Nearly every person wishes to buy a home and lives happily with his family. But houses are very expensive and not within the financial reach of people. Many of the aspiring people planning to buy a home particularly the first time home buyers have to rely on numerous government assisted loan programs because it is difficult for them to qualify for conventional loans.
One of the decisive factors in approval of mortgage loan is credit scores which helps to analyze the financial position of the borrower and determine whether he/she can make regular mortgage payments or not. Bad credit means a person has not paid the debt for several months and it would be a risk to give him another loan as he would probably default on the mortgage. The bad credit mortgage lenders Houston TX mostly include government-approved lenders who make it easy for people to buy a home even with a moderate income and bad credit rating.
The government-backed loans includes the Federal Housing Administration (FHA) loans, Veteran Affairs (VA) loans, and United States Department of Agriculture (USDA) loans. The loans are backed by the government which lowers the risk of the lenders in times when the homebuyer defaults on the mortgage. The FHA lenders are known to be best bad credit mortgage lenders Houston TX as they only asked the homebuyer to only make 10% down payment to obtain the loans. The 10% down payment is considerably less as compared to 20%-25% down payment required by banks and private lenders.
The VA lenders also come under bad credit mortgage lenders Houston TX and the VA loans are entitled to veterans having a bad credit score. The VA loans have no minimum credit score requirement at all but some lenders do require a good credit score of the veterans. The VA loans offer the best benefits such as no down payment or mortgage insurance, and the interest rates and closing costs are also less than conventional home loans.
The USDA loans are best if a person is planning to buy and own a Texas home in rural areas. These loans are affordable for those who have moderate income as compared to people living in urban cities. There are also certain factors which homebuyers must comply with while obtaining the government home loans which are having a high salary, no outstanding debt to pay and having a low debt to income ratio.