FHA for first time homebuyers - Rates Are Hot

FHA Mortgage Loan Requirements:

FHA offers mortgages to individuals who have less than perfect credit and less than 20% to put down on the home. To obtain an FHA mortgage the lender only requires 3.5% down or less.

For example, if you are looking to purchase a home with a purchase price of:

$200,000 (purchase price) x 3.5% (required FHA down payment) for an FHA mortgage = $7,000 down payment.  If you went with an FHA mortgage loan this is the amount that you would be required to put down as a required down payment on your desired home. 

Some of the basic FHA mortgage loan requirements are:

• Two Years of steady employment, preferably with same employer.
• Last two years Income should be the same or increasing.
• Credit report should typically have less than two thirty day lates in last two years with a minimum credit score of 620 or higher or in some cases no credit score at all.
• Bankruptcy's must be at least two years old, with perfect credit since discharge.
• Foreclosure's must be at least three years old, with perfect credit since.
• Your new mortgage payment should be approximately 30% of your gross (before taxes) income.

These are some of the most basic FHA mortgage loan requirements in order to prequalify for an FHA mortgage loan.

FHA mortgage loans typically take longer to process then regular FNMA conventional mortgage loans. This is due to the fact that the mortgage underwriter is required to verify more documentation in an FHA mortgage loan file. The FHA mortgage guidelines are less stringent but the files are thicker. In some cases, mortgage borrowers lack the credit needed to get approved for mortgages. In these cases, FHA will accept non-traditional credit such as canceled checks from landlords, proof of payments for the past 12 months of utility bills, cell phone bills, etc...This is on a case by case basis and under the mortgage underwriters discretion.

The FHA also allows certain grants from non profit communities for downpayments. This means when a potential homebuyer is short on funds for the required amount of downpayment on the home, they can seek non-profit organizations to help them with the amount needed. There are some organizations which help support communities by supplying individuals with the help they need in order to own a home.. This helps to build stronger communities. Since the FHA is a government insured loan, they favor homeownership and work with individuals as much as guidelines allow in order to improve homeownership and lessen the amount of vacant homes that are empty due to foreclosures. Is it easy to get prequalified for a FHA loan. Go to: www.ratesarehot.com, and get prequalified for a mortgage.

To find out more information about HUD homes for sale go to: http://portal.hud.gov/hudportal/HUD?src=/federal_housing_administration

To find out fha loan limits per county and state go to: https://entp.hud.gov/idapp/html/hicost1.cfm.