Homeownership is a cherished dream for numerous citizens, but the DACA borrowers face hiccups, at the very beginning. Since HUD has not declared DACA as a lawful status, borrowers are deprived of the FHA loans. The FHA loan programs have forgiving guidelines and are suitable for low or average income families. HUD’s announcement did not bar the status holders from applying to any house loans. Moreover, there are several options left.
DACA mortgage loans in Houston can make your lifelong dream since the lenders understand the struggle behind building a house. The mortgage takes care of financing when you are prepared with such a hefty amount. However, there are a few tips to remember while you do your homework. Let’s have a look at the suggestions to follow before applying for a DACA house loan.
Make a Plan
The first and foremost thing to do before applying for the DACA loan is to write down your expenses. Make a list of income and monthly payments. Mention how much you can afford per month and write the number beside every account. If the amount is deducted by an automated-bill system, you need to include it too. Otherwise, you can also make another account and make all of your other accounts current.
Understand the Credit Score Requirement
The private lenders are likely to set the credit score requirements, so you need to understand what they would ask for. Is it going to be 620 or higher? Since you are ineligible for FHA loans, you might face difficulty with your bad credit. If you have 500 credit scores now, work hard to improve it. The FICO score ranges between 300 and 850, and payment history takes up 35%, new credit enquiries take up 10%, and there are other criteria. If your credit score is between 580 and 669, you are still labeled as a risky borrower. For becoming an average risk borrower, your score needs to be between 670 and 739.
Check Errors on the Credit Reports
If you have had prior experience with credit, you are aware of the importance of checking credit reports regularly. After downloading the report, keep looking for the errors closely. Make sure there is no account which does not belong to you. Incorrect or misapplied entries can also pull down your credit further. If there is a mistake, you must report it straight away. As the credit investigation can take up to 45 days, you would not like delays before reaching your goal. However, you will face a red flag when you have debt in collections. If this ranges an extreme level, your mortgage application might be declined. For this reason, pay off the outstanding balances, and settle the payments with your creditors.
The DACA loan will help you achieve your coveted dream, and you should discuss your financial situation with the lender beforehand. In this way, you can understand how much credit score to gain for the loan. Also, the lender can walk you through the process of using a mortgage calculator and figure out how much you can afford.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.