How Can I Apply For FHA Loan

How Can I Apply For FHA Loan

FHA loan requirements are frequently less stringent than conventional mortgages. FHA will still look at credit, income, assets and ability to repay the mortgage loan.

FHA doesn't require you to have a traditional credit history in order to consider your reliability. Instead, lenders can build a credit history based on utility payments, rental payments, auto insurance payments, and other payments that don't appear in credit files.

They will also consider whether you've had a bankruptcy in the last two years. You should have a good history of on-time payments in the last two years and be current on all payments. If you're in default on any student loans, you will not qualify for an FHA loan.

FHA Income

Regardless of the FHA loan limit for your area, the amount of loan you qualify for depends on your income and ability to pay. Under FHA standards, you should spend no more than 31% of your monthly income on your mortgage, property tax, and insurance. In addition, you should spend no more than 49% of your income on total debt payments, including student loans, car loans, and credit card debt.

FHA Down Payment

FHA down payment requires a minimum of 3.50% of the purchase price. The funds may be the borrower's own funds, a gift from a family member, rent credit or borrowed.

If you will be using your own funds for the down payment you will have to provide three recent months statements showing the funds in your account.

Credit Score

FHA allows borrowers with scores above 580 to make a 3.5% down payment and up to 6% seller concession to purchase a home. Reserves may be required for borrowers with scores below 640.

If you have FICO scores below 580 new FHA changes require a 10% down payment. The funds can be a gift from a family member and up to 6% seller concession is allowed.

Borrowers with a score above 580 can refinance up to a 97.5% loan-to-value on a rate and term refinance. And up to 85% cash out refinance with a FICO score above 580.

If you have score below 580 new FHA changes require a maximum loan-to-value of 90% for a rate and term refinance. And up to 75% cash out refinance with FICO score below 580.

How Can I Apply For FHA Loan Florida, How Can I Apply For FHA Loan Florida

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