The Florida FHA mortgage has become the first option to most first time buyers in Florida. The Florida FHA mortgage loan program gives several benefits, paying attention to the funding constraints of many homeowners who are interested in buying their very first residence. Compared to other conventional mortgage loans, the FHA loan eases the purchasing process for the applicant. On top of that the FHA loan involves a very low down payment, which makes it much simpler for homeowners that may have problems saving for the sizeable down payment required by conventional loans.
What are the big advantages in choosing an FHA mortgage loan in Panama City, FL?
• Secure fixed interest rate – One of the leading advantages of your Florida FHA loan is the provision of having a fixed 15 or 30 year interest rate. When compared with other basic loans where the loan interest rates change, the rate remains the same for the full lifetime of the mortgage. This period is usually for 30 years. Due to this provision the borrower can plan their specific predetermined monthly payment beforehand.
• Lowest down payment – The Federal government guarantees or supports FHA loans, which means the applicant incurs very minimal charges during the process. FHA financial loans demand a minimum 3.5% financial commitment from the applicant. The mortgage does allow for the home seller to pay all costs of closing, anywhere up to 6% which is normally enough to take care of almost any home sale.
• Not Difficult to Qualify – Pre-Qualifying for a Florida FHA mortgage loan is rather straight forward. Since it is the FHA that insures your mortgage loan, the financial institutions and lending institutions make it easy for everyone to qualify when they meet the standard requirements. The key components in qualifying are usually credit ranking, earnings and job history.
• Adjustable Rate Option – The FHA mortgage loan originated as a result of tight financial constraints of first time home buyers. This is exactly why the FHA has an adjustable rate option for home buyers, which has a surprisingly low payment and interest rate.
• There are no cash reserves required – In comparison to other conventional loan programs, Florida’s FHA home mortgage is a pretty appealing option for Panama City, FL first-time home owners which have a little bit of funds in the bank.
First Time buyers need to know what to expect before starting the FHA loan application process. Simply being prepared will often enhance your chances in successfully getting the FHA mortgage accepted. Below we list some steps and points to consider.
In advance of application:
1. Debt-to-income ratio
Thorough examination has to be done at this stage. Creditors differ on specific amounts, but a financial debt load thatâ€™s above 41 to 45 percent is risky for an FHA loan. You absolutely need 2 years of regular employment without unexplained interruptions in job history.
2. Credit History
It is typically the small things which can damage your credit history. Check your income source, overall credit score, along with rent history which could show up on a credit report. Get everything on the up and up, shooting for a clean record.
3. Credit scores
As of 2013, a credit rating of 620 or higher is needed for a 3.5% down payment with the FHA. For those who came out of a bankruptcy or foreclosure, you would need to have maintained a perfect credit worthiness since that time (4 years and 5 years respectively) irregardless of present credit worthiness.
FHA Mortgage Loan Application:
• Complete the Buyer Information form, which tells us just what you have and just what you want. It will allow the FHA mortgage consultant get in touch with you to discuss your goals. Soon after a full mortgage application must be filled out that highlights all about you, the applicant, which is to be used in finding out whether you are qualified to receive a loan or otherwise. The rate and terms of the loan can also be driven largely by the data in your loan application form, credit score, etc.
• In case the loan application is preapproved, you get the disclosure records that are essentially initial loan records that have all the minute details regarding the terms, home interest rates, selling price and repayments of the mortgage loan.
• This needs to be signed and brought back along with other records like bank account documents, IDs, references, etc., for verification purposes. These documents are prepared and readied before the loan application is submitted to the mortgage company.
• The processor double checks all confirming written documents and may ask for missing documents from you if needed.
• When completed, the documents will be submitted to the underwriter.
• The loan underwriter will be sending a Conditions List of additional missing items or docs to the buyer.
• Once the buyer completes the desired items outlined, it is sent back to the lender for final consent. A closing date is then scheduled.
Notice: After in contract on a home, the entire loan closure process can take around three weeks to a month.
Questions or concerns? Be sure to call us, 7 days a week at 800-871-2636 or simply just fill out the speedy info request form on the right side of our home page at http://fivestarsmortgage.com. Homeowners that currently have an FHA mortgage can read about the FHA streamline refinance program here – http://fivestarsmortgage.com/florida-fha-loan/. Homebuyers living in more rural locations in Florida can learn more about the 100% USDA home loan at www.usdamortgagesource.com