Monthly Archives: February 2012

Further Information Regarding FHA Loan Requirements

FHA loan requirements are generally more lenient than those of conventional lenders. The Federal Housing Administration is a government program administered by Housing and Urban Development (HUD) to help Americans who can’t qualify for a conventional mortgage loan become homeowners. With the announcement of changes to help hundreds of thousands of Americans impacted by the current housing crisis, FHA loan requirements have never been easier to meet.

Required Income

77383447There are no minimum FHA loan requirements for income to obtain an FHA mortgage loan, but you must demonstrate steady income for at least three years, and demonstrate that you’ve consistently paid your bills on time. FHA loan requirements allow seasonal pay, child support, retirement pension payments, unemployment compensation, VA benefits, military pay, Social Security income, alimony, and rent paid by family to qualify as income sources. FHA loan requirements also allow part-time pay, overtime, and bonus pay to count as income as long as they are steady.

Debt-to-Income Ratio

The FHA allows you to use 29% of your income towards housing costs and at total of 41% towards housing expenses plus other long-term debt. Compare this with a conventional loan, which generally allows only 28% toward housing and 36% towards housing expenses plus other debt.

Down Payment

FHA loan requirements specify that you have a down payment of at least 3% of the purchase price of the home, but this cash may be a gift or grant. Most affordable loan programs offered by private lenders require between a 3% – 5% down payment, with a minimum of 3% coming directly from the borrower’s own funds.

Credit Score

FHA loan requirements are generally more flexible than conventional lenders are in their qualifying guidelines. You can qualify for an FHA loan without a credit history. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your lender for details.

FHA loan requirements do not include a requirement for the borrow to have good credit. In the case of bad credit, the FHA allows you to re-establish credit if two years have passed since a bankruptcy has been discharged and all judgments and tax liens have been paid, or if arrangements have been made to establish a repayment plan with the IRS or state Department of Revenue. The FHA may also allow you to borrow once three years have passed since a foreclosure or a deed-in-lieu has been resolved.

Compare FHA Lenders

The Housing and Economic Recovery Act of 2008 has markedly increased the capacity of the FHA to insure loans for borrowers affected by the US housing crisis. Loan amount limits have been raised in some areas, and other restrictions loosened. FHA loan requirements have never been so generous, and any home owner suffering mortgage stress would be well advised to investigate the possibility of FHA loan assistance.

FHA Streamline VS Traditional FHA Loan

Mortgage refinancing may be in the tune of a bailout that bankers are not really piqued on doing. Since refinancing a rather poor mortgage is the next best thing to financially starting anew, there can be good and bad indications of its notion. Good in a way that you are willing to face your mortgage duties, and bad means that there sticks the basic idea of payment defaults. While refinancing can be a prickly exercise, FHA Refinance Mortgages give a breath of fresh air in rearranging mortgages closely suited to your waning mortgage conditions. With FHA Refinance Home Loans, it can give you the remedy of your mortgage turmoil to give you some monetary freedom. This FHA program will help you secure your loans in better standing.

76800249The Federal Housing Administration or the FHA is there to provide refinancing assistance on existing home mortgages. FHA programs such as this come in with attractive benefits. Certified lenders are guaranteed by the FHA to provide the necessary funds that will allow you for whatever purpose you deem it. Since FHA Refinance Mortgages will insure your loan of the necessary repayment capability, lenders are keener to offer good mortgage rates while being assured of getting paid in case borrowers default.

FHA loans are usually given out to eligible borrowers with impressive credit standing. However, people who do not have good credit ratings can still enjoy an FHA loan on the condition that their records must not show any records of declaring bankruptcy in the previous five years. Single parents with a limited source of income can also avail of an FHA loan. As long as an individual qualifies according to FHA requirements, FHA is there to extend you loans and give out refinancing programs. FHA loan approvals depend on the assessment of the borrower’s eligibility to qualify.

Requirements of FHA loans cover renovations to be done in a cost and energy efficient manner. FHA is huge on the conservation of natural resources.

So, you ask, “What makes FHA Streamline Refinance Mortgage different from a conventional mortgage?”

