FHA World - Apply FHA Loan
How to apply for a FHA Loan. Whether you're planing to refinance, buy your first home, lower your monthly payments, buy a second home, consolidate debt or get pre-approved for a mortgage your application will depend on four factors:
Credit - You must have a minimum credit score of 580 to meet most FHA guidelines. If your credit score is less than 580 on a case by case scenario.
Income - Your debt to income ratio should be below 50% and you should have a two year employment history.
Assets - For purchase loans assets must be sourced and verified.
Property - FHA Loans are available for 1-to-4 families dwellings. 1-2 families require 3.5% down payment 3-4 families require 5% down
Items you will need to Purchase a Home or Refinance your mortgage:
* One Months Pay Stubs
* W2's for the last Two Years
* Three Months Banks Statements (all pages)
* Copy of Social Security Number
* Copy of Driver's License
* If Purchase Sales Contract
* If Refinance Current Mortgage Statement
FHA World - FHA Credit Score
Generally, a borrower who has made timely payments for the last 12 months serves as a guide and demonstrates their willingness to repay future credit obligations. New FHA Policy changes require minimum FICO score to be 580 for 85% loan-to-value. These FICO requirements went into effect in the spring 2010. However, most individual lenders will still require credit scores higher than 640.
A perfect credit score is not needed for an FHA loan approval. In fact, even if you have had credit problems, such as a bankruptcy, it's easier for you to qualify for an FHA loan than a for a conventional loan. Scores down to 500 are accepted if there are compensating factors that offset the credit risk
FHA loan requirements new borrowers with less than a 580 credit score will be required to put down at least 10%
FHA requires a minimum credit score of 500 to buy a home or refinance
Chapter 7 Bankruptcy at least two years must have elapsed since the discharge date
Foreclosure must have been resolved for at least 3 years
Government loan: Seasoning is determined by the date the claim was paid
Loans other than Government: Seasoning is determined by the date of sale the lender sold the property
FHA guidelines requires three year past from the date of sale of the property
What documentation will I need?