If you’re looking to purchase a home for first time home buyers Houston and feel overwhelmed, you’re not alone! The process of buying a house is a complex and nuanced beast, but you can start by breaking it down one step at a time.
Please familiarize yourself with each step of the first time home buyer down payment process, then string them all together and tackle them after you are an expert in each. Simple!
First, start with the down payment. A down payment is a concept used as a catchall for several distinct home buying processes. Still, it would be best if you familiarized yourself with all of your options before you approach a mortgage lender.
Here, you can find all about what a down payment is, your options when making one, and how we can help!
What is a Down Payment for First Time Home Buyer Down Payment Program?
A down payment is a portion of a total sum that buyers submit to secure their purchase without paying the full sum upfront. As a rule of thumb, a down payment for a house is generally twenty percent of the home’s total price.
Nine times out of ten, a down payment is made out of pocket or is financed through a loan that is made to appear out of pocket. Mortgage lenders Houston tends to look down on such sly arrangements, however.
Things like cars, boats, houses, and other similarly large sum purchases will usually ask for a down payment. If they do not require a down payment, then the seller will usually specify “zero down,” which is a common way of indicating that there is no down payment expected where there usually would be.
So, when you are looking at homes, let’s say your budget is in the $200,000 range. A house that costs would usually ask for a $40,000 down payment to secure the home.
You determine how much you would like to put “down” when it comes to down payments. This is good news for some more seasoned or savvy buyers, but first-time homeowners may feel overwhelmed or pressure to keep more cash on hand during the sale.
But these rules are not hard and fast. First-time home buyers have plenty of resources at their disposal to find accessible financing options for homes.
Your mortgage lender should have a bevy of different options for first-time buyers.
Down Payment Options for First Time Home Buyer Down Payment Program
First time home buyers will find a ton of different avenues available to them when securing capital for a down payment. While there are distinct advantages to putting twenty percent down at closing on the deal of a house, we offer programs that allow some home buyers to put as little as three percent down towards purchasing a home.
For some, this difference may seem like a pittance. For first time buyers, however, these savings go a long way! Usually, first time buyers are young families eager to take the plunge in their starter homes. For them, these types of savings can be life-changing.
Sometimes, it is advantageous for buyers to put down even larger amounts than twenty percent of the home’s total purchase price. In cases like these, homeowners are looking to minimize monthly payments, lower interest rates, and lower mortgage insurance costs.
(So many costs involved with buying a home!)
Mortgage insurance is one of those pesky things you do not consider until you have been forced into getting it. Sometimes, a down payment of 20% or more can be enough to assuage the need to purchase insurance.
But what should you do if you are a first-time buyer who not only cannot afford a twenty percent down payment but also can NOT afford a concurrent mortgage payment on top of lower down payment? Is homeownership out of your reach? Not quite!
Future Earning Power
Mortgage lenders Houston will also take into account your future earning power in addition to your realized income. Solid credit history and a good relationship with your lender can make the difference between an impossible sum and a fully realized homeownership!
First Time Home Buyer Down Payment Programs
Some municipalities and cities have first time home buyer down payment programs designed to help residents with a down payment. These usually involve negotiating on your behalf with a mortgage lender or providing you with a lump sum of thousands of dollars in cash to supplement your down payment.
First Time Home Buyer Down Payment Credit Assistance Based Programs
If bad credit inhibits you from buying your first house, consider a loan through the Federal Housing Administration, which can aid low-income buyers, assist with a first time home buyer down payment, and buyers with poor credit.
But be warned: sometimes these programs are not zero down programs for the homebuyers themselves, and you still may be required to put some money–usually below 5%–down for a home.
Do you have questions about the first time home buyer down payment program that weren’t answered in this blog? Contact Rock Mortgage today. If you’re ready to apply for a home mortgage, you can do so online.
What’s The First Time Home Buyer Down Payment Program? | Rock Mortgage — Houston, Texas