The Florida FHA mortgage has become the best solution to many first time homebuyers in the State of Florida. Florida’s FHA loan program features several advantages, bearing in mind the funding limitations of many homeowners who are interested in purchasing their very first home. When compared with most conventional mortgage loans, the FHA loan eases the process for the applicant. Besides that the FHA loan involves a very low down payment, which makes it simplier and easier for homeowners that may have a tough time saving up the sizeable down payment needed by typical loans.
What are the most important advantages in obtaining an FHA mortgage loan in Branford?
• Secure fixed interest rates – One of the leading advantages of the Florida FHA home loan is the provision of having a fixed 15 or 30 year rate of interest. As compared with other basic loans where the interest rates can vary, the rate remains the same for the entire span of the loan. This period is usually for 30 years. Because of this provision the consumer can plan out their predetermined monthly installment ahead of time.
• Low down payment – The Government insures or backs FHA loans, which means the applicant incurs very minimal fees during the process. FHA mortgages must have a minimum 3.5% financial commitment from the borrower. The loan does support the property seller to cover all closing costs, up to 6% which is frequently enough to cover almost any home sale.
• Simple to Qualify – Prequalifying for a Florida FHA loan is quite straight forward. Since it is the FHA that covers your mortgage loan, the financial institutions and lending institutions make it easy for anyone to qualify that meets the straightforward requirements. The biggest components in qualifying are credit history, earnings and employment history.
• Adjustable Interest Rate Option – The FHA mortgage loan originated due to the limited financial constraints of first time home owners. That’s why the FHA has got an adjustable rate option for home buyers, which entails a remarkably low monthly payment and interest rate.
• There aren’t any cash reserves required – In comparison with other traditional loan programs, the Florida FHA mortgage is a highly tempting option for Branford first time homeowners who have a little income in the bank.
First Time home buyers must know what to expect prior to starting the FHA mortgage application process. Simply being prepared will always raise your opportunities in successfully getting your FHA mortgage accepted. Below we list a few guidelines and aspects to consider.
Prior to application:
1. Debt-to-income ratio
Mindful analysis has to be done here. Creditors fluctuate on exact amounts, still a financial debt load thatâ€™s more than 41 to 45 percent is high-risk for an FHA loan. You will need 2 years of steady employment without having any unexplainable breaks in employment.
2. Credit History
It is typically the small things which can hurt your consumer credit. Check your income source, credit history, together with rental history that could be displayed on a credit score. Get all things handled, aiming for a clean record.
3. Credit worthiness
In 2013, a FICO score of 620 or higher is needed for a 3.5% down payment with the FHA. If you came out of a bankruptcy or foreclosure, you would have to have retained a perfect credit ranking since that time (4 years and 5 years respectively) regardless of recent credit worthiness.
FHA Loan Application:
• Complete the Buyer Information request, which tells us just what you have and just what you want. It will permit the FHA mortgage consultant to contact you to discuss your objectives. Soon after a full application will have to be submitted that highlights all things about you, the borrower, which is used for trying to figure out whether you are qualified to receive a mortgage or otherwise. The rate and terms of the loan will also be determined largely by the info in the application form, credit scores, etc.
• In the event the loan application is preapproved, you will get the disclosure documents which are essentially initial loan documents that have all the minute details regarding the terms and conditions, loan rates, cost and installments of the loan.
• This must be signed and returned along with documents like bank documents, IDs, references, etc., for verification purposes. These documents are prepped and readied prior to when the mortgage loan application is submitted to the mortgage company.
• The processor reviews all confirming documents and may request missing documents from you if need be.
• When completed, the docs will be sent to the underwriter.
• The loan underwriter sends a Conditions List of further missing elements or records to the home buyer.
• After the buyer completes the necessary items listed, it is sent back to the lender for final authorization. A closing date is then set.
Notice: Once you are in contract on a home, the overall loan closure process usually takes around 3 weeks to a month.
Questions? Please be sure to call us, 7 days a week at 800-871-2636 or just complete the quick information request form on the right side of our home page at http://fivestarsmortgage.com. Property owners that currently have an FHA home loan can learn about the FHA streamline refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Home buyers located in more rural areas in Florida can read about the 100% USDA home loan at www.usdamortgagesource.com