If you have been trying to get a home loan with a traditional mortgage and have been unable to do so, you will want to look at applying for an FHA home loan. The requirements are not as strict and you need less money for a down payment. While these are probably the most important issues for you, there are a set of guidelines that must be followed to qualify. This article will give you the basic requirements. The actual lender may have some additional qualifications that they want to see.
The home that you are purchasing must be for your personal use. Acquiring a loan for an investment property is not allowed. When you are applying for the FHA loan you will be required to produce a social security number that is valid. This type of loan is specifically for homeowners, to help people achieve the dream of living in their own home.
You will be eligible for an FHA loan if you are a legal resident of the United States. There is no stipulation that you have to be a citizen of the United States, just that you are living in the country lawfully. If you are not of legal age to sign a contract such as a mortgage you will be denied the loan.
Not every bank or lending institution can offer FHA loans. You will need to find one that is qualified to do so. Once you have done that you can expect to provide the following information: income verification, your assets, credit history and the liabilities you have. Your FICO score will be attained for the purpose of the loan, but it is not as critical to achieving success.
There are no income limits that would stop you from getting an FHA loan. However, you must show that you are able to pay the monthly mortgage payments. This is why the proof of your income is needed.
While the FHA lender does look at FICO scores they do not have to be a high as a traditional loan requires. The laws recently changed with regard to the score needed. The typical score they would like to see is 620 plus, but considerations can be made if you have had a good past payment history.
If you have had a bankruptcy in your past, then you must wait at least a year before applying for an FHA loan. It is considerably longer if you try for a traditional 30 year fixed loan.
Many first time buyers won’t have a credit history either because they are young or have paid cash for everything. This should not deter you from applying. When you have a good rental history, paid your bills promptly and perhaps had a chance to put some savings aside you have an excellent opportunity to get the loan.