The Florida FHA mortgage has become the best solution to most first time buyers in the State of Florida. The Florida FHA home loan program gives several benefits, keeping in mind the financial constraints of most homeowners who are considering purchasing their first home. Compared to most traditional home mortgages, the FHA loan eases the buying process to the applicant. Besides that the FHA mortgage involves a fairly low down payment, which makes it much easier for homeowners that may have problems saving up the large down payment needed by common mortgage loans.
What are the big benefits in acquiring an FHA loan in Deland?
• Secure fixed loan interest rate – One of the big advantages for the Florida FHA mortgage loan is the benefit of paying a fixed 15 or 30 year interest rate. Compared to other standard loans in which the interest rates change, the rate continues to be the same for the full length of the loan. This timeframe is usually for 30 years. Due to this provision the borrower can plan out their predetermined monthly payment up-front.
• Low down payment – The Government guarantees or backs FHA loans, therefore the borrower incurs very little charges in the process. FHA home loans need a minimum 3.5% financial commitment from the applicant. The loan does make it possible for the home seller to pay all closing costs, as much as 6% which can be normally enough to handle just about any property purchase.
• Not Hard to Qualify – Prequalifying for a Florida FHA loan is very straightforward. Since it is the FHA that covers the home loan, the lenders and banks make it straightforward for anybody to qualify when they meet the base requirements. The key aspects of qualifying are generally credit rating, income source and employment.
• Adjustable Rate Option – The FHA mortgage loan started due to tight budget constraints of first time home buyers. This is exactly why the FHA features an adjustable rate option for home buyers, which has a surprisingly low monthly repayment and interest rate.
• There are not any cash reserves required – When compared to other standard loan programs, the Florida FHA home loan is a pretty attractive option for Deland, FL first time home-owners who have just a little money saved up.
First Time home buyers should find out what to expect before starting the FHA home loan application process. Being prepared will usually enhance your odds in successfully getting your FHA loan approved. Below we have listed some basic steps and issues to consider.
In advance of application:
1. Debt-to-income ratio
Careful evaluation should be done here. Mortgage companies can vary on exact amounts, but a debt load that is above 41 to 45 percent is risky for an FHA loan. You absolutely need two years of continual employment without having any unexplainable interruptions in job history.
2. Credit History
It is usually the tiny problems which may damage your consumer credit rating. Examine your earnings, credit ranking, as well as rent history that could show on a credit file. Get all the things handled, focusing on a thoroughly clean record.
3. Credit ratings
As of 2013, a FICO score of 620 or greater is required for the 3.5% downpayment with the FHA. For those who have had a bankruptcy or foreclosure, you must have retained a perfect credit history since then (4 years and 5 years respectively) irregardless of current credit rating.
FHA Mortgage Application:
• Fill out the Buyer Information request, that tells us just what you have and just what you require. This will permit the FHA mortgage loan consultant to contact you to discuss your goals. Later on a full application will need to be submitted that details everything about yourself, the borrower, which is used for trying to figure out whether you are eligible for a mortgage or otherwise. The rate and loan terms may also be driven largely by the information in the application form, credit scores, etc.
• In case the loan application is preapproved, you get the disclosure documents that are essentially preliminary loan documents which have all the minute details with regards to the terms and conditions, mortgage rates, cost and monthly payments of the mortgage loan.
• This must be signed and brought back along with other documents like you bank statements, IDs, references, etc., for verification purposes. Usually these documents are prepped and readied prior to when the mortgage loan application is sent to the mortgage lender.
• The processor double checks all verifying records and may ask for missing documents from you if required.
• Upon completion, the records and documents are then sent to the underwriter.
• The underwriter will send a Conditions List of other missing elements or docs to the purchaser.
• When the buyer completes the required items listed, it is returned to the mortgage lender for final approval. A closing date is then set.
Please Note: After in contract on a property, the full loan closure process takes roughly 3 weeks to a month.
A lot of questions? Please call us, 7 days a week at 800-871-2636 or simply just fill out the short information request form on the right side of our home page at http://fivestarsmortgage.com. Homeowners that currently have an FHA mortgage loan can learn about the FHA streamline refinance program here – http://fivestarsmortgage.com/florida-fha-loan/. Homebuyers residing in more rural areas in Florida can learn about the 100% USDA mortgage at www.usdamortgagesource.com