| Buying a home can be an exciting, yet stressful, time. | | | | positive credit history over the previous two years. |
| There are so many different loan options for | | | | Lenders check to make sure that the borrower did not |
| borrowers to choose from such as: Conventional, FHA, | | | | have any bankruptcies over those past two years. |
| VA and No-Document. One of the loan options that is | | | | Also, one thing to remember when applying for an |
| gaining popularity is the FHA loan. | | | | FHA mortgage is to not make a major credit |
| Federal Housing Administration (FHA) mortgages are | | | | purchase. This could hurt the borrower's |
| insured by the federal government. But let it be known | | | | debt-to-income ratio. The borrower must also have a |
| that FHA does not give out loans. They offer | | | | good employment history showing that their income |
| assistance to borrowers in getting a loan to make the | | | | has been consistent. If the borrower has been |
| lenders more at ease. It is mostly designed for low and | | | | employed by the same employer for at least two |
| middle income borrowers and many first-time home | | | | years, then that could be a plus. There is no minimum |
| buyers. If the borrower's credit is not up to par, then | | | | income requirement in order to get an FHA loan. |
| this just may be the right program for them. Under | | | | Depending on the borrower's monthly income, lenders |
| FHA loans, the borrower must pay mortgage | | | | want to make sure that their mortgage payment is 30 |
| insurance premiums (MIP). The initial premium is based | | | | percent or less of their gross income. Another |
| in part on the term of the loan and the amount of the | | | | requirement for an FHA loan would be the ability to |
| down payment. This can equal as much as 2.25 | | | | make a down payment of at least 3 percent of the |
| percent of the amount that was borrowed. The | | | | purchase price. Most likely, if approved, the borrower |
| premium can be financed into the loan. Also, the annual | | | | can expect to obtain a fixed rate loan. |
| MIP can vary from .25 to .50 percent of the amount | | | | FHA's mission is to help borrowers receive the right |
| that was financed. The borrower pays this as a part | | | | loan amounts that they qualify for. If the borrower can |
| of the monthly mortgage payments. | | | | meet all of these requirements, then they are on the |
| There are a few requirements for an FHA mortgage. | | | | right path to achieving that American dream! |
| One of these requirements is that you must have a | | | | |