Are you thinking it is time for you to purchase a house? Well, it is the right decision to take if you have settled with a decent job. A house is the right kind of investment to make if you are looking to make some good returns. If you are buying a house for the first time, then you will have several options for you. Most people are concerned about the eligibility criteria when it comes to applying for a loan. And the most important in this list is the credit history. This basically determines whether you have the ability to repay the loan and have always repaid your loans or not. This gives more assurance to your mortgage lender about your intentions as a borrower. But now there are provisions for people who don’t have a very good credit record.
There are a number of first time home buyer programs in Houston which offers you a lucrative loan for financing your dream home even if you have a poor credit score. Most of the first time home buyer loans will allow you to get the loan if the credit score is somewhere between 300 and 850. So, are you willing to apply for such first time home buyer loans? Then, you should know that apart from the interest, you need to make certain other payments for these loans. Here, we have enlisted a few of these expenses that you have to incur for the first-time home buyer programs. Take a look.
1. Down Payment
The first payment that you have to arrange if you want to apply for the first time home buyer program is prepare a down payment. Regardless of the loan you are applying for, you need to pay a certain share as down payment. You just need to find out the amount of don payment you have to give and if it can be sourced from anywhere you like. Some of the first time home buyer programs have a 3.5% down payment if you own a particular range of credit scores. And if the credit score is a little lower, then you have to make a 10% down payment. If you want to save the maximum on the down payment amount, you have to increase your credit score as much as possible. Whatever be the amount, you must be prepared to make this payment.
2. Closing Costs
Everyone has certain other expenses other than the down payment when they are buying the house. You have to pay for the title expenses, the escrow reserve requirements, origination charges, and so on. You need to make sure that you have kept aside the estimated amount for such expenses which you will have to incur while purchasing a house. But don’t worry if you haven’t. With some first-time home buyer programs, you can share this cost with the lender, builder, or the seller of the house.
3. Mortgage Insurance
Lastly, you will also have to pay for mortgage insurance if you are purchasing a house with a home loan. You might have to invest in a home loan that requires you to pay an upfront premium when you are borrowing the amount and another premium to be paid annually. This usually differs depending on the duration for which the loan is to be paid and the initial loan-to-value ratio.
So, if you are about to apply for a home loan, make sure you arrange for these payments too. Now you can start looking for the right home loan lenders for your first house such as the FHA or the VA loans at the best interest rates in Houston.
Author Bio: Joan Gallardo, a Senior Loan Officer, with +18 years of experience, here writes on 3 payments to be ready for while applying for the first time home buyer programs in Houston. He suggests looking for the lenders with the best interests in Houston.