for are the government-backed mortgages. They are usually issued by private lenders, but they are guaranteed or insured by the government. By these loans being guaranteed by the government, it means that in case you fail to repay the loan, the government takes responsibility. 

The reason government agencies ensure some mortgages is that they want to help potential homeowners get approved for the mortgages. This makes it easier for the lender to approve the mortgage because they are sure that even if you fail to repay the loan, they won’t have to incur the losses. An example of government mortgages that are considered easy to qualify is the FHA loans.

FHA Loans

If you ask around for the mortgage that is easy to qualify, most people will recommend FHA loans. The federal department of Housing and Urban Development usually manages a mortgage insurance program that is operated by the Federal Housing Administration. 

These loans are easy to qualify for because first, they require a down payment of as low as 3.5%. This is lower than the conventional non-federal backed mortgages, which usually ask for a down payment of at least 5%. Secondly, these loans have a reasonable average credit score allowing most homeowners in need of the mortgage to qualify. 

How can I get approved for a mortgage with bad credit? In most cases, these loans don’t even require a minimum credit score amount, meaning that it is up to the individual lenders to determine the agreeable credit score before approving the mortgage loans. With these loans, you don’t have to worry much if you don’t have exceptionally high credit scores, because your score may qualify you when it comes to Federal Housing Administration loans.

FHA Insurance

Note that because the FHA insures the borrowers, the interest rate on FHA is considered more competitive as compared to the prime interest rate conventional mortgages. Note that one of the downsides of the FHA loans is that the FHA mortgage insurance can be more costly when compared to a conventional mortgage. This mortgage insurance is, however, important because it protects the lender by ensuring they get full recovery of their funds in case the borrower defaults. This is a bit different from the veteran affairs guarantees loan, which doesn’t usually require one to pay for mortgage insurance.

It is okay to look for easy mortgage options that you can qualify for. This helps because there is a lot of competition by homebuyers to get a mortgage. Instead of straining, why not look for a cheaper option and prepare the conventional loan requirements.

Before making a decision, let one of the experts at The Texas Mortgage Pros help you find out exactly what loan is best for you.  Contact us today Or Call Us @ (866) 772-3802