The Florida FHA mortgage has become the best solution to the majority of first time homeowners in Florida. The Florida FHA mortgage loan program provides several advantages, keeping in mind the funding constraints of many homeowners who are interested in purchasing their first home. In comparison to other traditional home mortgages, the FHA mortgage loan eases the process to the loan applicant. On top of that the FHA mortgage requires a very low down payment, which makes it simplier and easier for homeowners that may have challenges saving money for the sizable down payment required by typical loans.
What are the most valuable advantages in acquiring an FHA loan in Bonita Springs?
• Secure fixed interest rates – One of the biggest advantages of your Florida FHA mortgage loan is the provision of paying a fixed 15 or 30 year rate of interest. As compared to other regular loans where the interest rates fluctuate, the rate stays the same for the entire span of the loan. This period is usually for 30 years. Due to this provision the consumer can pre-plan their specific fixed monthly payment up-front.
• Lowest down payment – The Government guarantees or supports FHA loans, therefore the borrower incurs very little charges during the process. FHA mortgage loans call for a minimum 3.5% financial commitment from the applicant. The loan does allow for the home seller to pay for all closing costs, all the way to 6% which is frequently enough to cover almost any home sale.
• Simple to Qualify – Pre-Qualifying for a Florida FHA home loan is pretty simple and easy. Since it is the FHA that insures your mortgage loan, the loan providers and banks make it simple for everyone to qualify when they meet the central requirements. The primary aspects of qualifying usually are credit history, income and employment.
• Adjustable Interest Rate Option – The FHA loan originated due to the limited budget constraints of first time homeowners. That’s why the FHA has an adjustable rate option for home buyers, which features a rather low payment amount and interest rate.
• No cash reserves required – In contrast to many standard home loan programs, the Florida FHA home mortgage is a pretty attractive option for Bonita Springs, FL first time homeowners which have a little bit of money in the bank.
First Time home buyers have to know what to expect before starting the FHA mortgage application process. Being prepared will often boost your opportunities in successfully having your FHA loan approved. Here we list a number of tips and items to consider.
1. Debt-to-income ratio
Cautious assessment needs to be done here. Mortgage lenders can vary on exact amounts, but a debt load thatâ€™s higher than 41 to 45 percent is risky for an FHA loan. You will need two years of steady employment without having any unexplained interruptions in employment history.
2. Credit Check
It is usually the small things that may damage your credit. Check your income source, overall credit score, as well as rental history that could show up on a credit file. Get every aspect on the up and up, shooting for a good record.
3. Overall credit score
As of 2013, a FICO score of 620 or better is required for the 3.5% down payment with the FHA. In the event you have had a bankruptcy or foreclosure, you would have to have maintained a perfect credit worthiness since then (4 years and 5 years respectively) in spite of recent credit standing.
FHA Loan Application:
• Complete the Buyer Information form, that lets us know just what you have and what you require. It will allow the FHA mortgage professional to get hold of you to discuss your goals. Subsequently a full application will need to be filled out that details all about yourself, the purchaser, which is used for determining whether you are eligible for a home loan or otherwise. The interest rate and loan terms may also be driven largely by the data in your application form, credit ranking, etc.
• In the event the loan application is pre-approved, you get the disclosure documents which are essentially initial loan records that have all the minute details regarding the terms and conditions, mortgage rates, selling price and repayments of the mortgage.
• This should be agreed upon and brought back along with other records like you bank account statements, IDs, personal references, etc., for verification purposes. Usually these documents are prepped and readied prior to when the mortgage loan application is submitted to the lender.
• The processor double checks all confirming papers and may request absent records and documents from you if needed.
• Upon completion, the docs are sent to the underwriter.
• The loan underwriter sends a Conditions List of additional missing elements or docs to the buyer.
• Once the buyer completes the requested items detailed, it is sent back to the mortgage lender for final acceptance. A closing date is then set.
Note: After in contract on a home, the whole loan closure process usually takes around three weeks to a month.
Have Questions? Please be sure to call us, 7 days a week at 800-871-2636 or simply just fill out the short info request form on the right side of our home page at http://fivestarsmortgage.com. Home owners that currently have an FHA home loan can read about the FHA streamline refinance program here – http://fivestarsmortgage.com/florida-fha-loan/. Home buyers living in more rural areas in Florida can read about the 100% USDA mortgage loan at www.usdamortgagesource.com