FHA mortgage loans are provided with the intention of assisting low to moderate income families to secure loan aid in a simple, safe, secure an hassle-free manner without worrying about down payments and other costs of conventional mortgages. FHA home loans are offered for purchasing single-family homes, 2-unit, 3-unit, 4-unit properties and condominiums. Read on for more in-depth information about FHA guidelines to qualify for the loan including tips to secure excellent terms on FHA mortgage from a reputable lender.
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FHA Mortgage Loan Highlights
The Federal government and the State entities have developed many FHA loan programs for the low-income people to help them purchase a home with low down payments. Although HUD does not issue FHA home loan it insures these mortgages with the view to prompt lenders to offer lower interest rates to borrowers.
The FHA loan program has minimal down payment and closing costs. The credit qualifying FHA guidelines and the income and job requirements are flexible and it does not require a minimum FICO score or any other credit score (however, if you are looking for lowest down payments then it is advisable to maintain a good credit background). Also, the debt ratio is higher in FHA mortgage loan when compared to conventional loans. FHA loan programs also permit almost 100% of the borrower's funds to come in the form of a gift. Two or more borrowers, or co-borrowers, can finance a house under this scheme. There are also other facilities such as down payment assistance and mortgage refinance programs that lenders offer in order to entice the borrowers in to purchasing FHA mortgages.
Steps to Securing FHA Home Loan
Read on for information about how to qualify and secure a FHA mortgage loan in few simple hassle-free steps:
The qualifying guidelines for purchasing FHA home loan are as follows:
· Two years of steady employment under the same employer, preferably
· The borrower's income must be stable or increasing
· The borrower cannot have more than one Federal insured loan at a time
· Bankruptcy must be at least 2 years old with good credit since
· Foreclosure must be at least 3 years old with good credit since
· The new mortgage payment should be approximately 30% of gross income
A borrower can spend up to 41% of monthly income on housing and other debts. When the borrower submits the required qualification information, the underwriter reviews the information to make sure it confirms to the guidelines. The following information is reviewed:
· Income and Debt ratios
· Employment History
· Credit History
· Savings / Source of money for down payment
· Appraisal
Once the underwriter has reviewed them, they will issue a writing decision. The decision could be an approval, suspension or denial of the mortgage.
· Approved-meets required guidelines for final approval
· Suspended-additional documentation is needed
· Denied-does not conform to guidelines
If you are considering a FHA mortgage then now is the right time to apply for one. With mortgage interest rates touching historical lows you are guaranteed to receive best terms at lowest possible interest rates. Spare a few seconds to fill out our
simple no-obligation online form. Our mortgage experts will study your situation and your requirements and will find you the best FHA loan program from a reliable lender working in your area.
Have you Considered Using a FHA Loan Calculator?
It is advisable to make use of a FHA loan calculator when planning for FHA mortgages. It enables you to better understand how much mortgage you qualify for and can comfortably afford. It also helps you receive an estimate about mortgage points, mortgage insurance and other closing costs. In order to perform the calculations you have to input information such as your gross annual income and monthly expenses, you may also select the interest rate at which you hope to secure the loan. Based on the information that you provide, the FHA loan calculator gives an estimate of your mortgage rates and the monthly payments.
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