Lake Charles, LA – First Time Home Buyer
Lake Charles, LA – First Time Home Buyer Loans
Below are some mortgage programs that are available to first time home buyers.
Types of Mortgages:
- Conventional Loans – Conventional loans offer the best loan terms to borrowers with good or excellent credit, as well as those who can afford to place a larger down payment. If you are able to put 20% or more down, you will be able to avoid paying private mortgage insurance (PMI). However, conventional loans also offer low down payment options, such as programs that only require 3% down.
- FHA Loans – FHA loans are a good option for borrowers who may not be able to qualify for a conventional loan. The qualification requirements for FHA loans are much more lenient than conventional loans. This includes options for home buyers with credit scores as low as 500 (in order to qualify for a 3.5% down payment, you must have a credit score of at least 580).
- USDA Loans – USDA loans provide home buyers the opportunity to purchase a rural home without any down payment. These loans are intended for borrowers with low-to-moderate income. In addition to not requiring any money down, you can also finance the closing costs into the loan. This means you can essentially buy a home with no money out of pocket!
- VA Loans – Active duty military members and veterans can apply for a VA loan which allows you to buy your first home without any down payment. These loans are not available to the general public, but exclusively to military/veterans.
- Jumbo Loans – Any mortgage that does not meet the conforming loan limits is a jumbo loan. You can lookup the 2023 conforming loan limits for Calcasieu Parish, Louisiana (or any other county) using this conforming loan limits calculator. If you want to buy a more expensive home, and have the income to qualify, jumbo lenders offer loan amounts up to $5,000,000.
- Non-Prime Loans – If you do not qualify for any of the above types of loans, you may consider a non-prime or non-qm loan. These programs are especially helpful to self-employed borrowers, and a variety of people with credit issues (such as low credit scores and/or a recent bankruptcy, foreclosure, or short sale). Regardless of your situation, you may want to learn more about non-prime loans if you do not qualify for any of the other types of mortgages featured above.
These are some of the mortgage options that are available to first time home buyers.
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Upon receiving your request, we will match you with a mortgage lender that offers first time home buyer loans in Louisiana. You will be provided with a free consultation, and the opportunity to get pre-approved for a mortgage.
Lake Charles, Louisiana – Down Payment Assistance Programs
First time home buyers in Lake Charles may be eligible to receive down payment assistance. You can learn more about some down payment assistance programs being offered in Lake Charles below.
City of Lake Charles – Down Payment and Closing Cost Assistance Program
The City of Lake Charles offers up to $10,000 in down payment assistance. The funds are provided in the form of a forgivable second mortgage complete with zero percent interest for a period of five years. Over this time span, the amount due depreciates until it is fully forgiven.
Requirements
- All families that apply cannot have a combined annual household income over 80% of the area’s median income. Currently, this is based off of the US Department of Housing and Urban Development’s (HUD) income figures from 2009. This total also changes based on the number of people within the household. For instance, a family of one can make a maximum of $30,450 while a family of six can earn $50,450. These figures are subject to change.
- Families must be first time homebuyers as defined by HUD. This means that members cannot have owned a home in the past three years unless the person is a displaced homeowner.
- For the program’s period of five years, the property must be lived in as the main residence. Should it be sold, the amount supplied will then be due immediately.
- Prior to receiving down payment assistance, the family must obtain a first mortgage from a qualified lender. Its interest rate can be no more than three points higher than the market’s current rate as determined by the lender.
- The monthly bill cannot be more than 35% of the family’s monthly income.
- Eligible applicants are not allowed to have more than $5,000 in savings or other form. Should they have more, all the additional money is required to go toward closing costs.
- All participants are required to attend a homebuyer education course and receive a certificate of completion.
- As it is a local program, the property in question must be located within Lake Charles’ city limits.
- The property’s sale price cannot exceed the area’s mortgage limits. In addition, only single family residences will be covered.
