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The reasons why first time homebuyers take help from FHA lenders for bad credit in Houston

Buying and owning a home in the beautiful city of Houston is like a dream come true for most aspiring homebuyers. But houses are quite expensive and buying them is never easy. The first time homebuyers, in particular, have to go through a stressful time as they are not familiar with buying a home with the help of mortgage loans. The first time homebuyers are mostly newly married couples who have moderate income and less than perfect credit score, which makes them rely on government backed loans instead of conventional loans offered by banks.

The Federal Housing Administration (FHA) loans are the best home loans with the most lenient requirements, which helps both the first time homebuyers and existing homeowners. The government directly does not issue the loans but merely guarantees them. The FHA loans are given by FHA lenders who are approved by the government. The FHA lenders for bad credit in Houston makes it possible for homebuyers who fail to get conventional loans to be still able to obtain the home loans. Credit scores are a decisive factor in all types of mortgage and an effective tool for lenders to determine the creditworthiness and ability of the borrower (homebuyer) to make timely mortgage repayments or not. The credit scores are classified from 300 to 850 by FICO (Fair Isaac Corporation). The categories of credit scores are given as

  • Excellent score- 800 to 850
  • Very Good score- 740 to 799
  • Good score- 670 to 739
  • Poor score- 580 to 669
  • Bad score- 579 to 300

The banks and private lenders consider bad credit a major risk as to the homebuyer as already missed debt payments for several months and would likely default any new loan given to him. The FHA lenders for bad credit in Houston help aspiring homebuyers to fulfill their wish of buying and owning a Texas home. The FHA loans have simple and easy loan criteria, which makes it affordable for homebuyers struggling with financial constraints such as bad credit scores and high debt to income ratios.

The FHA lenders for bad credit in Houston would ask only 10% down payment and allow the potential homebuyers with bad credit score (579- 500) to obtain the loans. The FHA loans offer low down payments and low interest options which are not offered by any other conventional home loans. The FHA lenders, however, carefully analyze the monthly income, debt to income ratio, and recent debt payments of the homebuyer to ensure that he would be able to make the monthly mortgage payments.

 

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