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First Time Home Buyers FHA Question

by Anonymous
(Texas )

My husband and I would like to buy our first house but we don't know where to begin. Currently we are staying with family but would very much like to be on our own. We don't have money saved for down payments or closing costs. We recently moved from Florida to Texas for better job opportunities. My husband now works for the department of homeland security as a TSA officer. I work as a tech at an animal clinic, though just part time around his hours so someone is always home for our child. We really don't know where to begin, what kind of loans to look for or programs. Just looking for any advice. Also our credit is excellent. 750+ for both of us.

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First Time Home Buyer - Where To Begin
by: Jeffrey

Hello there anonymous in Texas;

Thank you for writing in and asking your questions.

So you're a first time home buyer and do not know where to begin. Just relax, I'll trying to guide you.

Buying a house is kind of like sitting on a 3 legged stool. Leg number one is credit. Since you mention you both have 750 credit scores, it appears you have that part of the home buying process covered.

To have scores like that, you have managed your credit well in recent years. Congratulations, this is where many first time home buyers fall short. They have to do credit repair before they can buy a home.

Now the second leg of this mortgage process is DTI ratio or what is called debt to income. You have to be sure and understand how this ratio works.

Basically for FHA home loans, the maximum DTI ratio is 31/43. What this means is that 31% of you and your husbands combined gross income would be the maximum for housing expenses. Then 43% of your combined monthly income would be allowed for all expenses including your housing, credit cards, auto loans etc.

So to do the math and give you an example, let's say that both your income and your husbands gross wages total $4000 a month. You could use this mortgage qualification calculator to help figure how much house you can afford. Just remember enter the 31% maximum mortgage payment to income ratio and 43% for your maximum debt payments to income ratio.

Now for the third leg, the down payment. You say that you do not have any down payment money saved up. Well, that could be a problem. You see FHA loans require a 3.5% down payment.

The good news is, because you have great credit scores, you can use seller concessions and grant money. Up to 6% of the purchase of the home can be allowed for helping you with the down payment and closing costs. Even those with lower scores can use seller concessions, although it may not be as much.

Feel free to visit this page to find help for Texas grants for down payment. The cool thing is Texas announced recently that have grant money available as of 2015 that works with FHA loans. For some time they did not offer grants.

So there you have it, all three legs of the mortgage stool are covered. I hope you find this helpful.

Please share my website on social media and help pay it forward for other Texans looking to buy a home.

Congratulations!
by: Anonymous

On taking the first step towards owning your own home. Working with a wonderful lender makes everything better. They will be able to assist you in determining the best loan program for your needs. I see that the question is for an FHA loan - but wondering perhaps if one of you are veterans and would be eligible for a VA loan. If so, you will want to discuss that with your lender also.

Also - there are some programs for law enforcement officers, if your husband qualifies - where you can get a HUD home for 1/2 price. Here is the link for that program:

Visit HUD Good Neighbor Program details here.

Another very important resource is your realtor. You want someone that will ensure that your needs are met and to represent you throughout the process. Many times you will find a great referral from a family member or friend and you want someone that takes amazing care of you and puts your needs first. If you don't have someone like that, I would love to refer you to someone.

Here is a link to some useful information to assist you as you begin this exciting adventure: Contact Blackmon Homes for more details.

Please feel free to contact me if I can be of any assistance and congratulations again!



home
by: Anonymous

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Liza

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