The amount of down payment required for a conventional home loan may vary anywhere between 5 to 20 percent. As the amount of down payment is high, homebuyers with insufficient funds, often have to procrastinate their home-buying decision to a later date, despite their being eligible for a home loan. If you too are planning to take a home loan but do not have sufficient funds to pay for the down payment, in this post we list three Texas home loan programs, that require zero or minimal down payment. Let’s take a look. USDA Loans USDA home loans are one of the most sought after home loans in the US. They come with significant benefits allowing homebuyers to buy a property in the rural and suburban areas. Borrowers who qualify for a USDA loan need not pay any down payment. In addition to this, the borrowers may also have the closing costs rolled into their loan. VA Loans Backed by the U.S. Department of Veterans Affairs, the VA loans are one of the most popular home loans among veteran homebuyers. The VA loans not only have interest rates that are much less than what conventional loans offer, but they also allow borrowers to finance 100 percent of the property value. While there is a funding fee linked to obtaining a VA home loan, even this fee can be rolled into the original loan, thereby allowing borrowers to pay almost nothing. FHA Loans Insured by the U.S. Federal Housing Administration, the FHA loans are another low down-payment home loan option for home loan borrowers. If you don’t have a great credit score, you can still get an FHA loan, that too at a minimum down payment of 3.5 percent. In addition to the down-payment amount, FHA loan borrowers are also required to pay an upfront premium of 1.75 percent, that can be rolled into the loan. Conclusion If you are planning to buy a home and are worried about the down payment, then this post should have helped. If you still need more help, get in touch with a home loan consultant who can help you weigh the pros and cons of different home loan programs, allowing you to choose a loan that best suits your requirement.
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Are you planning to buy a new home and worried about finances? If you have served and are still serving as active duty personnel in the U. S. military, then you can opt for a VA home loan. Introduced in 1944, these loans offer numerous benefits like no down payment, competitive interest rates and no private mortgage insurance. These benefits have proven to be a boon for military veterans as well as their families amidst the grim economic situation. The U.S. Department of Veteran Affairs (VA) has provided benefits to around 20 million veterans and service members over the years. In addition to that, various states have also designed and implemented several programs for veterans. The state of Texas could be a good example in this context. Many military veterans want to buy a home in Texas as there are several military bases located across the state. VA loans in Texas help them get their dream home conveniently and affordably. Veterans who are eligible for VA loans also get VA loan entitlements. This is a specific sum that the Department of Veteran Affairs promises to guarantee. However, there are some basic qualifying criteria that they need to fulfill to receive this loan. Eligibility Criteria There are two categories of service requirements when one is in the military; these are - wartime and peacetime. To be eligible for a VA home loan, homebuyers need to satisfy one of these two requirements that have been set forth by the Department of Veteran Affairs. Current and former U.S armed forces can get the VA home loan benefit if they meet the service requirements. You will be eligible for VA loans if you have provided 90 days of uninterrupted service during wartime and 181 days during peacetime. People who have served in the National Guard or Reserves for more than six years are also eligible for this loan program. In case you are the better-half of a service member who lost his life during their term of service or suffered any disability when serving, then you are also eligible for a VA loan. Loan Credit and Income Eligibility If you are interested in getting a VA home loan, then you need to meet the credit and income requirements that are necessary. Though the Department of Veteran Affairs has not levied a minimum credit score, ideally a borrower should have a credit score of 620 or above. Contact a reputed mortgage company to know more details about various mortgage programs and how to go about the application process. Since times untold, people have strived to have a better living space. Types of homes have evolved over the years; however, what remains constant are the desires and dreams of people wanting to have a home of their own. For those entering the market for the first time, this is a critical decision.
