The Florida FHA mortgage has become the best choice to most first time home buyers in Florida. The Florida FHA home loan program offers several advantages, paying attention to the funding limits of many homeowners who are considering purchasing their first home. When compared with other conventional mortgage loans, the FHA loan facilitates the buying process to the loan applicant. Furthermore the FHA mortgage calls for a rather low down payment, which makes it simplier and easier for homeowners that may have difficulties saving for the large down payment needed by traditional home loans.
What are the biggest benefits in getting an FHA mortgage loan in Elkton, FL?
• Secure fixed interest rate – One of the big advantages of a Florida FHA loan is the benefit of having a fixed 15 or 30 year rate of interest. Compared to the other conventional loans in which the loan interest rates change, the rate remains the same for the entire duration of the mortgage. This period is usually for 30 years. Due to this provision the borrower can budget their specific fixed monthly payment before hand.
• Minimum down payment – The Government insures or backs FHA loans, which means the borrower has very nominal charges along the way. FHA mortgages require a minimum 3.5% financial commitment from the borrower. The mortgage does make it possible for the home seller to cover all closing costs, all the way to 6% which is typically enough to take care of just about any home sale.
• Not Difficult to Qualify – Pre-Qualifying for a Florida FHA loan is very simple and easy. Since it is the FHA that insures your house loan, the financial institutions and mortgage lenders make it easier for anyone to qualify that meets the central requirements. The main components of qualifying are usually credit score, cash flow and employment.
• Adjustable Rate Option – The FHA mortgage loan began due to the limited financial constraints of first time home buyers. That’s the reason the FHA has an adjustable rate option for home buyers, which entails a very low payment and interest rate.
• There aren’t any cash reserves required – When compared to many traditional mortgage programs, the Florida FHA mortgage loan is a particularly appealing option for Elkton first time property owners which have a little funds saved up.
First-time purchasers need to know what to expect before beginning the FHA mortgage application process. Being prepared will always better your chances in successfully getting the FHA loan accepted. Here we list a few basic steps and issues to consider.
In advance of application:
1. Debt-to-income ratio
Thorough assessment needs to be done at this stage. Lenders vary on exact amounts, but a debts load thatâ€™s higher than 41 to 45 percent is high risk for an FHA loan. You absolutely need two years of steady employment without unexplainable breaks in employment history.
2. Credit History
It is typically the small things which will hurt your credit rating. Look at your earnings, credit ranking, as well as rental history which can show up on a credit file. Get all the things handled, aiming towards a spotless record.
3. Credit scores
In 2013, a FICO score of 620 or higher is needed for a 3.5% downpayment with the FHA. In case you came out of a bankruptcy or foreclosure, you must have maintained a perfect credit score since that time (4 years and 5 years respectively) regardless of present credit standing.
FHA Loan Application:
• Fill out the Buyer Information request, that lets us know what you have and just what you require. This will allow the FHA loan professional to call you to discuss your objectives. Soon after a full mortgage application will have to be submitted that highlights everything about yourself, the applicant, which is used in trying to figure out whether you are eligible for a mortgage or otherwise. The rate and terms of the loan may also be driven largely by the information in your mortgage application form, credit history, etc.
• In the event the application is pre-approved, you get the disclosure records which are essentially preliminary loan records which have all the minute details with regards to the terms and conditions, interest levels, selling price and repayments of the mortgage loan.
• This must be signed and returned along with documents such as your bank account statements, IDs, individual references, etc., for verification purposes. Usually these documents are prepared and readied ahead of the mortgage loan application is submitted to the mortgage lender.
• The processor double checks all confirming records and might request absent documents from the borrower if needed.
• Upon completion, the written documents are then submitted to the underwriter.
• The underwriter will send a Conditions List of other missing items or docs to the buyer.
• When the buyer completes the required items on the list, it is returned to the lender for final affirmation. A closing day is then established.
Note: When you are in contract on a residence, the entire loan closing process can take close to 3 weeks to a month.
A lot of questions? Be sure to call us, 7 days a week at 800-871-2636 or simply submit the easy information request form on the right side of our home page at http://fivestarsmortgage.com. Property owners that presently have an FHA loan can learn about the FHA streamline refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Homebuyers located in more rural locations in Florida can learn more about the 100% USDA mortgage at www.usdamortgagesource.com