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Check this PPT to learn about the common home loan options available in Texas.
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Many people depend on home loans for securing their dream home in Texas or other American states. As there are more than a few home loans in Texas, it can be confusing to find the best loan that offers a lucrative rate of interest and does not burn a hole into your pocket. The PPT discusses the four most sought after home loans in Texas that offer the best home loan rates in Texas. Let’s take a look.
1. FHA Originally introduced during the 1930s during the Great Depression, the FHA loan program aims to assist people in buying homes who fall under the limited income bracket. FHA loans are guaranteed by the United States Federal Housing Administration and can be obtained by anybody and not just first time home buyers. Only lenders approved by the FHA can offer loans under this program, to protect the interests of the borrowers. FHA loan comes with a pre-insurance scheme to cover up for any borrower defaults; however, the borrower needs to bear the premium that reflects as a higher monthly installment.
2. VA VA loans are offered by the US Department of Veteran Affairs to help military service personnels and their families secure a home. Similar to FHA, only pre-verified lenders may take part in the program. Unlike FHA, veterans are not required to pay an up front down payment to avail a loan under the VA scheme. In most cases, the federal government charges a funding fee that can be up to 3.15 percent of the total loan amount. Approving a VA loan requires a veteran to meet the guidelines laid by the federal government, but this loan is a lucrative option to receive 100 percent financing to buy a home. The maximum sanctioned amount; however, cannot exceed the maximum limit of $625,500.
3. USDA USDA loans are offered by the United States Department of Agriculture and are meant for rural borrowers who meet certain income criteria. This loan program caters to the needs of rural borrowers who have a moderate income, but are still unable to self-sponsor their home. For availing a USDA loan, the intended property should fall under any of the “rural areas” in the US and not otherwise. To qualify for an USDA loan, the applicant’s income shouldn’t exceed 115 person the median income in the area. Moreover, there is also a capping to the maximum loan entitlement amount to discourage wealthy people from the program. All USDA loans require a zero down payment; however, the repayment period is restricted to 30 years.
4. First Time Homebuyer Mortgage The First Time Homebuyer Mortgage, commonly known as the Texas Mortgage program is a lucrative loan option for first time homebuyers in Texas. The income requirements in this program vary depending on the location of the property. Similar to Texas Mortgage program, borrowers can get a loan under another program called Texas First Time homebuyer program to buy a property within Texas. This program is beneficial for those homebuyers who can afford a partial down payment, if not full. Both the programs offer competitive interest rates and necessary help on closing costs that comes out to be approximately 5 percent of the total loan amount.
The Bottom Line Most first time homebuyers go for conventional loans and end up paying higher than required home loan rates in Texas. Applying for any of the loans mentioned in the PPT, helps borrowers save the additional interest they pay when they obtain conventional loans. These loans are pre-insured to cover defaults by borrowers and are backed by respective federal government bodies, they have lower interest rates. Before you apply for any home loan in Texas, it is advisable to consult an expert who can guide you about suitable home loans options after analyzing your monthly income, repaying capability and other required factors.
