Pre-conceived notions are deadly when you are preparing for a mortgage. Without proper investigation, you cannot ace the loan application. Especially many people have wild ideas about the down payment assistance programs. For instance, some of them think the program is only for first-time buyers. In reality, this is not true. The assistance program is not difficult to quality, either. When the myths and misconceptions make rounds, it becomes more difficult to find out what is true or false.
The number of buyers showing interest to purchase properties is gradually growing. The income and credit qualifications have loosened up. Moreover, down payment is not an obstacle anymore. It is true that home prices and down payments are steadily growing. In this context, the down payment assistance program is a benefit to all. The down payment assistance to purchase homes in Texas have the way to increase a homebuyer’s purchasing power. Through this option, homeowners can save for a solid amount. The cash reserve will help them to pay down for home improvements with ease. Even though there are no home improvements, moving costs and other expenses can burn your pocket.
This article dispels the most common myths and misconceptions about the down payment assistance program in Texas.
Myth #1: DPA doesn’t work for low-cost homes
As many borrowers focus on the word “assistance”, they often think the program is valid for a certain neighborhood. They also develop a misconception that an inexpensive home is not eligible for the program. Check whether your neighborhood goes over the sales price limit between $200,000 and $700,000 in the expensive markets. Around 70% of properties pass the eligibility requirements of the programs.
Myth #2: Down payment programs are not funded anymore
On the very contrary, various private- and government-funded programs are still in the market. Millions of dollars are still in the DPAs, and buyers can get hold of cost-effective fixed-rate loans and tax credits. Every program comes with a funding schedule. The programs are generally offered through municipal or local state agencies. Moreover, employers can sponsor private-funded programs. Each state comes with a set of programs and you can find local assistance with proper research.
Myth #3: DPA can work with FHA loans only
FHA mortgages are a common loan product to use with down payment assistance. Now, this does not prove you cannot apply for another mortgage. FHA is a popular option because it has flexible down payment options. Down payment assistance programs are applicable for USDA, conventional, and VA loans, too. As a buyer, you should look at the market and see the options you have in hand. Remember, you will have to pass the down payment assistance program requirements. For example, the minimum credit benchmark is 620 for an FHA loan.
In essence, down payment assistance is a widely helpful option for every buyer. When you are wondering whether you can also qualify, talk to your private lender. See your options and get started.