Options For Austin Home Buyers

It might surprise you that several financing choices are available if you have never bought a property.

When purchasing a new home in Austin, Texas, you have various home loan options, each with advantages and disadvantages. Do a thorough analysis of your financing alternatives as a prospective home buyer. Determining early on which mortgage best suits your needs will make it simpler for you to find the ideal property because the home loan application process can be lengthy.

Mortgage Loan Options In Texas For Home Buyers

You must locate the best mortgage to finance the purchase before starting your search for a new property.

The following are some of the preferred choices for Texas homebuyers:

– Conventional Loans

Mortgages that are not federally guaranteed are referred to as conventional loans. They are divided into conforming and non-conforming categories.

     a) Conforming loans – 

As the name implies, adhere to the credit, debt, and loan size guidelines the Federal Housing Finance Agency (FHFA) set forth. The current conforming loan limitations for 2022 are $647,200 for most of the nation and $970,800 in more expensive locations. 

     b) Non-conforming loans – 

On the other hand, do not follow FHFA guidelines. They can exceed the maximum loan size allowed for a given sector, or they might be made available to borrowers with less-than-perfect credit or those who have suffered significant financial setbacks like bankruptcy.

A conventional mortgage is often the best choice for purchasers with excellent credit who can afford a sizeable down payment.

– Jumbo Loans 

One category of non-conforming loans is jumbo loans. They are well-titled because these mortgages are utilized to pay for more expensive properties than those allowed by the FHFA. Homes cost more on average in places like Los Angeles, San Francisco, New York City, and Hawaii, where jumbo loans are popular.

If you need to borrow money that exceeds the most recent conforming loan limits, a jumbo loan can be your best option. But keep in mind that the requirements for these loans are often stricter and require more thorough paperwork. Jumbo loans demand better FICO scores, larger down payments, and lower DTI ratios than most traditional loans.

– Federally Insured & Guaranteed Mortgages

Although the US government does not provide money for mortgages, it offers several options for more people to own homes.

      a) FHA Loans

These government-insured mortgages are designed to make homeownership accessible to those who lack the substantial down payment or excellent credit needed for most conventional loans. For borrowers with a FICO score of at least 580, FHA loans offer a maximum financing rate of 96.5 percent with a 3.5 percent down payment. Although there are some limits, those with credit scores between 500 and 579 may still be eligible for an FHA loan with a 10% down payment.

     b) USDA Loans

Borrowers with low-to-moderate income may use USDA-guaranteed home loans to buy a home in a rural location. You must purchase a home in a USDA-qualified area and satisfy specific income standards to be eligible. A USDA-guaranteed home loan is available to qualified borrowers with no down payment.

      c) VA Loans

FHA and USDA-Guaranteed home loans are ideal options for those who cannot obtain a conventional loan due to a poor credit score or a lack of down payment resources. Because of its excellent mortgage terms, VA loans are only available to military personnel, veterans, and spouses. The VA home loan program offers eligible servicemen and women 100% financing.

If you’re looking to buy a fixer-upper, you might want to look into the FHA 203k loan or other Texas home improvement financing options.

One-Step Closer To Your Dream House

Even though these choices might seem difficult initially, you don’t have to sort them out alone. Your Capital Home Mortgage loan expert would be happy to discuss the differences with you in-depth and give recommendations for solutions that make the most sense for you.

You can rely on our home loan specialists to assist you in finding a mortgage that satisfies your needs in terms of money and lifestyle. Whether you are a first-time buyer or a seasoned homeowner, we have options that suit you.

Are you looking to purchase a brand-new house in Austin? Prequalify right away with Capital Home Mortgage! Call us at (512) 237-7400 to get started on your path to homeownership.