3 Tips on First Time Home Buyer Program with low Credit Scores in Houston, TX

Nobody needs to stress on the fact of how challenging the home-buying process is for a first-timer. If the person has poor credit scores, the stress level goes higher. However, first-time homebuyers can still enjoy some of the benefits of living their American dream. If the credit score is not an issue, you can out down 20% of the loan value. When the credit score is the issue, you can choose a 3.5% or 10% down payment. This scenario is applicable when you are choosing an FHA mortgage. There is another possible scenario exclusively for the eligible veterans and their surviving spouses – you can get hold of zero down payment.

Before you embark on the journey of finding the perfect house loan, you should have a look at your financial health. Before buying your dream home, you need to audit your finances. After having checked the finances, you should look at your savings. It is never wise to purchase a home without considering your savings. After all, you need to have savings for a down payment. In the meantime, you should review your spending per month. Apart from these tips, there are other tips to remember before choosing the first time home buyer programs with low credit scores in Houston, TX. Go through the following tips and make sure you are on the right track.

  1. Build an Emergency Fund

Owning a house is quite expensive. It is even more expensive than renting. Of course, you can live your life with an unparalleled degree of comfort and luxury when it is your own house. However, beware of the maintenance and upkeep costs! When you are buying a new house, you must be debt-free. Along with it, you should have an emergency fund for three to six months as well.

  1. Know how much You can Afford

Before getting emotionally attached to a beautiful house, you should check how much you can afford. In the budget, there must be enough room for the monthly housing costs including taxes, HOA fees, and insurance. The other housing costs might take up 25% of the monthly take-home pay. As the property tax rates and homeowner’s insurances change, you should discuss it with the lender.

  1. Young Customers Deal with Low Credit Scores

A first-time home buyer indeed has less life experience than a person who has already owned a house. You do not have the experience to negotiate the purchase of a new home. In addition to the context, you are not experienced in attending the closing of your dream home alone. The lack of experience might be an issue in finding the loan or getting through the mortgage payments. As you are a first-time homebuyer, you do not have any recent mortgage payment history. Many of the borrowers do not even have credit scores either. So, you should start generating the credit score and you need to have at least one credit account open for a minimum 6 months.

There are other tips to remember if you want to find a first time home buyer program. Get in touch with an experienced lender to seek all your answers.

Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.