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Get all the facts on FHA loans

What are FHA Loans?

Ever heard of them? The FHA loans are normally given by lenders who have been certified and insured with the federal Housing agency corporation.  They usually have the best deals for all those who are considering to buy a house in Texas for the first time. The requirements are easy and it means many borrowers can opt for these loans.  The credit score limit and the down payment is low compared to the conventional loans. Ideally, the down payment of FHA loan usually goes for 3.5%. Once you have all the requirements and conditions that meet with the HUD guidelines, then you are eligible to have your first FHA loan.

The FHA only insures the mortgages that have been approved by the Texas lenders. Among some of the properties that are usually insured include a single owned property, in some cases, they also insure 1-4 unit building in form of condominiums, modular or manufactured homes.   Being the largest insurer in the whole world, FHA prides in having insured close to 34 million properties since it was first established in 1934.

The main difference between the FHA and conventional loans is that they are not so strict, and they usually require a lower down payment for a loan to be processed to the borrower. There is also much flexibility and leniency when it comes to the calculations concerning income – debt ratio.

Are you a first time home buyer?

These loans are handy for all the borrowers that are looking forward to buying a house in Texas. The FHA Texas loans are easily accessible for as long as you have met the most basic requirements that have been earlier stated.  Any other borrower can also qualify for this loan for as long as you are eligible. The credit, income and assets are the three main things that borrowers consider whenever they need to verify of your repayment ‘strength’ for the mortgage property.    

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The down payment aspect

The Texas FHA loans are simply the most sough residential loans. With a down payment of 3.5% it leaves no doubt they are affordable compared to the conventional loans that go up to 5%. In this case, it is even much better for the borrower since a family member has an option to pay for the down payment as a gift fund’. During this process, the member needs to specify to the borrower where to get the funds from, this is usually acceptable for the borrowers who have an ultimate credit score of middle 580.  Those who have a score lower than 580 usually need to start with a down payment of 10%. This is in accordance with the Texas FHA guidelines.

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The credit score

One of the main reasons why the Texas FHA loan is lenient is because of the wide options and advantages it has over the conventional loans.  Once the borrower has a credit score of 580, then he will need to give a down payment of 3.5%. However, if the score is way below to 500, the borrower will be required to make an initial deposit of 10% though the god thing is that he will be eligible for the FHA loan.  Any home buyer who has an exclusive score of 640 has an upper hand in getting the best interest compared to others.

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Debt-to-Income Ratio

In accordance with the Texas FHA guidelines the required ratio should be 31/43%. This means the back end ratio should be more compared to the home loans. The front estimation relates to the housing expense while the back ratio estimates to the amount of income of the borrower.  There are times when such projections can also change depending on the prevailing conditions. For instance the Texas FHA loan specialists can approve to as high as 57% depending on the compensating factors.

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With all these attractive options at hand, there is no doubt that Texas FHA loans are simply the best way to go if you are looking forward to have all your mortgage needs supported. Nowadays, there are many Texas mortgage companies, however when searching for the best mortgage company in Texas, you should be careful and patient too even as you browse for it online.  Some of the main factors you need to consider include the proximity of their services.

It is advisable to work with a company that is within your reach. Get to know how well they have served their clients over the years. This can always be proven by the number of positive reviews you will get from their main website. It is also important to know what your mortgage needs are. Once you are aware of what you need to be insured for, it becomes easier for the FHA insured lenders to advice, support or recommend depending on what you have at hand.  

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Much as there are many mortgage companies in Texas, it does not guarantee in any way that their mode of service delivery is good. Before buying a house in Texas, estimate the value of the whole process and it has to start with the team that you are going to partner with. The mortgage experts should not only be professionals but advisors and friends too, along your journey of acquiring your valued asset.  Take your time and patience to ensure reach the best mortgage company in Texas.

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