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How to qualify for a home loan

Posted by Mission del Lago on Sep 24, 2015 8:00:00 AM

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If you’re thinking about buying a new home, you're at the start of one of life’s most exciting events. For those whose finances aren’t where they need to be to qualify for a home loan, however, the process can be frustrating. Knowing upfront what it takes to qualify can help potential buyers turn into happy homeowners. 

Credit scores

Credit scores are one of the main criteria financial institutions use for mortgage approvals. A score of 620 is generally the minimum required to qualify for a Federal Housing Administration (FHA) loan. This type of loan is geared toward first-time buyers, and also offers one of the lowest minimum down payments around, at just 3.5 percent. Conventional 30-year, fixed-rate loans that are not FHA will typically require scores in the high 700s.

If you are working with a mortgage professional, they will run your credit and let you know how your scores look. They may also be able to provide you with resources to improve your scores if they are not where they need to be. If you don’t yet have a lender, your Realtor should be able to provide a referral. 

Special, no-cost programs from homebuilders, the DHI Home Buyers Club from DR Horton and Lennar’s Home Buyer Solutions Group (HBSG) can make homeownership possible at masterplanned communities like Mission del Lago. Both programs are geared toward buyers who need help improving their credit and “realizing their financial objectives.”

Down payments

In the approval equation, having a higher credit score may allow you to make a lower down payment. However, the more money you can bring to the table, the lower your monthly payment will be once you purchase your home. A 20 percent down payment is required for many loans. If you don’t have enough funds available to meet that requirement, there are ways to supplement.

The Texas State Affordable Housing Corporation (TSAHC) offers several programs including home loans and down payment assistance programs for everyone from teachers and firefighters to first-time buyers. City and county programs in San Antonio may also be available.  

You can also get a cash gift from family for your down payment, but make sure you know the tax implications, and ask your lender to make sure the loan you want to use allow it.

Other requirements

A bank will typically not approve a home loan for someone who is unemployed. Buyers need to be able to show stable income in order to qualify for a loan. Those who have been employed only for a short time or whose employment history is spotty might also have trouble getting approved—even if your credit score is good and you have ample funds for the down payment. In this case, the bank may require a co-signor for approval. If a couple’s income or employment is not sufficient, additional down payment funds, a lower sales price, or both, may help make a difference.

The pride of the Southside, Mission del Lago offers a range of homes for families, retirees, and veterans. Beautifully designed residences start from just the $150s with square footage spanning from 1,308 to 3,000+.

Located just five minutes from IH-37 and 15 minutes to downtown, the community presents a scenic, serene setting and an abundance of onsite amenities including the Mission del Lago Golf Course.

For more information about the best in Southside living, visit Mission del Lago or click below to view Move-In Ready Homes.

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Topics: buying a new home