Let’s admit it, we all have different needs and preferences when it comes to home financing. Some of us want to keep our monthly mortgage payments low, while others do not want to pay a hefty sum in the name of a down payment.
Did you know there are different types of specialty loans available in the market that are designed according to the needs and profession of a borrower?
Thus before you head over to a Dallas mortgage company to help you finance or refinance your home, it is essential to learn about various types of specialty loans that you must consider opting for, too, if you are eligible.
Let’s take a look at them in detail:
Specialty loans for first-time home buyers
There are different specialty loans available for all first-time home buyers in Dallas, including:
- ReadyBuyer
The HomePath Ready Buyer program is specially designed for first-time home buyers, as this program provides up to 3% assistance for closing costs. Individuals will have to complete a home-buying education course to make an offer.
- Individual Retirement Accounts (IRAs)
First-time home buyers can take out $10,000 from a traditional individual retirement account (IRA) without having to pay the 10% penalty, which is applied for withdrawing earlier than the specified time period.
- Down Payment Assistance Programs
This type of program is mainly for low-income first-time home buyers, as well as public servants. The eligibility criteria for Down Payment Assistance Programs will vary according to where you actually reside.
Give back program
The Give Back Program is aimed at all the veterans, cancer-survivors first responders, and the people who help keep us safe.
So, in a way to support these heroes, the Give Back Program makes financing a home much easier and more affordable. This way, the cost of owning and purchasing a home will not be expensive anymore.
The Give Back Program helps such individuals to get loans at far discounted closing costs, priority loan processing in which customer loans do not wait in line and can enjoy faster turn times, as well as real estate agent fees.
The Give Back Program includes many loans to benefit such individuals, including first responder loans, Veteran home loans, and cancer survivor loans, to name a few.
Whether you’re financing or investing in a new property, such loans will help such heroes to achieve their dreams of having home ownership come true.
Educator mortgage programs
Educator mortgage programs are aimed at teachers to help them afford their own homes.
Educator mortgage programs are designed especially for teachers in the education sector. They can enjoy various discounts and lower fees when it comes to purchasing and owning their own homes. In short, every individual in the education industry is eligible for the Educator mortgage programs.
Teachers can benefit from Educator mortgage programs through discounted and lower fees, lower down payments, and closing cost assistance, according to US News . Plus, teachers with a credit score of 580 or higher can also easily qualify for an FHA loan. The best part is that even if an educator has a credit score below 500, some lenders will be willing to lend them the loan.
Regarding the down payment, educator home buyers can put down only 3.5% for a down payment. And educators may also have to pay less upfront.
FHA 203k rehab loans purchase and renovation loans
203k FHA loan is a loan that is used for updating, modernizing, or renovating your home, according to Business Insider. This loan includes the funds that are needed to cover the cost of renovation, along with the cost of the home itself too. In simple words, 203k is a loan with the renovation feature.
The benefit? You get to borrow money based on your home’s future value. This way, you can quickly amortize the cost of the repairs and upgrades into your investment. Apart from this, you will also be able to release funds to the construction team that is renovating your home whenever specific tasks have been completed or milestones are achieved.
As far as the down payment is concerned, only a down payment of 3.5% will be required for purchases. How much loan you can borrow will depend on the appraised value of your home, including all the renovations.
Another benefit of an FHA 203k loan is that you can easily combine the renovation costs and the first mortgage with either adjustable or fixed rates. As far as the repairs are concerned, all will be completed after closing this FHA loan.
A 203k loan is a great option when you want to refinance a home or renovate it. A 203k loan is also the best option for you when you purchase a fixer-upper and then use the additional loans to increase its value.
FHA 203k rehab loans
An FHA 203k rehab loan is a loan that is aimed to help home buyers to purchase as well as refinance their homes with renovation in one mortgage. This loan by FHA is also commonly known as a renovation loan.
The benefit of an FHA 203k rehab loan is that a homebuyer will not be required to apply for numerous loans at once.
A homebuyer can easily purchase, renovate, or refinance their own home with a single loan without needing a good credit score, large down payments, or even high-interest rates.
Home buyers can easily enjoy a great interest rate, as well as a down payment of as little as 3.5%. With just one loan, you will be all sorted out.
Rehab loans are designed to help homeowners improve their existing homes or help them buy a new home that can benefit from upgrades or any sorts of home improvements with their own styling and needs. This is also a great way to create your home equity much faster by bringing your home up to date.
However, to qualify for an FHA 203k rehab loan, specific requirements must be met according to the HUD (Department of Housing and Urban Development), such as:
● Look for a property that will need to undergo repairing and renovating
● Having a qualified lender
● Having the minimum credit scores
● Having your proof of income
● Having specific debt-to-income ratios
Wrap up
There you have it – Some of the most common types of specialty loans available for home buyers in Dallas, Texas. Just ensure you research these options a bit or get in touch with your mortgage company to know the ins and outs of each option available. This will help you choose the right specialty loan for yourself.