Mortgage rates have continued to an all-time low, and this could not have been the best time to purchase a house in Texas. The regular rate for a 30-year fixed-rate conventional loan dropped to 2.88%. Only a year ago, the rate was 3.60%. When you could not imagine the mortgage rate dropping below 3%, 2020 continues to surprise the borrowers. Unfortunately, not every buyer can enjoy the low rates as most of them are reeling from a pandemic. Of course, the process can be easier if you could get help for the down payment.
So, the down payment assistance to purchase homes in Texas are on the rise. Even though credit has been a nagging problem due to the current situation, this program is a blessing. For example, you want to choose an FHA loan but need to pay a 10% down payment. Do not fall for the small down payments because the small down payments can wreak havoc if unprepared. However, many borrowers feel confused and under pressure to make the right call. So, let’s have a look at the benefits of the down payment assistance program in Texas.
Mortgage insurance premium does not become a burden
For your low credit scores, FHA loans are the best bet in the market. Especially, the mortgage has managed to hold a strong place for first-time homebuyers over a few years. From low-cost interest rates to small down payments, the alternative is quite helpful. However, borrowers are never in favor of FHA insurance premiums because they need to pay for a 10% or 3.5% down payment. If you work on your FICO score and get a hold of 600, it’s possible to apply for down payment assistance programs. Hence, FHA loans combined with this special program can alleviate the pain of paying MIP.
Move into a new home sooner
Since down payment remains a dreading subject for the first-time homebuyers, the loan process gets delayed. Past borrowers suggest saving for the down payment as early as possible. However, this does not usually happen! Many of the first-time buyers remain confused until the time of closing. The down payment assistance programs not only help with the down payments but also with the closing costs. Such an alternative is a boon for augmenting buying power and building resources.
Down payment assistance programs safeguard your savings
Do not make the mistake of spending your current savings on the loan even if it is for fulfilling the much-cherished dream of owning a house. Know how much you can afford and do your homework on how the down payment assistance programs save thousands of dollars. Being left with a little amount of savings is not a wise way to purchase the dream house. After all, buying a house is one of the most expensive investments, and you are going to pay for the maintenance as well. So, meticulously calculate before making the final move.
In essence, a down payment program in the form of a forgivable community second loan is a smart way to ease the pressure of home-purchase. Ask the lender whether you can qualify!