The Florida FHA mortgage is the first choice to many first time homeowners in Florida. Florida’s FHA mortgage loan program features several benefits, keeping in mind the funding constraints of most homeowners who are interested in buying their very first residence. When compared with most traditional home mortgages, the FHA mortgage loan facilitates the process for the loan applicant. Aside from that the FHA loan involves a rather low down payment, which makes it simplier and easier for homeowners that may have difficulties saving money for the sizeable down payment required by conventional home loans.
What are the primary benefits in choosing an FHA loan in West Palm Beach, FL?
• Secure fixed interest rates – One of the leading advantages of the Florida FHA home loan is the benefit of paying a fixed 15 or 30 year interest rate. In contrast with other standard loans in which the loan interest rates change, the rate stays the same for the total duration of the loan. This period is typically for 30 years. Because of this provision the borrower can plan out their specific predetermined monthly payment ahead of time.
• Minimum down payment – The Government guarantees or supports FHA loans, therefore the borrower has very little fees during the process. FHA mortgages call for a minimum 3.5% financial commitment from the borrower. The mortgage does allow for the property seller to cover all costs of closing, anywhere up to 6% which is usually enough to cover virtually any home sale.
• Simple to Qualify – Prequalifying for a Florida FHA loan is pretty straightforward. Because it’s the FHA that covers your home loan, the creditors and banks make it simple for anyone to qualify that meets the basic requirements. The main components in qualifying are history of credit, cash flow and employment records.
• Adjustable Interest Rate Option – The FHA mortgage loan started because of the tight financial restrictions of first time home buyers. This is exactly why the FHA has got an adjustable rate option for home buyers, which calls for a rather low monthly payment and interest rate.
• There aren’t any cash reserves required – In contrast to most standard loan programs, Florida’s FHA mortgage is a highly appealing option for West Palm Beach first time property owners that have a little bit of income saved up.
First Time purchasers must know what to expect prior to starting the FHA mortgage application process. Being prepared will usually better your chances in successfully getting the FHA mortgage approved. Below we have listed some basic steps and aspects to consider.
In advance of application:
1. Debt-to-income ratio
Cautious evaluation needs to be done here. Lenders can vary on actual amounts, still a financial debt load that is higher than 41 to 45 percent is high-risk for an FHA loan. You should have 2 years of consistent employment without any unexplained interruptions in job history.
2. Credit Check
It is normally the small things that can damage your credit ratings. Look at your income source, overall credit score, together with rental history that can be displayed on a credit score. Get all the details on the up and up, aiming for a clean record.
3. Credit score
In 2013, a FICO score of 620 or greater is needed for the 3.5% down payment with the FHA. In the event you have had a bankruptcy or foreclosure, you will have to have maintained a perfect credit worthiness since then (4 years and 5 years respectively) irrespective of current credit rating.
FHA Loan Application:
• Fill out the Buyer Information request, that lets us know just what you have and what you will want. This will allow the FHA mortgage professional get in touch with you to discuss your primary goal. Subsequently a full application must be filled out that details all things about you, the borrower, which is used in finding out whether you are qualified to receive a mortgage loan or otherwise. The rate and loan terms can also be determined largely by the details in the loan application form, credit standing, etc.
• In case the application is preapproved, you get the disclosure records which are essentially preliminary loan documents which have all the minute details concerning the terms and conditions, interest levels, cost and installments of the home loan.
• This should be agreed upon and brought back along with documents such as your bank account statements, IDs, individual references, etc., for validation purposes. These documents are prepared and readied well before the loan application is sent to the mortgage company.
• The processor reviews all verifying documents and may ask for absent docs from the borrower if necessary.
• When completed, the written documents are sent to the underwriter.
• The underwriter sends a Conditions List of other missing elements or documents to the purchaser.
• After the buyer completes the required items on the list, it is returned to the lender for final approval. A closing day is then scheduled.
Please Note: After in contract on a property, the whole loan closing process can take about three weeks to a month.
Have Questions? Be sure to call us, 7 days a week at 800-871-2636 or just complete the quick info request form on the right side of our home page at http://fivestarsmortgage.com. Property owners that presently have an FHA mortgage loan can read about the FHA streamline refinance program here – http://fivestarsmortgage.com/florida-fha-loan/. Buyers living in more rural areas in The state of Florida can read about the 100% USDA mortgage at www.usdamortgagesource.com