Whether you are just starting to save up or you already have something in your mind about the house you like, we can definitely help you get your dream home! It can be an overwhelming task yet exciting when choosing and buying your first home. That is why Alexdoesloans offers you the complete tools and resources to guide you all throughout the home-buying process.
First and foremost, get all the paperwork ready to streamline the pre-qualifying process and improve the odds of getting approved. For instance, the financial documents, figure out home buying factors like the type of property to buy, down payment to make, credit score, and many more. Getting ahead of this step will help you find out whether you are qualified, how much you can qualify for, and the estimates on all costs involved.
Loans and Down Payment Assistance (DPA) on a House
Buying a house would still require you to make a down payment and the required down payment depends on a lot of factors. Such are the type of loan you receive, your income, amount of assistance you choose, cost of property, and the amount you want to borrow.
The computation of down payment for a house will be equal to a percentage of the cost of the property. So, if the home costs $150,000 and the mortgage loan officer asks for a 5% down payment, then you shall pay $7,500 once purchased. Larger down payment means smaller monthly mortgage payment. On the other hand, smaller down payment means a larger monthly mortgage payment.
What is Down Payment Assistance (DPA)?
Alexdoesloans provides the mortgage loan and funding for your down payment once approved and considered eligible. You may choose to receive the DPA either as a grant or as a deferred forgivable second lien loan. DPA as a grant no longer needs to be repaid. While deferred forgivable second lien loan has to be repaid when you sell or refinance within three years.
Alexdoesloans can help you understand your options and select the mortgage that’s suitable for your financial situation. Once found eligible, you can receive the free money in order to help you buy your new home.
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FIRST-TIME HOME BUYER PROGRAMS: WHICH LOAN PROGRAM IS RIGHT FOR ME?
Conventional Loan
Conventional Loan is not guaranteed or insured by any government agency like Federal Housing Administration (FHA), Farmers Home Administration (FmHA), and the Department of Veterans Affairs (VA).
Generally, conventional loan programs don’t have the same perks as government-insured loans. For instance, low credit score requirements and no down payment or mortgage insurance. While some lenders may look for a credit score of 660 or higher, it is still possible to get a loan approval with a score as low as 620. Also, interest rates largely depend on your credit score and overall credit history. The better your credit score is, the less you will pay in interest over the life of the loan.
Federal Housing Administration (FHA) Loan
FHA Loan program is a good option for first-time home buyers. It requires a low down payment and can have less-than-perfect credit. Thus, making it the easiest among the first-time home buyer programs to qualify for.
If you are worried that your credit score isn’t high enough to qualify for conventional loan, FHA can be worth the try. This type of loan lets you get a home even with a credit score of 500 if you have a 10% down payment, or 580 if you have a 3.5% down payment.
Veterans Affairs (VA) Loan
Backed by the US Department of Veterans Affairs, VA Loan is specifically designed for select members of the military community, active-duty service members, widowed military spouses and other beneficiaries. This type of mortgage loan program no longer requires down payment and doesn’t change private mortgage insurance.
This loan program requires the veteran to have a VA home loan in Texas. The applicant should include but are not limited to the following documents:
– VA certificate of eligibility
– W2 statements for the past 2 years
– One month of most recent LES or pay stubs
– Two months of most recent bank statements
– Copy of DD214 (if discharged/separated from the Military)
Conclusion
While there are various first-time home buyer programs offered by Alexdoesloans, everything will still depend on your financial situation. Choosing conventional loan could be your best option if you have high credit scores of at least 740 and can commit to a 20% down payment. As a result, you may be offered with the best interest rate and lowest fees. On the other hand, you may opt for an FHA-insured loan when you have low credit scores. FHA loans charge their own form of mortgage insurance called mortgage insurance premium. It includes an upfront fee and ongoing charges than can be added to your mortgage cost.
