Waco Home Purchase Loans

Purchasing a new home is always exciting, whether you’re buying your primary residence, 2nd home, or investment property. But before you can start house hunting, you must determine how you will pay for the property first. Like most Americans, you’ll probably need a home loan to finance the purchase.

Are you a first-time homebuyer? You may be pleasantly surprised to discover numerous home loan options. The mortgage specialists at Capital Home Mortgage will be happy to educate you about the mortgage process and help you find a home loan product that makes sense for you.

Your Home Loan Options in Waco, TX

Find out which mortgage option works for your financial needs and goals. Here are some of the most popular home loans among Texas homebuyers:

1. Conventional Loans – 

These are mortgages that the government does not guarantee. Instead, private lenders such as banks and credit unions fund them entirely. Conventional mortgages are among the most versatile options, as the loan proceeds can be used to purchase your primary or secondary residence. 

Conventional loan qualification guidelines frequently require borrowers to have high credit scores (620 or higher), low debt-to-income ratios, and a down payment of at least 20% to avoid paying private mortgage insurance. 

2. Jumbo Loans – 

Jumbo home loans are conventional loans that fall outside the FHFA limits. They are mainly used to purchase expansive or luxury homes well beyond the area’s conforming loan limits. But because jumbo loans require more money and are not guaranteed by government-sponsored entities, they are riskier for lenders.

To mitigate the risk, jumbo loans are often offered with much more stringent qualifications – good income, high credit score, and a DTI lower than 36% of your monthly income.

 3. Government-Insured Loans –

Government-sponsored entities guarantee mortgages. These loans usually have more relaxed qualification requirements than conventional ones, designed to make homeownership accessible to a broader range of first-time buyers. 

The following are the most well-known government-insured mortgages:

     – FHA Loans – The Federal Housing Administration insures FHA home loans. They offer home loans at a 3.5% down payment for borrowers with a credit score of 580 or higher. If your credit score is lower (500-579), you’ll need to increase your down payment to 10%.

     – VA Home Loans – VA loans are exclusive for active duty or retired members of the United States Armed Forces or a qualified family member of one. VA loans do not require a downpayment, are not subject to PMI and are guaranteed by the US Department of Veterans Affairs.

     – USDA Guaranteed Loan – USDA home loans, backed by the United States Department of Agriculture, assist low- to moderate-income homebuyers purchase homes in designated rural and suburban areas.

Home Loan for Fixer-Upper Homes

Consider an FHA 203(k) loan if you want to buy a fixer-upper. A 203(k) loan allows you to take out one loan to cover both the purchase of the home and the necessary improvements.

Apply For a Home Purchase Loan in Waco

Now that we have the basics covered, it’s time to do a little research and evaluate which options suit you best.

If you’re looking to purchase a home in Waco, a wise next step is to meet with a professional loan expert from Capital Home Mortgage to discuss your finances and home-buying goals. We’ll work with you every step and help you find a home loan perfect for your needs.