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

How To Apply & What Are The Texas Conventional Loan Requirements

Tips For Applying For A Conventional Loan In Texas

Conventional loans are the most commonly got loans in America. Perhaps, that is why they have obtained the title of being conventional. You should consider several factors before deciding to apply for a conventional loan. First of all, it is extremely important to make sure you meet the requirements to apply for one. Not everyone meets the requirements needed to obtain a conventional loan. They aren’t that stringent; however, they do require an adequate credit score. A poor credit score will be the most likely reason why you are turned down. Let’s look at all the conventional loan requirements in Texas:

Conformity To The Federal Housing Financing Agency 

Conventional loans are given by a bank. They are not backed by the government in any situation. With that said, they do have to follow the laws set by the Federal Housing Financing Agency. Most of these laws pertain to loan limits and credit scores. Here are some of the requirements that are largely set due to the Federal Housing Financing Agency:

Adequate Credit Score

You will need to have a credit score that does not fall below 620 in almost all situations. Some banks require you to have a credit score of at least 640. Any credit score that is below 600 will most likely disqualify you from taking out the loan. So how can I get approved for a mortgage with bad credit? Do not become too discouraged if you have an extremely low credit score. There are many ways to fix it. Paying off credit card debt is the number one way to do it. It is important to try to at least make the minimum every month. Do not expect yourself to pay it all down in a few months. 

Small Amount For A Deposit

You do not need to put down a large deposit if you are getting a conventional loan in most cases. This is designed to help homeowners become housed if they do not have a lot of liquid cash available. Some loan companies will have a higher minimum down payment. This rule is not standard. If you can pay at least 20% of the down payment. This will make you exempt from having to get private mortgage insurance in most situations. 

The Limit Amount 

You cannot buy a $10 mansion with a conventional loan. With that said, you can buy a pretty nice home if you are a decent qualifier. In most areas of the country, the loan limit is $510,400. That is enough for a small mansion in Texas. Those who live in more expensive areas can expect to see a loan limit of $765,600. A house can be bought in Brooklyn for $500,000. How do I get a mortgage on my house? 

There is such a thing as a nonconforming conventional loan. Lenders have more freedom to decide the amount of the loan. At the highest, you will be able to get a loan of $2 million. The credit score you need to apply for this type of loan is much higher, so is the down payment. 

Is A Conventional Loan A Good Idea?

A conventional loan is a great option for those who are at least middle class. Working-class and under individuals should consider loans that are backed by the government or have subsidized. You should be cautious if you’re worried that your financial situation may change. Remember, you do not have to have an outstandingly high credit score to get a conventional loan. With that said, you should not even try if you have a credit score below 600. 

What is the easiest mortgage to qualify for? One of them is a Conventional loan can be a great way to get housing. They are the most popular choice among Americans. Those who are in better financial straits should even consider getting a non-conventional or jumbo loan to purchase a home. Getting a conventional loan will make it possible for you to get the home you want.

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

Can You Qualify For A Texas FHA Loan?

Thoughtful Ideas On Knowing If You Are Qualified For FHA Loan In Texas

Buying a home can be difficult in this economy. The reality of the situation consists of home prices that keep going up and up. Those who are stuck in apartments, or their parent’s house, often feel discouraged by the high price of homes. If you’re a millennial reading this, yes, your parents had it easier. The price of a typical home in a cheap, suburban area used to be $47,000 in 1980. Now, the same home will cost around $110,000. Because of this, it’s time to be aware of your mortgage options. What are the different types of home loans is the first thing you should know.

The government doesn’t want us to be homeless. While it can seem to be the opposite sometimes, they want as many Americans housed as possible. That’s why they’ve created a program that doesn’t rely on veteran status, area, or disability to qualify for. The Federal Housing Authority created the FHA loan to help Americans purchase homes when they could not otherwise.

There are several things taken into account when you are being assessed for qualification especially if it’s your first time buying your first home in Texas. Not everyone can get an FHA loan. Those who can consider taking advantage of it as it has some extreme financial perks. Here are the qualifications for an FHA loan:

  • bathroom in El Paso home bought with an FHA mortgage loan moderate incomeThe property must meet HUD housing guidelines
  • The loan you are taking out is for your primary residence (It Can’t Be Used To Buy A Beach House)
  • You need to have been employed for the last 2 years.
  • This loan cannot be taken out if it has been 12 months to 2 years since you declared bankruptcy. The amount of time depends on the circumstance.
  • You must wait 3 years if you have had a house foreclosed on.
  • You cannot have debt payments that will exceed more than 43% of your income when it is combined with the mortgage.
  • Your income must be verified.

What’s The Main Perk?

What do you need to qualify for a home loan? People who meet the standards for an FHA loan often decide to take advantage of it for the low cost of the down payment. Conventional loans, also called Fixed-Rate loans, almost always require a down payment of at least 20%. This is unrealistic to meet for a lot of families. Because of this, the government has made it possible for people to get homes who can only meet a smaller down payment. The FHA offers two different options for down payments. These are not options that are chosen by you. They are assigned based on your FICO score. This is your credit score. The down payment is assigned this way:

  • Those with a score between 500 to 578 will need to put down 10%
  • Those with a score of 579 or above will only have to put down 3.5%

While it may seem unfair that those who are in a better financial situation pay a smaller down payment, the government wants to make sure they get paid. This loan still has a smaller rate than a fixed-rate loan if you have a poor credit score.

