What Do You Need To Do To Buy A House In Texas
4. Save For Your Down Payment
Saving for a down payment may take some time, especially when you are saving for a 20% down payment.
Fortunately, there are many options for people that cannot save that type of cash. For example, an FHA loan only requires a 3.5% down payment, and some of the options for conventional loans offer down payments as low as 3% provided mortgage insurance is included. If you happen to qualify for either USDA or VA loan, you could secure a property with 0% down.
The reason that 20% is often the quoted number has to do with that this is a minimum amount you need to put down in order to avoid mortgage insurance. In addition to this, if you are able to put down a large down payment, it will lower the monthly payments.
You will also need to provide bank statements over a period of 2 months to show you have had the funds for a down payment in your account for a minimum of 60 days so that these funds become eligible for use. Lenders will ask for this documentation to make sure you haven’t taken out a loan in order to cover the down payment.
5. Get Pre-Approval
Once you feel confident that you are ready to approach a lender, getting pre-approved is the next step in the process. Pre-approval will indicate the amount you are able to borrow and it also shows a seller that you are serious.
For your pre-approval, lenders take into account your current credit report to ensure your credit score qualifies and to ensure you do not have major blemishes or debts like bankruptcy. The lenders also look at your debt-to-income ratio and they will also ask for information associated with your assets and income. You should have documents ready such as a recent W-2, bank statements, and paystubs, and other paperwork that may be relevant to ensure the entire process goes as smoothly as possible.
Once you receive pre-approval, make sure that you do not engage in making major changes when it comes to your credit profile. This could include switching jobs or taking on more debt as this may risk your chances of approval.
6. Find A Reputable Real Estate Agent
A qualified and experienced realtor will take you through the entire process, making everything go smoother and faster. They can also help to lower the anxiety that many first time buyers go through.
When you start looking for a realtor, in-person interviews or online reviews can be extremely helpful. You want to find someone that honors what you want and is happy to advocate on your behalf. They should also be honest and assist you in setting up realistic expectations.
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.