If you are applying for a conventional loan in Texas, you probably are aware that down payments typically range between 5% and 20%. But if you are having a difficult time affording a down payment in that range, you may be wondering if it is possible to get your down payment lower.
There are a few things you can do to try and reduce your conventional loan down payment. Following are some recommendations.
1. Apply for the 97% LTV program.
Did you know that it is possible to get a down payment as low as 3% on a conventional loan? You can do this by applying for the 97% LTV program.
You can use this type of mortgage to purchase a variety of different types of single unit principal residences. Note that you can only get a fixed rate through the 97% LTV program. Adjustable rates are not available.
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2. Increase your credit score and decrease your DTI ratio.
The down payment you qualify for is not only determined by the type of mortgage you are applying for, but also your own risk factors. If your risk profile includes a low credit score and/or high debt-to-income (DTI) ratio, that means you are more likely to have a higher down payment (i.e. 10-20%) on your conventional loan.
The lower your debts are in comparison to your income, and the higher your credit score, the less risk you have in your borrower profile.
Lenders are more likely to consider allowing you to put less down on a home with a conventional mortgage (5-10%) if you have this type of competitive risk profile. They have greater trust that you’ll be able to finish paying off the loan.
3. Check into programs to help you afford your down payment.
There are quite a few programs offered by state and local governments geared specifically toward making down payments more affordable for homebuyers.
First-time homebuyers especially will discover that these programs often exist especially for them. Check into whether there are any grants out there to reduce your down payment or closing costs. This may be all you need to bring a home purchase within reach.
4. Work with a Texas mortgage company that strives to overcome obstacles.
You are not the only homebuyer out there who may wonder, “How will I afford my down payment?” If you work with a TX mortgage broker that regularly helps homebuyers to surmount this barrier, you can be assured that you have dedicated professionals on your side will not rest until you are connected with a home loan that you can afford.
We Can Help You Lower Your Down Payment on a Conventional Loan Now
Whatever financial situation you are in, there are options for affording your down payment on a conventional mortgage. We can help you explore those options. To schedule your consultation, please call (346) 708-5626. Let’s get you into your Texas home quickly and affordably.