Did you know around 33% of homebuyers are first-timers? Another surprising fact is that 86% of first-time homebuyers are under 28 years old. So, it is not difficult to imagine how they struggle to come up with a down payment, right? Also, many of the low- to moderate-earners have their eyes on the FHA or VA loans. The burden becomes bigger as so many of the poor credit holders apply for government-backed loans. It is a relief for the VA loan buyers because they do not have to put up with a down payment program. However, FHA and conventional loan applicants fear the worst. Handling mortgage insurance premiums, on one hand, paying off the down payment on another is not a stress-free sight. Paying heed to such concerns, down payment assistance programs have come to existence.
Since many people have not got hold of these programs, the myths are flying around. One of the common misconceptions – down payment assistance is linked to risk. The lender assesses a thorough check on the financial condition before declaring the mortgage. According to the need, the borrower can gain access to the benefits of such programs. Some borrowers have also argued that the program is not an excellent choice. On the very contrary, we beg to differ. Here are a few myths and misconceptions related to down payment assistance to purchase homes in Texas debunked.
Myth #1: It is Difficult to Qualify
Every loan program imposes a series of requirements, and the down payment assistance programs are not different. If you are lender is willing to offer a forgivable community second loan, you must pass the requirements to pass. Following are the essential details,
Apply only if it is for a primary residency
Minimum credit score of 620 and 600 for USDA and FHA loans respectively
Available for a townhouse and 1-4 single-family residence
Finish an online session of Homebuyer Education Class
Following the standard requirements, you are good to go. Meanwhile, borrowers should prove that they are financially responsible. The down payment assistance will offer up to 6% of the loan amount but the buyers should meet the eligibility criteria. Besides these, you can purchase homes in Liberty County, Galveston County, Harris County, Montgomery County, Harris County, and a few other places.
Myth #2: It is only for First-Time Buyers
The lenders do not restrict the program within the first-time homebuyers only. Yes, they are the ones seeking help with a large loan. Nevertheless, anyone who has not purchased in the last 3 years can apply for the mortgage. If you bought a house a few years back and are renting now, you can opt for the program. Of course, the down payment assistance to purchase homes exists for the homebuyers and not for the investors.
So, the good news is there are plenty of local participating lenders available. They can write the mortgages linked to the program. Of course, it is better to do a little homework before rushing.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.