Texas home loans are in
high demand as interest rates are dropping and housing inventory is increasing.
A mortgage broker can help you choose the best loan for your financial
situation and make your homeownership dreams come true.
The real estate market in Texas is booming. With gorgeous spring
temperatures, and plenty of ways to beat the summer heat, it is easy to see
why. Texas has a lot to offer to individuals and families. Whether you are
moving to the Loan Star State for work, the weather, or for all the family
friendly activities and destinations, there is something in Texas for
If you have bad credit, you may think that a move into or around
Texas is impossible. You may think that Texas home loans
for bad credit don’t exist. This has been a widespread and false
rumor since the housing crisis of 2008. Many people believe that it is
impossible to get a home loan without perfect credit. In a way, this has become
a self-fulfilling prophesy because many individuals and families with bad
credit won’t even apply for a loan for fear they will just be turned down by
the bank. However, there are many programs in Texas that can help sub-prime
borrowers meet eligibility requirements for home loans.
Types of Texas Home Loans
The most common type of Texas home loans
is a traditional mortgage. Most people with bad credit
automatically assume they cannot qualify for this type of loan. While a
traditional mortgage does have the most stringent credit requirements, they are
not as high as many people believe. If you have a score of at least 650 you
have a chance to qualify for a traditional loan. A traditional loan is a fixed
15 to 30 year loan with payments that will remain roughly the same for the
entire loan term. Payments may fluctuate slightly based on property tax amounts
but they principal and interest will remain the same. In order to qualify for a
traditional loan you will need to put between 5 and 20 percent of the loan
If your credit score is less than 650, you can still find Texas home loan
that you can qualify
for. One of the main types of loans that can help sub-prime borrowers is an FHA
loan. An FHA loan is a loan that is secured by the federal government. You will
pay a fixed rate for principal and interest for a 15 to 30 year loan term. You
will also pay mortgage insurance in the amount of 80 to 200 dollars each month,
depending on the amount of your loan. You can qualify for an FHA loan with a
credit score as low as 500 as long as you have between 3.5 and 10 percent of the
loan value to put down.
If you find that you cannot qualify for a traditional loan or an FHA
loan, there are some less common programs that may be able to help you buy a
home in Texas. One is a rent to own program. When you rent to own, you pay
rent that for the first 18-24 months goes towards making a down payment on the
home. Your rent payments will be higher than if you were just renting the home
but you will be making progress towards owning it. Another way to purchase a
home with bad credit is with seller financing. This is most common if the
seller owns the home outright or owes a very small amount left on the mortgage.
The seller carries the debt for you and you make monthly payments, including
interest to the seller. Often you will need to put a large chunk down so that
they seller is assured that you have a vested interest in paying the loan in
full by the agreed upon time period. Finally, you may also want to have a
family member with higher credit cosign for you. This will help you get a loan
and be on track to rebuilding your credit. However, be aware that any late
payments will also affect the credit of your cosigner.
Regardless of which loan product you
choose, a Texas mortgage broker can help you reap the benefits of Texas home loans.
An aggressive broker is key when securing a home loan with bad credit.
A licensed broker can negotiate with various lenders to help get them to see
you as more than a credit score. In fact, many people who have gotten home
loans with bad credit claim that they owe their success to a broker who was
working for them. Call a broker today to start the process of owning your own
home. You will be glad you did.
NMLS 1057378 | AZMB 0923961 | MLO 1057378
23335 N 18th Drive Suite 120
Phoenix AZ 85027