Millions of Americans turn towards home mortgage loans to make their dream a reality. For buyers, it is very important to understand the way mortgages work. For example, if you are looking for a property in Texas, it is ideal to seek the services of a reputed mortgage company in your area. So, as a first time home buyer in Texas, getting the assistance of a mortgage specialist can pave the way towards your dream home. Let us now talk about the benefits of home-ownership. Buying a home is one of the most important financial investments that one can make. Whatever amount you pay to your lender every month gradually adds to the “equity” of your property. Once your property value increases, it is as good as having money in your bank account. In some cases, homeowners may also receive federal or state income tax benefits. For most of us, buying a home through a mortgage is a long-term financial commitment. From the down payment and loan closing costs to monthly payments, home buyers need to prepare well and in advance to incur the costs over time. Also, insurance premiums, taxes and maintenance charges must be met in the long term. Hence, home buyers in Texas should consult a mortgage expert to understand the challenges involved in the process of buying a home. A mortgage expert can provide you with helpful information on flexible mortgage programs such as the Federal Housing Administration (FHA), Veteran Affairs (VA) or Fixed Rate Mortgages. Some of these programs have unique features like low or zero downpayment and attractive interest rates. With the help of such programs along with expert mortgage services, potential homebuyers can move into their homes faster and take possession of their property without any hassle. Before you consider applying for any of the government-sponsored mortgages, such as an FHA loan, you need to learn about the details of the program. FHA loans are the most popular home loans that are insured by the federal government. If borrowers are not eligible for conventional mortgages, they can apply for an FHA, USDA or any other flexible loan programs. In order to qualify for these loan programs, borrowers need to meet some important criteria. Although this criterion may be somewhat strict, the conditions are much more lenient as compared to traditional loans. Fixed or Adjustable Rate Mortgage - Which One to Choose Considering the frequent changes in home loan interest rates, industry experts suggest that you lock-in your interest rate as soon as you find that your monthly payments are affordable. Hence, you may want to consider a fixed rate option in such a scenario. If you don’t lock in your rate, you may have to consider taking a loan with an adjustable interest rate. Let’s take a look at the benefits of taking out a fixed rate mortgage:
Now, let us consider situations in which taking an adjustable rate mortgage (ARM) could be a better option:
Some adjustable rate mortgage plans allow borrowers to start with a low initial monthly payment. However, the rates are adjusted every year. The low rate in an ARM remains fixed for an introductory period of time. This period can last from 3-10 years. Due to the uncertainty of an adjustable rate mortgage, fixed interest rate home loans are considered more popular among home buyers. However, before making your decision, you should consult a loan officer from a reputable mortgage company for more details. Many first time home buyers in Texas may find it difficult to buy a home, despite the thriving housing market there. These difficulties are not because of high monthly payments, but the required down payment and the closing cost. Many first time buyers struggle to come up with 5-10% of the purchase price in advance. In order to afford such expenditure, they need mortgage assistance programs offered by the US government. These programs are intended to help any first time home buyer the hurdles of a lump sum down payment and monthly payments to own a home. In the first quarter of 2014, the housing market in Texas did not pick up as expected. Although real estate agents, economists and home experts cite various reasons for the sluggish market, a lack of information about mortgage assistance programs is another major factor. Need for Texas mortgage assistance programs According to the Wall Street Journal (WSJ) the entry-level homebuyers in the U.S. have been going through a rough phase due to the tight lending standards, high prices and the slow economy. All of these reasons are creating a major hurdle in the loan approval process. The stringency to have a good credit score, and requirement to submit various supporting documents can be overwhelming, especially to those who are buying their first home. Thus, knowing about various loan programs and down payment assistance programs offered by the state can be helpful. One such program is called “My First Texas Home” that is available for first time buyers as well as those who have not bought a home within the last three years. Apart from these qualifying conditions, some others include:
In order to realize your dream of owning a home in Texas, you can hire an expert lending firm. Such a firm can provide you with complete information about various types of mortgage assistance programs, which one is suitable for you considering your current financial condition. Teachers, peace officers, firefighters, veterans, and low to moderate income home-buyers can get down payment assistance for buying a home. Loan programs such as the ‘Homes for Texas Heroes’ and ‘Home Sweet Texas Home Loan Programs’ are intended to provide the much needed assistance to various home-buyers as mentioned above. A network of lenders across the state helps borrowers get the benefits of these programs. The benefits are as given below:
