Are you thinking of opting for a first-time home buyer program? Then here are a few things you must check first.
If you are purchasing a house for the first time, then you must be having mixed feelings right now; a combination of excitement and nervousness. It is understandable that the sheer joy of finally owning a property must be certainly overwhelming and at the same time, you must be a little anxious because of the decisions you have to make, especially with respect to the varied loan programs at your disposal.
You will notice that there are numerous first time home buyer programs in Houston and each one of them will lure you with their own specific benefits. In order to pick the right program which has the potential to give you maximum benefits, you have to follow a systematic approach involving preparing a checklist that will help you understand which programs work best for you.
1. Check Your Options
First of all, you must understand the market of these loan programs is sprawled to a great extent and as a result, you have the access to multiple options. So, a wise step would be to check all these options, undertake a research on each and every loan program based on your eligibility factors, and then decide on the one which can offer you maximum flexibility and optimum value.
2. Check Your Budget
You might be eligible for a number of loan programs but you have to check if it is within your budget or not. So, since you must have a set budget before going out hunting for the right loan programs, make sure you keep an eye on this budget while browsing through the different loan rates. Most defaulters land up in such a situation owing to neglecting this factor while choosing their loan program.
3. Check Rates of Interest
Never make the stupid mistake of choosing a loan program without checking the rates of interest because it might prove to be out of your budget. There are different rates of interests for every home loan program. So, you must compare the rates of these different programs and also the other clauses so that you can gain from this intense competition that exists between various lenders.
4. Check Down Payment
If you pay a higher down payment, there is a chance that you can lower your rate of interest for the home loan. So, you should check how much down payment you can make for the loan. There are special programs like the VA loan or the USDA which can provide you with close to 100% financing, ensuring that you can pay a considerable down payment can prove to be advantageous for you.
5. Check Your Credit History
The qualifying factor for ahome mortgage is directly proportional to your credit history. Higher the credit score, better are your chances of being able to pick from a wide range of loan programs. On the other hand, if you have a bad credit history, your options for loan programs become limited to only a handful which is generally chosen by people with lower credit scores.
6. Check Your Loan Period
Usually, you can apply for such a home loan for a time span of 15 to 30 years. A higher term for a loan actually means a greater interest amount. So, ideally, you should check your loan period and try to reduce it without putting too much pressure on your available resources if you want to reduce your interest rates.
7. Check Closing Costs
Last but not the least, you should check the closing cost of your home loan program. A particular loan program might sound appealing at the beginning but all of a sudden, you may realize that it is no longer attractive because of its high closing costs. The closing costs of the loans usually vary between 2 to about 5%, and hence, it is extremely crucial for the first time buyers to check the closing costs before choosing a home loan plan.
So, now that you have a checklist prepared for you, you can resort to the different lending service agencies and choose the perfect loan program for yourself. And for advice and suggestions on FHA loans for bad credit, wait for my next blog.
Joan Gallardo, an efficient Senior Loan Officer, with experience in various home loan programs including FHA loans for bad credit, here shares with us a few things to check before choosing the right first time home buyers programs in Houston.