People wish to buy a beautiful home in the city of Texas, but houses cost a lot of money and not easy to purchase without significant financial resources. The first time homebuyers feel the most stress and difficulty as they are not familiar with the correct steps needed to buy a home, particularly when they have to obtain affordable home loans offered in homebuyer assistance programs.
The first time homebuyers have moderate income and mostly rely on government backed loans such as the Federal Housing Administration (FHA) loans, which have the most lenient loan criteria of all the mortgage loans. The FHA loan requirements Houston are considered the best due to its affordability and acceptance for people who have low credit scores and cannot pay big down payments. The reason why many aspiring homebuyers chose FHA loans is that most get disqualified for conventional loans because of either poor or bad credit score or having a moderate salary. The credit scores are categorized by FICO and show the exact financial position of a person and whether he will be able to repay the loans on time or not. The FICO credit scores are classified as
- 800 to 850- Excellent score
- 740 to 799- Very Good score
- 670 to 739- Good score
- 669 to 580- Poor score
- 300 to 579- Bad score
The FHA loan requirements Houston allow first time homebuyers with either a poor or bad credit score to still be able to become homeowners. The FHA loans are given by approved FHA lenders and require a 3.5% down payment from a homebuyer with a poor score of 580 or above, and a 10% down payment from a homebuyer with a bad credit score from 500-579. The FHA lenders even provide the loans if the homebuyer has a high debt ratio of 50%, whereas the common acceptance is 43% in ordinary home loans.
The FHA loan requirements Houston allow a homebuyer to own a Texas home and get either a 15 year or 30 year loan term. The interest rates of FHA loans are also one or two points less than other mortgage loans. The other requirements of the FHA loans are homebuyer having stable employment, a high monthly income, no outstanding debt to pay, and low debt to income ratio.