Corpus Christi, the seat of Nueces County, is located along the Gulf Coast border in Texas. The population of Corpus Christi today is around 330,000 with the larger Corpus Christi MSA home to about 450,000. Corpus Christi’s city limits encompass more than 500 square miles, 175 being land and almost twice that area in water. The primary economic driver in the Corpus area is its port, the Port of Corpus Christi which is the fifth-largest in the country.
Tourism is also an important contributor to the economy. Corpus Christi is also home to Mustang Beach, an island just offshore and north of Padre Island. Although tourists visit the area year-round, Mustang and Padre Island are Spring Break destinations for college students throughout the region.
Beyond tourism and the Port, Corpus Christi is home to the Naval Air Station Corpus Christi which employs some 6,200 locals, the largest single employer in the region. The Corpus Christi Army Depot and the United States Coast Guard also have facilities there. It’s location and port access primarily ship steel and oil and gas products for destinations around the world.
Real estate values continue to climb in the area and the median home value for Corpus Christi is around $145,000, an increase of approximately 3.0% from the previous year. The real estate trend for the region is still on the upswing. Home prices in the area are favorable for first-time buyers and there are several choices for a low down payment mortgage.
The three government-backed loans are an ideal selection for first-time buyers who are looking for a loan that requires as little down as possible. One of these is the USDA loan which requires no down payment from the borrower. The USDA loan was originally designed to help households buy and finance a home in rural areas. Corpus Christ proper is not included in these approved zones yet the neighboring cities of Ingleside and Aransas Pass do have approved areas.
If you’re thinking of buying in these areas and want to use the USDA loan, you’ll want to speak with your loan officer and provide a potential property address to see if it qualifies. In addition, there are limits on household earnings in order to qualify. Generally, this amount is 115% of the median income for the area. The USDA loan comes with a guarantee to the lender that is funded by two insurance premiums, an upfront premium rolled into the loan amount and an annual one paid monthly. If the USDA loan goes into foreclosure the lender is compensated for the loss.
The other zero down option is the VA home loan program. Mostly active duty personnel with 181 or more days of service and veterans of the armed services qualify for this loan. Because it is also a government-backed home loan, the lender is compensated for the loss due to default at 25% of the defaulted balance. VA loans offer 100% financing with zero mortgage insurance costs.
FHA also has its own program and asks for a down payment of 3.5% of the sales price. The FHA loan has no restrictions as it relates to the location of the subject property and there are no limits as to how much money the borrowers make each month to qualify.
Conventional mortgages can also ask for a down payment of at least 5.0% for a conforming loan underwritten to Fannie Mae or Freddie Mac guidelines.
A low or no down payment mortgage program still requires cash to close as there are various third-party charges for additional documentation and services such as an appraisal, escrow or lender fee among others. Your loan officer can provide you with an approximate cost of how much money you’ll need for closing costs over the phone or in writing with a loan cost estimate.
First-time buyers typically find saving up to buy a home is the biggest single challenge. Most first time buyers tap into their savings or checking accounts for these funds. But there are other resources. One such source might be to tap into a 401(k) plan or IRA. There are some first-time buyer provisions that allow first-time buyers to withdraw money for a first home without penalty. You’ll want to first check with your Human Resources department of IRA custodian for further details.
You can also get a financial gift from a family member or a qualified non-profit. When receiving a gift, there will be a tiny bit of paperwork needed to track the gift funds including identifying who is providing the gift and that the money is not expected to be paid back. The donors can fill out a gift letter spelling all this out along with how much money is being transferred. Documentation of the receipt of these gift funds is needed but the easiest way is to have the donors wire the gift funds directly to the escrow officer handling the closing.
Another source is to ask the sellers to pay for all or part of your closing costs as part of your negotiations. There are limitations on how much the sellers can give based upon the type of loan program you select. For instance, VA loans limit how much the sellers can provide at 4.0% of the sales price. Other programs may limit this to 6%, your loan officer can provide you with further details. Lenders can also help by making an adjustment to your interest rate and issue a credit toward your closing costs at the settlement.
Finally, you can sell any personal property you own. But this can be a little tricky. First, the property must clearly be identified as belonging to you. Second, and just as important, the item you’re selling can be appraised by a third-party appraiser. This can mean selling an automobile you own. The current value of the vehicle is generally available online and is documented with a copy of the receipt of the sale.
In today’s lending environment, first-time buyers discover they’re probably a lot closer to owning their first home than they initially realized. But the most important step you can take is to speak with your loan officer to find out what your best options really are. Give us a call today at the number above, or just submit the Quick Request Form at the top of this page.