OnPath Credit Union

Are you tired of ever-increasing rental rates in New Orleans? Do you want a home you can change and modify as you see fit? When given the choice, many renters would love to buy a home. Unfortunately, the hurdle of securing a mortgage often seems overwhelming. At OnPath Federal Credit Union, we take pride in helping first-time homebuyers find and get approved for home loans.

Many first-time homebuyers start out assuming the hurdles are too high to overcome, only to discover homeownership is within reach after speaking with our mortgage experts. Give us a call, even if you don’t think you can qualify. You might be pleasantly surprised by what you learn.

Louisiana Has Programs that May Help Some First-Time Homebuyers

Louisiana actually has two programs designed to help first-time homebuyers: the Market Rate GNMA Program and the Delta 100 Program.

The Market Rate GNMA requires borrowers to have a minimum credit score of 640 and an income that doesn’t exceed 115 percent of their area’s median income. Qualifying borrowers, including first-time homebuyers and those who have purchased a home in the past, may get access to:

• Assistance with the down payment (up to four percent)
• Assistance with closing costs
• Discounted or no loan origination fees
• No bond documents or compliance package requirements

The Delta 100 Program is specifically intended to help homebuyers with poor credit and those who haven’t established an adequate credit history. This loan program is only available in Delta Parishes.

Qualifying for a First-Time Homebuyer Loan with OnPath FCU

There are some standard best practices people should follow if they want to buy a home in the near future. If you’re already doing these things, you can probably qualify for a home loan today. If you’re not doing these things yet, start as soon as possible. Renters are often relieved to learn just how quickly they can make themselves eligible with a little bit of commitment and diligence.

An Adequate Credit Score Isn’t a Perfect Credit Score

There’s a misconception that only people with very good or exceptional credit scores can qualify for mortgages. This is not the case. Even people with “fair” credit scores can qualify for first-time mortgages.

The minimum credit score for many lenders is approximately 620. Some lenders even have first-time homebuyer mortgages with added flexibility, so people in the fair credit score range (approximately 580 to 669) can qualify for a home loan.

If your credit score is below 620, we encourage you to read our past blog on the topic of boosting your credit score. Advice for improving your credit score tends to be:

• Pay your bills on time
• Pay off your debt
• Have errors in your credit report corrected

Maintain an Adequate Debt-to-Income Ratio

Your debt-to-income ratio is a measure of your monthly debt payments compared to your gross income. Just add up all your monthly debt payments (car loans, student loans, average credit card payment, etc.), divide that number by your pre-tax monthly income and multiply the result by 100.

The maximum debt-to-income cutoff varies from lender to lender. Some might have the cutoff at around 45 or 50 percent. A “good” DTI is usually around a third of your income (roughly 33 percent).

Employment and Income Stability

One of the most challenging hurdles faced by many first-time homebuyers is proving reliability via employment and income stability. Some lenders may want to see that you’ve been at the same job for at least two years and that your income is stable and consistent. If you tend to change jobs every year or you’re self-employed, the process can be a little more difficult.

Some lenders will make exceptions if you can show steady income with past tax returns and financial statements.

Homebuyer Education Courses

One of the smallest sacrifices you might need to make to qualify for a first-time homebuyer loan program is attending a homebuyer education course. It’s an easy thing you can do to gain access to loans designed specifically for people in your situation.

Your Choice of New Orleans Lender Matters

First-time homebuyer programs may enforce arbitrary rules, which means there may be programs you don’t qualify for because you don’t live in the right place or your credit score or income is just over the maximum limit for eligibility.

The good news is there are many New Orleans lenders, including OnPath Federal Credit Union, that offer flexible rates, terms and approval conditions for first-time homebuyers.

No two people are identical, and loan approval can be very situational. Some lenders have the flexibility and latitude to work with borrowers on a loan situation that works for both parties.

We understand that the homebuying process can feel overwhelming, especially when it's your first time. When you work with the mortgage team at OnPath Federal Credit Union, you can feel confident that you will have help at every step along the way, from pre-approval through closing.

Call us at 504.648.2064 to learn more about your home loan options.