First Time Home Buyers? Know Your Home Loan Options

Having your own home gives you a sense of pride, freedom, achievement and security, but deciding and buying it is for the first time is one of the biggest steps one can take in life and for many it is also a biggest investment decision ever. So if you have decided to buy a home make sure everything is done wisely and the first step is deciding what the type of home, size of residence, location, and surrounding in which you would like to live.

Besides, the most important factor that comes into picture is arranging finances for buying a home. You can pay the cost in one go if you have big pocket, however if not then you can choose any of the below listed loans. A little homework about the types of home loan options available to you can help you make an informed decision without wasting much of your time and energy. This brief read gives you a basic idea about the types of home loans available for buyers.

Types of Home Loans Available in the U.S.

Arranging finances for home requires special attention as it is not every year that you plan to buy a new home. Here are some common types of homes loans and their key benefits available in the market:

Conventional Loans

Conventional loans are types of mortgage loans offered by private lenders, some of the types their key benefits are listed below:

Fixed Rate Loans and Mortgages

Conventional fixed-rate mortgages as the name suggests have fixed rate for at least some period, which makes it easy for buyers to predict the timeframe in which they can pay off the loan. This loan is worth considering for buyers who plan to stay in the home for longer duration. Also buyers who have good credit history.

Jumbo Mortgages

Jumbo loan is beneficial for virtually every borrower irrespective of their good or poor credit card history. Moreover, the borrowers are allowed to take more debt as opposed to normal loan limits. This kind of loan is worth considering for buyers who know that they will be moving out of the home in a couple of years.

FHA

An FHA mortgage loan is guaranteed by the United States Federal Housing Administration. Only a Federal Housing Administration approved lender can lend the loan. FHA loans are framed to enable borrowers with less income buy home, if they are unable to secure any other financing options.

VA loans

VA loans are especially for Veterans of American Armed Services framed by the United Department of Veterans Affairs and only an authorized lender can lend VA loans. The goal of the loan is to help veterans and their spouses to obtain long-term financing. In case veterans are not able to get private financing, the program helps them to buy home without having to pay any down payment.

A few Parting Words

Although there are multiple financing options for borrowers, unfortunately many find it difficult to find the right type of loan. Some borrowers make wrong choices and lose their savings paying off the loan, some have already lost their home waiting for mortgage approval. If you don’t want any of these circumstances in your life, it will be a good idea to consult first time home buyers Loan Experts in your area.

Can the Missed Payments in the Past affect your VA Eligibility?

VA loans have gained in popularity in recent years. According to a report by The Huffington Post, the Department of Veteran Affairs backed 630,000 mortgages for veterans and military personnel in 2013. Unique features and unmatched buying power make VA loans a preferred choice among military personnel.

VA approved lenders can help veterans understand the specifications including the eligibility criteria to obtain a mortgage. They can assist borrowers to find the right property, and also negotiate the purchase agreement. However, when veterans apply for a VA loan, lenders will analyze their past credit performance in order to determine whether or not to approve a loan. A borrower who has a history of making timely payments is considered safe. On the contrary, a borrower with a history of slow payments and delinquent accounts may find it difficult to get a loan approval. Here are some of the factors that are considered when you apply for a VA loan:

• Late Payments

When you apply for a VA loan, the underwriter will analyze your past credit behavior. A borrower who has faced some financial difficulties for a specific time period, but has maintained a good payment history, will not be disqualified for a VA loan. If you make regular and timely payments for 12 months after the date of your last defaulted payment, then the lenders consider that your credit has been re-established.

• Credit History

When it comes to VA loans, the absence of established credit history will not disqualify you from getting a mortgage. A satisfactory history of payments is preferred as it helps establish a positive credit history.

• Unpaid Judgment

If a borrower has an unpaid judgment, then his mortgage will not be approved. However, a borrower who is on a repayment plan and has an acceptable payment history may be approved for a loan.

• Foreclosure

A borrower whose previous residence was foreclosed within the last two years from the disposition date is not eligible to get a VA loan. If the foreclosure was on a VA loan, then the applicant may not have full entitlement that is available for the new loan.

According to the rules laid down for a VA loan, a borrower can’t be disqualified for missed payments during a period of financial crisis. However, in such situations, a borrower will have to provide relevant proof to show that the circumstances were beyond their control. The applicant is also required to submit a proof to confirm that the situation has been resolved.

Determining Eligibility for Texas Veteran’s Home Loans

Texas veterans home loans offer the military veterans in Texas an opportunity to own a home. The best thing about these loans is the fact that veterans don’t need to make a down payment. Also, they can receive up to 103.15% of the sale price of the property as a loan. Out of this 3.15% includes the funding fee that can be financed with the total loan amount. In order to qualify for such loans, veterans need to fulfill certain conditions.

When you choose to apply for a mortgage, the best decision you can make is to consult a respected mortgage company with qualified loan officers who can evaluate your current financial condition, assist you in understanding various loan programs and apply for a loan. They can also assist you in finding a qualified real estate agent.

When working with a loan officer on a home mortgage, they will help you through the requirements process, including proof of service and income. Here are some of the documentation requirements for veterans home loans:

1. Certificate of Release or Discharge (DD214): This form is available for retired veterans, reservists and those serving in the National Guard. The form is proof of discharge from active duty. A loan officer can assist you in filling out this form and submitting it to the lender who can help you get approved for a VA mortgage so you can begin the process of owning a home.

2. Certificate of Eligibility (COE): You will need this when applying for a loan. You can get a COE from the VA or your mortgage company can assist you in obtaining one. This certificate ensures that you meet the minimum VA loan standards.

3. Statement of Service: Active duty service members need to submit this document. This document is evidence of their active service that specifies the start date of their duty and their end date. This contains the signature of a senior officer.

Especially for Texas, there are specific mortgage programs for veterans such as the Texas Veterans Land Program being offered by the Texas Veterans Land Board. A leading company in the state assists you in choosing the best Texas veterans home loans. These experts can help you determine the best and most affordable price range based on interest rates and other costs. This is especially for veterans who have financial constraints. The mortgage company will walk you through the entire process and ensure that you make an informed decision.