1. Borrower gets a fixed rate for 30 years payable at 4.75% interest on a VA, USDA-RHS, or FHA mortgage loan. The approved assistance for paying closing cost or down payment in this program is 5% of the mortgage. 2. Borrowers get a fixed rate for their mortgage at 4.25% spanning a 30-year period on a FHA, VA or USDA-RHS mortgage loan. The assistance for payment of closing cost or down payment for this program equals 3% of the mortgage. Thus, the down payment assistance comes with a lesser interest obligation for veterans, low income persons and others mentioned above who are looking to buy homes. Dallas County Down Payment Assistance Program If you are a first time home buyer looking to buy one in unincorporated Dallas County or one of the thirteen participating cities, you can get down payment assistance in the form of a $7500 loan. The best part about the loan is that it does not put you under any obligation of paying interest and closing costs. However, if you transfer the deed, don’t use the home as your primary residence or sell it, payment of the balance loan amount becomes due. In order to get this loan, you need to prove your eligibility on the parameters of purchase price, income, and home location. If you find difficulties in understanding various loan programs and loan procedures, down payment assistance programs, a reputed lending firm can assist you at every step including the paperwork and loan processing. Look for an expert lender that can help borrowers buy their dream home. In Texas, home loan borrowers have the option to opt for special bond programs, apart from the FHA, VA, USDA, and conventional home loan options. In many cases, a bond program can be the best option for the borrowers. Let us take a look at some of these programs: Texas First Time Home-buyer Bond Program For many home loan borrowers, the Bond Program 77 or the Texas First Time Home-buyer Program can be the most suitable loan program. Prominent features of this program are:
Texas Mortgage Program: TMP-79 Another bond program that you can apply for is the Texas Mortgage Program. The purpose of designing this program is to replace the single-family bond program. More than $600 million has been set aside for helping homebuyers under this program. Compared to the previous family bond program, the Texas Mortgage Program is known to help borrowers on down payments and closing costs. The additional elements of this program comprise up to 5 percent of the total home loan. An important feature of this loan program is that the income level eligibility of borrowers is based on the location of their home. In short, there are different maximum income requirements based on where the home is located. The above-mentioned bond programs are suitable for borrowers who cannot afford to make the required down payment for the home loan, but can pay a part of it. These programs can be combined with other programs, and borrowers can actually get the chance to own a home without any down payment. You need to consult an expert on these bond programs as they can help you decide whether you are eligible for such a loan program or not, or what is the best option for you based on your financial circumstances. Once you are aware of the best Texas Bond programs available to you, the next step is to begin the application process. Since these programs help you resolve your down payment and interest rate issues, the process involved can be quite complicated. Thus, in order to fulfill your dream of owning a home, you need to take help from the experts. During the loan approval process, there are other important aspects to be aware of such as the Good Faith Estimate (GFE) and the Truth-in-Lending disclosure worksheet. These are important to understand because they include the various costs involved in loan processing. You shouldn’t need to worry about these issues. Rather you can focus on hiring a specialist lending firm with comprehensive knowledge of mortgage processing. They will provide you with an array of options and help you make the right choice based on your requirements. Are you looking to buy a home with simple but fascinating architecture in Texas? Or do you wish to buy a spacious and afford-ably priced home in a nice location? Properties of various kinds are waiting to change hands in this state, and which one you would eventually buy will depend on your preference, requirements, and of course affordability. You can find wonderful properties that can easily fulfill your long-cherished dream of buying your first home in Texas. However, if you are feeling the pinch of low cash reserves and a moderate monthly income, buying a home by making a large down payment can put you under serious financial stress. However, with the help of a lending firm, and by following some necessary steps, you can soon be holding the keys to your first home! Home Mortgage Process Applying for a new home is the first and the most important step that determines receiving a loan successfully. However, prior to this step, another key decision you need to make is to choose a lender that will take you through the entire process seamlessly. You need to find a lending firm that stands out from all other home mortgage lenders. You can do so based on their attitude towards your concern, and keenness to find a suitable solution regardless of your financial situation. A reputed and knowledgeable lender is always ready to put in their knowledge to fulfill your desire by suggesting a wide range of mortgage loan options. When you see a helpful loan officer that is happy to assist you with personalized solutions, then you will know that you have found an expert who can lead you in the best direction. The lending firm will first assign a loan officer to review your current financial situation. The assessment includes your current monthly income, credit history, the price range and the amount of down payment that is affordable to you. Once the application requirements are fulfilled, an underwriter will review it for approval. In order to increase the possibility of approval, an established lender will guide you through a faster and more accurate application process towards a successful closing. Things considered for mortgage loan approval Verifying the source of your income, ability to make down payments, assets, employment history, and debts are the factors considered for mortgage loan approval during the home loan application process. An underwriter evaluates the application considering each of these parameters to determine whether you qualify for a loan or not. Verifying Your Assets:
Debts The lender lists all of your current debts including car loan, credit card, personal loan, student loan, child support payments, etc. Your credit report will give a clear indication of your credit history. Your Debt-to-Income Ratio The debt-to-income ratio will be determined by the proportion of your gross monthly income and the amount you spend on debt. Your lender will consider this ratio to find your affordability to repay a loan amount, and the type of loan suitable for you. Employment Status You need to submit supporting documents as proof of your employment and your current gross income. Apart from the factors mentioned above, there are various other aspects such as, home warranty options and property insurance coverage that you need to consider before buying your first home. A dependable lender will assist you in every step to ensure that you move into your dream home in the shortest possible time. |
AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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