First time homebuyers can take advantage of the many benefits the FHA home loan has to offer. One of these benefits is the ability to purchase a home with a low down payment and a less than perfect credit score, even borrowers who may have a lower debt to income ratio. Borrowers can enjoy the more lenient guidelines and restrictions when they choose a FHA loan over other conventional loans.
Who is Eligible for a FHA Loan
Everyone! Anyone can apply for a FHA loan, it’s not just for first time home buyers. As long as you’re a legal resident of the United States, have a steady source of income and employment, and have a somewhat decent credit score you can apply for a FHA loan. If you already own a home loan through the FHA loan program, but are not intending on selling or refinancing you are ineligible for a second FHA home loan, unless you are in the process of selling your current home.
Applying for an FHA Loan
The application process for a FHA loan is similar to a conventional loan. The very first step is to shop around and compare rates and get quotes from FHA approved lenders. There are tons of lenders, but not every lender will offer a FHA loan. Once you have found your FHA approved lender, you’re next step is to fill out an application and provide the following information:
- Name and Current Address
- Social Security Number
- Employment Information
- Additional Income Information
- Asset Information
The above information is used to create your pre-approval. If you have already been shopping around for a house and found a home you’d like to apply for, you can skip the pre-approval stage and start your loan process right away. Your lender may ask for additional information not listed above depending on how well your provided information is documented.
After you have applied for a FHA loan and it has been approved, you’ll need to make sure you’re ready with any down payments or monies due, including upfront mortgage insurance and any closing costs. If you don’t have the money available right away, the FHA does allow borrowers to receive a gifted amount of money for loan purposes.
Every case differs as well as every lender and their requirements. The FHA does have their standard procedures, but lenders will typically have their own guidelines in place to protect them from borrowers defaulting on their loans. This is another reason why it’s important to shop lenders. So you can find the lender who has the best rate to fit your needs. Start your lender search by clicking the orange button below.