The Florida FHA mortgage has become the first option to the majority of first time homebuyers in the State of Florida. The Florida FHA loan program offers several advantages, paying attention to the funding difficulties of most homeowners who are considering purchasing their first residence. When compared with most conventional mortgage loans, the FHA loan eases the buying process to the loan applicant. Besides that the FHA mortgage loan involves a rather low down payment, which makes it much easier for homeowners that may have challenges saving money for the large down payment needed by conventional mortgage loans.
What are the most valuable advantages to getting an FHA loan in Palm Springs, FL?
• Secure fixed interest rates – One of the biggest advantages of the Florida FHA home loan is the benefit of paying a fixed 15 or 30 year rate of interest. In contrast with other standard loans where the loan interest rates vary, the rate remains the same for the full duration of the loan. This period is normally for 30 years. Due to this provision the consumer can pre-plan their fixed monthly installment up-front.
• Minimum down payment – The Government guarantees or supports FHA loans, therefore the applicant has very nominal fees in the process. FHA mortgage loans need a minimum 3.5% investment from the applicant. The loan does support the property seller to cover all closing costs, anywhere up to 6% which can be often enough to take care of almost any home sale.
• Simple to Qualify – Pre-Qualifying for a Florida FHA loan is pretty simple. Because it’s the FHA that covers your mortgage loan, the creditors and banks make it easy for anyone to qualify when they meet the simple requirements. The biggest components in qualifying are usually credit ratings, source of income and job history.
• Adjustable Interest Rate Option – The FHA loan originated due to the limited financial restrictions of first-time buyers. For this reason the FHA has an adjustable rate option for home buyers, which will incorporate a relatively low payment amount and interest rate.
• No cash reserves required – In comparison with numerous standard mortgage programs, Florida’s FHA mortgage loan is a pretty appealing option for Palm Springs, FL first-time property owners who have just a little revenue saved up.
First Time home buyers must know what to expect before starting the FHA mortgage loan application process. Being prepared will often improve your odds in successfully getting your FHA loan accepted. Here we list some steps and things to consider.
In advance of application:
1. Debt-to-income ratio
Careful study should be done here. Lenders can vary on specific amounts, despite the fact that a debts load thatâ€™s more than 41 to 45 percent is risky for an FHA loan. You need 2 years of consistent employment devoid of unexplainable breaks in employment.
2. Credit History
It is all of the small things which will damage your consumer credit rating. Examine your income source, credit, along with rent history which can show on a credit file. Get all of it handled, aiming for a good record.
3. Overall credit score
As of 2013, a FICO score of 620 or higher is needed for the 3.5% downpayment with the FHA. For those who came out of a bankruptcy or foreclosure, you would need to have maintained a perfect FICO score since then (4 years and 5 years respectively) irrespective of existing credit score.
FHA Loan Application:
• Fill out the Buyer Information request, which tells us what you have and just what you may need. This will allow the FHA loan professional get in touch with you to discuss your primary goal. Later on a full mortgage application must be submitted that details all things about yourself, the purchaser, which is used in determining whether you are eligible for a loan or otherwise. The rate and terms of the loan can also be driven largely by the details in the mortgage application form, credit report, etc.
• In case the application is pre-approved, you will get the disclosure records that are essentially initial loan documents that contain all the minute details in connection with terms, rates, selling price and payments of the mortgage loan.
• This should be signed and returned along with other records like you bank documents, IDs, individual references, etc., for verification purposes. Usually these documents are prepared and readied well before the loan application is submitted to the loan provider.
• The processor double checks all confirming documents and may request missing documentation from you if required.
• Upon completion, the docs are then sent to the underwriter.
• The underwriter sends a Conditions List of more missing elements or records to the buyer.
• After the buyer finishes the necessary items listed, it is returned to the mortgage lender for final acceptance. A closing day is then set.
Notice: Once you are in contract on a home, the full loan closure process takes around 3 weeks to a month.
A lot of questions? Please make sure to call us, 7 days a week at 800-871-2636 or simply just fill out the quick information request form on the right side of our home page at http://fivestarsmortgage.com. Home owners that presently have an FHA loan can learn about the FHA streamline refinance program here – http://fivestarsmortgage.com/florida-fha-loan/. Home buyers living in more rural places in Florida can read about the 100% USDA loan at www.usdamortgagesource.com