- An appraisal must be held to verify the unit has enough living and sleeping space for the family in order to deter overcrowding. This is based on the number of family members. For example, families of two to four individuals must have a home with at least two bedrooms.
- Buyers are to be provided with the “Protect Your Family From Lead in Your Home” pamphlet to underline the dangers of lead based paint.
Process
Once all of the documents requested are turned in, the Lake Charles Community Development Division begins processing the information in a series of six stages.
- The first is to simply ensure that all information is complete and correct.
- Following this, the property is evaluated and inspected to assess both the site and property. Should it be located adjacent to any form of hazard, such as a flood plain, the buyer will be notified and eligibility will be forfeit until all concerns have been properly addressed.
- Next, the living space is measured to determine sufficiency.
- A purchaser and realtor appointment is scheduled.
- The mortgage and title company are notified of the impending purchase.
- All legal documents are prepared for loan closing in relation to the financial assistance provided by Lake Charles.
You can learn more about the Down Payment and Closing Cost Assistance Program on the City of Lake Charles website.
Are You Eligible for Down Payment Assistance?
A mortgage specialist can help you check your eligibility for down payment assistance. If you would like to receive some help checking what down payment assistance programs you may be eligible for, fill out this form. We will match you with a mortgage lender that can help you see if you qualify for any down payment assistance.
First Time Home Buyer Questions
Below are some of the most frequently asked questions about first time home buyer loans:
How much do I need for a down payment?
The minimum down payment requirement will depend on the type of mortgage program. USDA and VA loans do not require any down payment. FHA loans only require a 3.5% down payment (and allow down payment assistance to be used). Conventional loans typically require either 3% or 5% down. The minimum down payment for a non-prime loan is usually at least 10% (or higher).
What is the maximum loan amount that I can qualify for?
The amount that you will be allowed to borrow will depend mostly on your income, as well as the particular type of loan you are interested in. There are maximum loan limits for each type of mortgage program which are set at the county level. Conforming loan limits are the maximum loan amounts allowed for conventional mortgages. FHA loans have their own loan limits. This is not necessarily how much you can borrow though, but the maximum amount allowed in your location. The amount that you can personal qualify for will be based upon your income, and how much debt you have. For most loans, your monthly mortgage payment, along with your monthly debts may not exceed 43% of your income.
Can I buy a home without a real estate agent?
It depends on your state and the type of loan program. For some states, you must use an agent. In other states, you are not required to use a real estate agent for many loan program, such as conventional mortgages. However, some loan types require that you use a real estate agent regardless of your location, such as USDA loans.
Are there mortgage loan options for borrowers with bad credit?
Yes, both FHA loans and non-prime loans are available to borrowers with lower credit score, and other credit challenges. The minimum credit score required for an FHA loan is 500. For non-prime loans, there are lenders that allow a borrower to have a credit score even below 500. Non-prime loans also do not have any waiting periods after a bankruptcy.
Can I buy a home if I owe tax debt?
For government-backed loans, such as FHA, VA, and USDA loans, you can buy a home with tax debt as long as you have made a payment plan with the IRS, and are not behind on the payments. Any federal debt must be in good standing in order to get a government-based mortgage. If your tax debts have moved into the status of a tax lien, this will prevent you from getting a home loan until it is resolved.
Can I buy a home if I have student loans?
As long as you are not delinquent on the student loan payments, and the monthly payments do not cause excessive debt-to-income ratios, you can still get a mortgage.
Can I buy a home without my spouse?
A common question is if you can buy a house without your wife or husband. The short answer is yes. There are numerous reasons someone may want to exclude their spouse from a mortgage application, such as lower credit, lack of job history or income, or one spouse having excessive debt that could prevent an approval. You may be able to qualify and get a home loan without your spouse.
How do I find out if I qualify for a mortgage?
A loan representative can help you determine what mortgage programs you may qualify for, and also check your eligibility for down payment assistance. If you would like to receive a free consultation, we can help match you with a mortgage lender that offers first time home buyer loans in Louisiana.