FHA Refinance Home Loans offer options that are not available from other traditional mortgages, which are stricter by any means to borrowers with tainted credit standings. With this FHA program, there is security in FHA loans since lenders are guaranteed repayments. Down payment is only 3% and other costs are carried within the mortgage already. FHA also takes the responsibility in helping you find homes and lending schemes that do not have down payments. FHA borrowings can be used for home repair costs, too.

Do not be misled. FHA is not a lender but a guarantor to your borrowings from a lender. Lenders who are certified by the FHA are under the FHA’s rules and regulations and they should strictly abide by them.

What Is an FHA Loan and What Are the Requirements?

You may be looking for a mortgage program which offers low down payments along with reduced closing costs. FHA loans are a government program offered by the Federal Housing Administration which provides borrowers with a better deal. The FHA, part of the U.S. Department of Housing and Urban Development (HUD), works with FHA approved lenders by insuring qualified borrower’s loan. An FHA insured loan allows the lender to offer lower down payments, less closing costs and easier credit qualifications. However, the borrower must first qualify for a Federal Housing Administration loan based on certain requirements.

76800247An FHA loan could be for first time home buyers, homeowners looking to repair or remodel their home, seniors over 62 years old that are in need of financial aid, and even homeowners of mobile or manufactured homes.

First Time Home Buyers
If you have never purchased a home before, the Federal Housing Administration offers down payments of 3.5% of the purchase price. One to four unit properties are eligible with many of the closing costs and fees included in the FHA loan.

Repairs and Remodeling
You may be looking to buy a home that is not in the best condition, the FHA can help. The Federal Housing Administration allows home buyers to bundle the costs of fixing up a home into their loan. For homeowners who would like to remodel their house, an FHA refinance will allow them to roll the costs into their loan.

Senior Financial Aid
Seniors, older than 62, are eligible for an FHA reverse mortgage if their home is paid off or has a low remaining balance. This loan pulls equity from the home but can be used as financial aid for senior living expenses or for recreational purposes.

Mobile and Manufactured Homes
There is an loan available for borrowers who would like to place a manufactured home on their property. Also, FHA loans are available for mobile homes which are, or will be, placed in a mobile home park.

What Are The FHA Loan Requirements?
Although the FHA insures millions of mortgages for single family and multi-family homes, there are certain FHA loan requirements that much be met first. Some requirements are defined by the borrower’s local Federal Housing Administration office, which makes it important to speak with an approved lender for the most current requirements.

FHA Loan Requirements
Mortgage Insurance Required
Loan Amount Limits
Property Appraisal
Credit Report
Closing Costs
Debt to Income Ratio
Credit Check

Each requirement has different exceptions and FHA loan requirements often change, to keep up with the most current requirements you can visit the FHA website.

FHA loans are great for any buyer who can qualify for the government program. Qualifications do change so the best way to find out if you are eligible is by working with an FHA lender who is approved by the Federal Housing Administration. FHA approved lenders are current with government guidelines and work on assisting borrowers in receiving the right loan for their needs. Since 1934, millions of borrower have trusted FHA loans and utilize the government program to finance their home loans. This is why the Federal Housing Administration insures the most mortgages in the entire world.

FHA Loan Credit Score Requirements

FHA loan credit score requirements for 2011, 2012 and 2013 can change from time to time due to changes in legislation, lending requirements, FHA regulations and underwriting requirements.

76800244FHA loans make it possible today for people who may have less then perfect credit, to still buy a home regardless of his or her low credit score. What is great about this program is, that you do not require a large down payment to buy a house, with a small down payment you too can become a home owner.

FHA loans make it easier for you and others to qualify for homes. The reason why it is easier, is that they are insured, meaning if you or others for whatever reason cannot pay the loan back, FHA makes a guarantee to the bank that they will cover the loan in case of you defaulting on the mortgage loan given by them to you.

So this is why mortgage lenders that have a FHA program, are more willing to give you a loan if you pass their basic loan requirements, because the risk is lifted with the FHA guarantee.

What is great also about these loans, just about any body can qualify for these loans since there are no ceilings set on how much money you must make or not make to qualify. So for those that have great incomes can also apply for a mortgage, you are not discriminated against due to your higher income.

