Consider these 5 important things before applying for FHA home loans in Texas
If you are a resident of Texas, and you are looking for buying a home, the Federal Housing Administration (FHA) which is a part of Housing and Urban Development (HUD) that has made available some provisions for not only First-time home buyers but senior citizens and mobile home owners as well. This branch of government has insured the loans so that the lenders can offer comparatively better rates on mortgage financing. The FHA loan assistance programs in Texas also comes with some great options for the people who need extra financial help of low down payment, low closing costs and easier credit qualifications and eligibility criteria.
There are basically five most important things you should consider before applying for FHA home loans in Texas. They are as follows:
1. Low Down Payments in FHA home loans in Texas
Unlike VA mortgage loans in Texas, the FHA requires a down payment of at least 3.5 %. This is comparatively much less than the conventional mortgages, which might require down payment ranging from 5 % to 20%.
The large down payments of conventional loans make them unattainable for many would-be buyers. That is the reason why FHA loans in Texas are much preferred by the home-buyers.
2. FHA Loan in Texas
Since more than eighty years, The FHA and its loans have helped over 34 million people in the USA to become homeowners. The mortgage insurance program of FHA allows the loan lenders to ease their eligibility requirements and make homeownership easily accessible for the people in the neighborhood across the country, especially in Texas.
Unlike VA home loans in Texas, the FHA’s loan insurance allows the lenders to know that they’ll be paid back if a borrower defaults. That effectively reduces their risk, at the same time, enables them to lend the housing loan more liberally.
Here are some conditions that need to be considered and fulfilled so as to avail the housing mortgage which would help to answer some of your questions about the eligibility for a borrower to have an FHA purchase loan.
3. Eligibility Overview for FHA Loans in Texas
To avail the facility of borrowing FHA loan in Texas, the borrower must actually intend to occupy the home. So, the rentals or people applying for the mortgage for second homes generally don’t qualify. Other requirements include the condition that the home must be a 1 to 4 unit property.
These are the basic eligibility criteria which you would be required to fulfill, but certain other conditions that make you eligible for availing the loan are:
- You are required to have a down payment of at least 3.5 %.
- You are needed to qualify for the financing on the balance of the purchase price of the house.
- You should be able to sustain the monthly payments which include the FHA loan insurance premium.
- You are also required to have a steady employment history.
- You are required to have established a clean credit history
- The property should be appraised by the FHA-approved appraiser
4. The Property Types that allow you to avail FHA loans
Many property types are eligible for FHA mortgage loans; however, you are required to shift in within 60 days. There are various property types which make you eligible for the FHA loans as follows:
- Single-family homes
- Multi-unit properties
- Manufactured homes
5. The Required Documents which would fulfill the eligibility criteria
The documents which would make you avail the facility of borrowing FHA loan before buying a house are:
- Evidence of residence for the past two years
- Gross monthly income at current employer
- History of past two years of employment
- Social Security card
- Bank account information
- Information on any other owned real estate
- Information on all active loans
- Approximate value of all the personal property owned by the borrower
- Current paycheck stubs
- Past two years of W-2 forms
- Past two years of personal tax returns