FHA loans are by far the most popular choice for many first-time home buyers. It is short for Federal Housing Administration, which is a government agency that insures the home mortgage loans under its umbrella. However, it does not lend any money directly to borrowers; FHA approved lenders do. It only provides the insurance, in case a borrower defaults on their credit.
If you want to apply, contact FHA mortgage Moreira Team. These government-backed loans are so popular because the qualifying criteria are not as rigid as with conventional ones. Also, you can finance the purchase of a new home with less than the traditional 20% down payment. In fact, you can put down as little as 3.5%, which is excellent for those who do not have enough money saved up to buy a new home. Thanks to the small down payment, more people can purchase their dream house.
Before contacting a mortgage expert, you need to be aware of several requirements you have to fulfill. If these loans are something you find suitable, fantastic, you have finally found the most appropriate financing option. However, before applying, there are some qualifications you need to meet. For example, a person who wants to get approved needs to have at least two years of consistent income, preferably from the same employer. Once you prove your employment history, lenders will take a look at the last couple of years of income to see if it has stayed the same, or even better, increased.
A credit report is also significant when borrowing money. The highest chance of getting approved you have is if there are no late payments on your debts in the last two years, but if you have no more than two 30-day late payments, it is also allowable.
What is so amazing about FHA loans is that you can get approved even if you have filed for bankruptcy before. However, you need to wait at least two years after been discharged to apply. When it comes to foreclosure, it is very similar, only in this case, you should wait for three years. A perfect credit score since these two unfortunate events is also required. In addition, the total mortgage payment should not be more than 30% of your gross income.
These are the qualifications from a very broad point of view, for more details you need to contact an FHA mortgage lender. Most people are able to fulfill these conditions, and get approved, which is why these particular loans are so popular. They are an ideal financing solution for an average person looking to become a homeowner. Unlike other types of home loan products, in this case, you do not need to have a ton of money set aside for the down payment, and can get approved even without perfect credit. If you want to buy a house, your best chance is through the government-backed FHA home loan program.