What to Expect During the Home Loan Process in Seguin, Texas

Navigating the home loan process can feel overwhelming, especially if you’re starting with a less-than-perfect credit score. But with the right guidance, purchasing a home in Seguin, Texas, is absolutely achievable! Here’s what to expect from start to finish and how your credit score plays a role along the way.

1. Pre-Qualification: Setting the Foundation

The first step in the home loan process is pre-qualification. This involves sharing basic financial details, such as your income, debts, and credit score, with your lender. For borrowers with a credit score around 550, programs like FHA loans may be a great fit since they’re designed to help individuals with lower scores.

Tip: Being upfront about your financial situation helps match you with the best options available.

2. Gathering Documentation: Proving Your Eligibility

Once pre-qualified, it’s time to gather the necessary paperwork. Commonly required documents include:

1. Recent pay stubs
2. Bank statements
3. Tax returns
4. Proof of down payment funds

If your credit score is on the lower end, expect to demonstrate your ability to manage monthly payments with steady income and a manageable debt-to-income (DTI) ratio.

3. The Loan Application: Making It Official

Your loan application is a detailed process where the lender evaluates your financial health. While a lower credit score might raise concerns, lenders also consider compensating factors, such as job stability, savings, or a larger down payment.

Pro Tip: Even with a 550 credit score, showing strong financial habits like consistent rent payments can work in your favor.

4. Underwriting: The Final Review

This step involves a thorough analysis of your finances, particularly looking at your credit history, payment trends, and overall risk. Be prepared to answer questions or provide additional documentation.

Good News: Working with us at New Horizons Lending as we're familiar with Seguin’s housing market can make this process smoother, as they understand unique regional factors.

5. Closing: The Moment You’ve Been Waiting For

Once approved, you’ll review and sign the final paperwork. After completing this step, the keys to your new home are yours!

Get Expert Guidance Every Step of the Way

The home loan process may seem complex, but it doesn’t have to be. At New Horizons Lending, we specialize in helping buyers in Seguin, Texas—no matter their credit score—navigate the path to homeownership with confidence.

Ready to take the first step? Contact us today, and let’s discuss your options for making your dream home a reality!