Are you a first time home buyer?

Most people dream of owning a home of their own and spent years saving in order to do so. If you have a similar dream, then you should consider various factors including your monthly income, savings, and budgeting before purchasing a new home. If you are serious about buying your first home, start your process by exploring financing options such a mortgage rates and programs. Buying a new home requires research, guidance and adherence to guidelines and rules.

Mortgage rules vary from one state to another across the United States. Some states even offer specific mortgage programs for home buyers in those states. For example, a first time home buyer in Texas can get financing through Texas Bond Programs.

Apart from opting for the right mortgage program, by chalking out a plan, potential home buyers can accomplish their dream to become homeowners.

Work to Improving Your Credit Score
When you contact a mortgage company for mortgage loan approval, your credit score will be checked at first. In fact, your credit score plays a vital role in determining if you are eligible for the loan or not, what type of loan, and rates. Hence, before you talk with a lender, it’s better to check your credit score by getting the credit report yourself. You can order credit reports from AnnualCreditReport.com. It is a free service, authorized by the federal government. After you know your status, you can then work to clarify any errors or can pay off any outstanding debts negatively affecting your score.

Save well in advance
Typically, you need to pay between 5% and 30% as down payment to get competitive rates on mortgage loan. For this, you may have to work towards building up your savings. To do this, you may need to cut out all unnecessary expenses from your monthly budget.

Finding a reputed real estate agent
This step takes time as finding a reputed real estate agent can be difficult. Ask friends, family members, research references for a reputed real estate agent. A good way to verify the credibility about the agent is to explore the internet.

Secure a pre-approved loan
Once you know how much loan you can afford, only then you can begin to research and shop for a home that fits your requirements. You will need to thoroughly understand the types of loan options available to you, and compare rates and other aspects conventional and non-conventional loans.

Find the Home of Your Dreams
You can take the onus of looking around and finding a home yourself, but that could be a difficult task. It is advised to read and research online about a house by checking reliable databases.

Once you find a dream home, talk with a reputed mortgage company that can provide flexibility in terms of mortgage options and loan processing assistance.

Home buying requires discipline and patience. A reputed mortgage company can assist you with guidance on mortgage programs, application, and securing a loan, making the home owning process easier for you.

What the First Time Home Buyer in Texas Must Know

In the excitement of realizing their dream, first time home buyers can make some elementary mistakes. The falling housing market since the financial downturn of 2008 has made it even more difficult for them to choose a suitable home loan option as now they need to consider many variables for making the right decision. Some of these include their credit score, current income, type of property they want to buy, and of course mortgage interest rates.

Well, if you have friends and relatives in Texas who are aware of all the loan options and there is no vested interest for suggesting a particular loan, it could resolve your concern. However, it is advisable to learn about your options based on various factors. Before getting to know what your best options could be, let us learn about a few common mistakes the first time home buyer makes so that you avoid making them yourself:

• Unrealistic estimation – Shifting from a rental to your own home entails a new responsibility. Keep in mind that if you wish to buy property, it could be overpriced, and you may end up paying a higher monthly payment. In order to avoid such situations, hire a reputed lender that can weed out such possibilities.

• Choosing the wrong Realtor – First time home buyers need to find a realtor who understands their anxieties and confusions; and has the experience making the process easily understandable. You do not want a pushy realtor to rush you into buying a home that you may regret later. So, do your homework, and also ask your friends and relatives to recommend a realtor who specializes in first time home buying.

• Not checking out all the available loan options – Buying a home for the first time needs sound judgment. Many first time buyers are not aware of the various flexible loan programs, and opt for loans that are more expensive.

• Not understanding the contract – Do not hesitate to get detailed clarification from your realtor regarding the home loan contract. Not understanding even a seemingly simple clause can lead to serious financial or legal complications in the future.

Texas First time home-buyer bond program
For first time home buyers in Texas, the first time homebuyer bond program can be the best option in terms of suitability. Some important features of this program are:

• Meant for borrowers with low or moderate income, and who look to buy a home for the first time
• 30-year repayable mortgage for home loans with competitive interest rates
• Help in lower down payments and closing costs

 The terms mentioned above make the first time homebuyer bond program a good option for many borrowers. Consult with your lender in detail to find the loan program that is most suitable for you.

Opportunities and Support for First Time Home Buyers in Texas

If you qualify as a first time home buyer in Texas, you can get the advantage of the $600 million home-buyer assistance program announced by the Texas Department of Housing & Community Affairs (TDHCA) through securities initiative backed by mortgage. It would be interesting to know that you need not actually buy a home for the first time to qualify for such a loan program. These programs are open to anyone who has not purchased a home in the last three years.

In Texas, eligible first time buyers can get the benefit of lower down payment, low interest rates and income tax credits on their mortgage. In order to check whether you qualify for these programs, look for a reliable lender who can inform you about the income, credit score and other requirements. A program even gives federal income tax credit on mortgage of up to $2000 payments annually to qualified borrowers.

Income eligibility for First time home buyer in Texas
First time home-buyers in Texas need to show their income to qualify for down payment assistance. This is determined by a simple formula based on the home buyer’s family size and what is known as the area median family income. The income limits range from 80% -115% of the area median family income and the variations are based on county in which a particular property is located. If you are a veteran, professional public educator or a first responder, the income limits will be higher.

Lesser Restriction for areas of economic distress
The first time home buyer program is for those who have not owned a home in the last three years. This criterion is flexible for buyers in areas of chronic economic distress. In these areas, the criteria for home buyers are less stringent.

Types of properties available for first time buyers
Before considering various properties that are available, a first time buyer needs to prove the following:
1. Should be living in Texas
2. Should buy a property to use it as their primary residence.
You can choose to finance a single family home, condominium and even duplex properties. To get a home loan on a duplex property, it should have been first occupied as a residential property five years prior to the closing date, and you intend to live in one section of the property.

Eligibility for borrowers
In order to get the benefits of the first time home buyer loan program, borrowers need to choose a reputed lender, meet some essential qualification criteria, and pay the required fees. The home buyers need to have credit score of 580 to be eligible for the Mortgage Credit Certificate program designed to give them tax benefits. To get the benefit of the down payment assistance program, borrowers need to have a credit score of 640.

For buying your first home in Texas, an expert lending firm can assist you the best. Else it could be difficult to comprehend the relevant terms and conditions to receive the loan approval.