FHA LOAN REQUIREMENTS
In today’s housing market crisis, getting a traditional mortgage approved is not an easy task. There are strict requirements that you must meet, which makes it almost impossible for the average American to get a loan. For this reason, FHA loans may be your easiest and only solution to getting approved.
- You do not have to be a US citizen, but you must be a permanent resident who is permitted to work in the United States.
- You must have a valid Social Security Number.
- Steady employment for the past 2 years (preferably but not limited to same employer).
- No minimum or maximum income restrictions, but you must have an unchanged or increasing income for the past 2 years.
- You have less than two 30-day late payments on your credit report listing.
- If you have any bankruptcy filings, they must be more than 2 years old and you must have a perfect credit since the filing.
- If you have any foreclosures, they must be more than 3 years old and you must have a perfect credit score since the filing.
- Your current mortgage payments must be approximately 30% of your income before taxes.
- You do not have any student loans currently in default.
If you meet all or most of the above requirements, apply now to gain freedom from mortgage stress.
Many people are intimidated by a loan process and are too overwhelmed to ask questions. Lenders count on this fact to benefit themselves, not always using the most ethical practices. For this reason, you must understand the requirements, and also be familiar with the steps that must be followed to ensure that your loan is approved and finalized in your favor.
Here at FHA Lending Requirements, we have made a quick list below of the FHA loan process to help you understand and make this daunting process a bit easier. We are here to help you through every step of this loaning process to get you approved quickly and conveniently.
- The documents you need will include a list of personal paperwork required to proceed with an FHA application. These documents are vital to successfully completing your loan process.
- Displaying your income and earnings will also be necessary. Through this, you will be able to demonstrate that you are capable of managing a mortgage payment, which is one of the requirements for your loan.
- FHA will need to know your history of debt management, though they are certainly not as strict about this history as you would find with other conventional lenders. Your credit will be a large factor which determines this capability to manage money and debt.
- If you have any kind of savings or money set aside. this will tremendously help to display your ability to create seasoned funds. This will push the process along more smoothly.
- Closing costs are required by all lenders, and include a transaction and documentation service fee. However, FHA works hard to regulate their costs, and keep them much lower for you.
- Using debt to income ratios. FHA can determine if you will be able to handle the loan given to you. This will help to make your budgeting job easier, and will also help to establish the loan amount that would be best for you.
- You will encounter a standard loan processing phase. while FHA goes through your paperwork and checks all of the information. If any problems do arise, this is the time when these issues can be quickly modified and resolved.
- Your paperwork will then be sent to an underwriter. who will carefully review all of your documents and conclude if they meet the FHA requirements. At this point, if all goes as it should, your loan will be approved!
- As with any kind of lending, delays can spring up now and then. However, 30 days is usually the standard for closing a loan.
- Once you have decided on the home you want, a licensed professional who is certified by the FHA must appraise your house. This is a crucial part of the process, and will determine the final amount of your loan.
- After one more review and your approval. the money can be transferred to you, and you can move forward with your home purchasing plans.
- During escrow, you will set up an account which you will make monthly payments to. It is separate from your mortgage payment. Through this account, FHA can directly pay the property taxes and insurance which your home requires.
- Once you have reached the recording phase. you are in the final step! Your documents will be signed and notarized, and sent to your future county to become public record.