The Limitations

An FHA loan cannot be taken out by someone who is intending to buy a home to flip it. This mortgage was designed for those who need a home to live in and cannot afford one through any other method. That is why homes being purchased through this program have to meet HUD housing guidelines. It prevents loans from being taken out on fixer-uppers.

There is typically a limit on the value of the property. This limit varies by area. The Federal Housing Authority is well aware that homes cost more in New York City than they do in Houston. Those who are looking to purchase in their area should look up the amount limit for the property they are intending to buy.

Is It Right For You?

You should speak with a financial adviser to discuss which loan is best for first time home buyers. It may be necessary for you to enter into this type of loan to purchase a home. This is a wonderful opportunity for people who cannot afford a home any other way. This loan is not designed for the wealthy. It is meant to help everyday people live the American dream. It may be the perfect option for you.

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 

Which Loan Is Best For Texas First Time Home Buyers?

 Home Loan Options For First Time Home Buyer In Texas

For first-time homebuyers, the myriad of financing options out there can seem overwhelming. However, taking the time to do some research on the basics of property financing could save you a substantial amount of money and time. Learning the market like where to locate the property and if it provides incentives to lenders might result in added financial perks for you. So, you need to double-check your finances to make sure that you are receiving the mortgage that best suits your requirements and who can qualify for an FHA loan.

Mortgages that are neither insured nor guaranteed by the federal government are known as conventional loans. Typically, they are fixed-rate mortgages. While they have stricter requirements for a larger down payment, lower-income to debt ratios, the potential to require private mortgage insurance, and higher credit scores make them the hardest to qualify for. Usually, conventional loans are less expensive compared to guaranteed mortgages. Know more what are the different types of home loans that would suit you.

By definition, conventional loans are either non-conforming loans or conforming loans. Typically, conforming loans adhere to the guidelines like loan limits put in place by the government-sponsored enterprises (GSEs) Freddie Mac or Fannie Mae since different lenders usually purchase, package, and sell these loans as securities in the secondary market. As of last year, a conventional mortgage’s loan limit is $484,350 overall, although it could be more for certain designated high-cost areas.

Mostly, a loan made above this particular amount is known as a jumbo loan and often carries a relatively higher interest rate. However, these loans have more risk (because they involve more money), which makes them less appealing to the secondary market. When it comes to non-conforming loans, a portfolio lender, or the lending firm underwriting the loan set their guidelines.

FHA Loans

The Federal Housing Administration (FHA offers different mortgage loan programs. Typically, an FHA loan has relatively lower down payment requirements and is much easier to qualify for compared to a conventional loan. In general, FHA loans are better for first-time homebuyers since, apart from less stringent credit requirements and lower upfront loan costs, and you can make a low-down-payment of 3.5%. Usually, FHA loans cannot exceed the specific statutory limits named above. You should also know who can qualify for an FHA loan and know the guidelines.

VA Loans

VA Loans are typically guaranteed by the U.S. Department of Veterans Affairs (VA). Although the VA doesn’t make the loan itself, it guarantees mortgages made by professional lenders. With these guarantees, service people and veterans can acquire home loans that have favorable terms, often without a down payment. Mostly, VA loans are much easier to qualify for compared to conventional loans. In general, lenders use the conventional mortgage loan to limit the maximum VA loan. Ensure to ask for eligibility from the VA before applying for a loan.

Fixed Vs. Floating Rate Mortgages

Obtaining a floating-rate (or variable rate) mortgage is another important consideration. The rate doesn’t change for the entire loan period in a fixed-rate mortgage. The obvious advantage of obtaining a fixed-rate loan is that you know what exactly the monthly costs will be for the entire period of the loan. If prevailing interest rates are considerably low, you’ve got a decent rate for a substantial time. On the other hand, a floating-rate mortgage, like an adjustable-rate mortgage (ARM) or an interest-only mortgage is specifically made to help first-time homebuyers or those individuals who expect their incomes to increase significantly over the loan period.

The Bottom Line

For those who are seeking a home mortgage for their first time, it might seem challenging to sort through every financial option. You should take your time and determine how much house you can actually afford and then fund accordingly. For those who can afford to come up with a substantial amount or have sufficient income to make a low LTV, then you will have more bargaining power with the lenders, as well as the most financing options. In case you push for the largest loan, you might be issued private mortgage insurance and a relatively higher risk-adjusted rate.

Consider the pros of acquiring a more jumbo loan with the risk. Typically, interest rates float during the specified interest-only period and will usually adjust in reaction to market interest rates changes. Furthermore, weigh the risk that your disposable income won’t increase combined with the possible rise in borrowing costs. If you’re from Texas FHA loan programs are available in several banks you just need to have the best deals.

A reliable mortgage banker or mortgage broker should help in steering you through all the various options and programs, but nothing will be comparable to understanding your priorities for a mortgage loan.

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