Some of the changes come as part of the new laws that close legal loopholes, improve the fairness of the FHA mortgage loan process, or modernize the FHA loan program. Other alterations are made in response to current market conditions and economic issues.

Because of the changing nature of the FHA home loan program, the information new house hunters may have gathered a year or two ago when considering a new home may not be the same if they chose to wait to start the loan application process.

This is definitely the case for any potential borrower who investigated their FHA loan options before September 3, 2010. That’s the date the FHA issued new guidance on the minimum scores needed for certain FHA guaranteed home loans.

Minimum credit score requirements for FHA home loans depend on which FHA loan product the applicant needs. Generally speaking, to get maximum financing on typical new home purchases, applicants should have a score of 580 or better. Those with scores between 500 and 579 are, according the FHA guidelines, “limited to 90 percent Loan To Value.

Applicants who have a minimum decision credit score of less than 500 are not eligible for FHA mortgages. Those with scores of 500 or better are eligible for 100% FHA loan financing with no down payment required when using the FHA 203(h), Mortgage Insurance for Disaster Victims.

The FHA does make allowances for loan applicants with a “non-traditional credit history or insufficient credit” may be able to be approved for an FHA loan if they meet FHA requirements for such circumstances.

The minimum credit scores listed here are in effect for most FHA home loans for single family residences with a few exceptions which include (but are not limited to) Title 1 Home Equity Conversion Mortgage loans and HOPE For Homeowners loans. Always ask an FHA loan expert or your local FHA lender about your credit score and what you qualify for.

Don’t assume you cannot be approved for an FHA insured home loan-do you have changes in your credit score since the last time the credit reports were run? You may have options that can improve a poor credit score over time. Some potential borrowers may need to spend a year or so repairing bad credit and establishing a reliable payment history.

Those with past credit problems can often improve their scores over time and become eligible even under the new updated FHA minimum score requirements. The first step for you, is to request help from for credit counseling or first time home buyer counseling!!!

Now that you are more informed, why don’t you contact your local bank to discuss the FHA credit score requirements for 2012, to see if you too can also become a proud home owner.

What Is an FHA Loan Application?

It can be a huge and daunting task to deal with the financial side of purchasing a home or starting substantial home repairs. FHA stands for Federal Housing Administration. It is an agency of the federal government. The aim of the FHA is to insure private loans issued for new and existing housing and for home repairs.

76754654The FHA was originally formed by congress in 1934. By 1965 it had become part of the Department of Housing and Urban Development’s Office of Housing. Applying for an FHA loan should help enable people to become homeowners when they otherwise may not financially be able to in the eyes of the bank. The act of insuring the loan can also enable the borrower to get a better deal. An FHA loan application can allow you to achieve low down payments, low closing costs and easy credit qualifying.

Using an FHA loan application can be a great help in buying your first home with a down payment as low as 3.5% of the purchase price. Also most of your fees and closing costs will be included in the loan.

When applying for an FHA loan it also possible to choose to use the amount to re-model or repair your own home. It is possible to refinance the amount that you still owe and add the cost of the needed repairs in one simple loan option. This is also a relevant scheme for the purchase of a home that immediately needs repairs, making it simple and easy to pay of costs of purchase and fixing anything. In terms of the environment it is possible to use this loan support for improving energy efficiency and reducing energy costs in your home.

FHA loans are very accommodating to people from different walks of life and ages. It is possible to get an FHA loan for mobile homes and manufactured housing on privately owned land or mobile home parks. People of any adult age can apply for an FHA loan including senior citizens. If you are 62 or older and own your home or have a low loan balance then FHA can convert a portion of your equity into cash.

Applying for this type of loan involves an amount of preparation. It is important to work on your overall credit score for the application process, as the FHA requires a good credit rating. The application process will also require you to present two years worth of information. This includes all previous addresses, your employer’s name and address, W-2 tax forms and IRS tax returns. Also, monthly gross income must be provided. The basic necessity is that you must be able to show that you are employable in a steady job especially, and that you are financially sensible and reliable enough to continue payments towards your specific loan.

FHA loans can be a great way for people to require less cash when purchasing a home. Lenders can also feel protected which may get you a much better deal with more flexible payments and fees.