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Qualifying For A FHA Loan May Be Easier Than You Think
"Getting pre-approved for a mortgage requires great credit and a large down payment". FALSE! The Federal Housing Administration (FHA) recognizes that not everyone has 20% down payment and great credit, therefore they offer loans with requirements as low as 3.5% down payment and a credit score of 580. If you have those 2 components then you are closer to home ownership than you think. Determining how much you can get pre-approved for depends on your income and debt to income ratio. Broward County and Miami-Dade County have loan limits of $345,000.
Enjoy the article below which briefly covers FHA loans, their requirements, and some benefits.
If you have any questions or would like to get connected to a mortgage lender that can guide you the right way feel free to call/text me at (954) 829-6073 or email me at email@example.com.
Credit Requirements for FHA Loans
Good Credit History Makes it Easier to Qualify
FHA loans provide great assistance to many first time home buyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in policy may have put the loans just out of reach for some would-be homeowners with questionable credit history.
Credit History and Score Requirements
For those interested in applying for an FHA loan, applicants are now required to have a minimum FICO score of 580 to qualify for the low down payment advantage, which is currently at around 3.5 percent.
If your credit score is below 580, however, you aren't necessarily excluded from FHA loan eligibility. Applicants with lower credit scores will have to put down a 10 percent down payment if they want to qualify for a loan.
So if you're planning to buy a house, and your credit score doesn't meet the minimum, you should weigh the advantages and disadvantages of putting down a larger down payment or using those funds to try and improve your credit score first.
Benefits of an FHA Loan
The reason why FHA loans are so popular is because borrowers that use them are able to take advantage of benefits and protections unavailable with most traditional mortgage loans. Loans through the FHA are insured by the agency, so lenders are more lenient. Here are a few benefits you can enjoy with an FHA loan:
Easier to Qualify While most loans exclude applicants with questionable credit history and low credit scores, the FHA makes loans available with lower requirements so its easier for you to qualify.
Competitive Interest Rates You've heard the horror stories of subprime borrowers who couldn't keep up with their mortgage interest rates. Well, FHA loans usually offer lower interest rates to help homeowners afford housing payments.
Lower Fees In addition to lower interest rates, you can also enjoy lower costs on other fees like closing costs, mortgage insurance and others.
Bankruptcy / Foreclosure Just because you've filed for bankruptcy or suffered a foreclosure in the past few years doesn't mean you're excluded from qualifying for an FHA loan. As long as you meet other requirements that satisfy the FHA, such as re-establishment of good credit, solid payment history, etc., you can still qualify.
No Credit The FHA usually requires two lines of credit for qualifying applicants. If you don't have a sufficient credit history, you can try to qualify through a substitute form.
For many home buyers, using an FHA loan can really make the difference between owning your dream house comfortably or turning it into a financial nightmare. The FHA provides a wealth of benefits for applicants that qualify, so make sure you're making full use of them.
Article courtesy of FHA.com
Born and raised in South Florida, Herson is a young and motivated realtor who enjoys bringing the best customer service to his clientele. He likes to build friendships with his clients to make real es....
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