The Florida FHA mortgage has become the first choice to many first time homebuyers in the State of Florida. Florida’s FHA mortgage loan program provides several advantages, paying attention to the financial limitations of many homeowners who are considering buying their very first home. In comparison to other traditional mortgage loans, the FHA home loan eases the process to the applicant. On top of that the FHA mortgage calls for a rather low down payment, which makes it less difficult for homeowners that may have problems saving for the substantial down payment necessary by customary mortgage loans.
What are the huge advantages in obtaining an FHA loan in Lake Monroe, FL?
• Secure fixed interest rate – One of the best advantages of the Florida FHA mortgage loan is the provision of paying a fixed 15 or 30 year interest rate. In contrast to other standard loans in which the loan interest rates fluctuate, the rate remains the same for the total duration of the mortgage. This period is generally for 30 years. Due to this provision the borrower can plan their fixed monthly payment up-front.
• Minimum down payment – The Federal government guarantees or supports FHA loans, which means the applicant incurs very minimal fees during the process. FHA loans need a minimum 3.5% investment from the borrower. The loan does support the home seller to cover all closing costs, as much as 6% which can be often enough to cover virtually any home purchase.
• Not Difficult to Qualify – Pre-Qualifying for a Florida FHA loan is pretty simple. Because it’s the FHA that insures your home loan, the loan providers and lending institutions make it straightforward for anybody to qualify when they meet the central requirements. The main components of qualifying are usually credit score, income source and employment.
• Adjustable Interest Rate Option – The FHA loan began due to limited budget restrictions of first time home buyers. Because of this the FHA has an adjustable rate option for home buyers, which will incorporate a surprisingly low monthly repayment and interest rate.
• There are no cash reserves required – In comparison with numerous traditional home loan programs, Florida’s FHA home loan is a particularly attractive option for Lake Monroe first time homeowners who have a small amount of funds saved.
First-time purchasers need to know what to expect before starting the FHA mortgage loan application process. Being prepared will always raise your opportunities in successfully having your FHA home loan approved. Below we list a number of steps and some things to consider.
Prior to application:
1. Debt-to-income ratio
Cautious analysis has to be done at this point. Mortgage companies vary on exact amounts, still a financial debt load that is higher than 41 to 45 percent is high-risk for an FHA loan. You will need two years of consistent employment without having any unexplained interruptions in job history.
2. Credit Check
It is usually the tiny problems which may harm your credit score. Check your income, credit worthiness, as well as rental history which could be displayed on a credit report. Get everything taken care of, aiming towards a fully clean record.
3. Overall credit score
As of 2013, a credit rating of 620 or better is required for the 3.5% downpayment with the FHA. If you have had a bankruptcy or foreclosure, you would need to have maintained a perfect credit worthiness since then (4 years and 5 years respectively) irregardless of current credit score.
FHA Mortgage Loan Application:
• Fill out the Buyer Information request, which tells us what you have and what you may need. This will allow the FHA loan specialist to get hold of you to discuss your primary goal. Subsequently a full application will have to be done that details everything about yourself, the applicant, which is to be used for finding out whether you are qualified to receive a loan or otherwise. The interest rate and loan terms can also be determined largely by the info in the application form, credit report, etc.
• In the event the application is pre-approved, you will get the disclosure docs which are essentially initial loan documents that have all the minute details regarding the terms, rates of interest, cost and payments of the mortgage.
• This has to be agreed upon and returned along with records like you bank account statements, IDs, individual references, etc., for verification purposes. Usually these documents are prepared and readied well before the mortgage loan application is sent to the loan provider.
• The processor reviews all confirming papers and may ask for missing docs from the borrower if need be.
• When completed, the documents will be submitted to the loan underwriter.
• The loan underwriter sends a Conditions List of even more missing items or records to the home buyer.
• When the buyer completes the required items on the list, it is returned to the mortgage lender for final acceptance. A closing date is then established.
Notice: After in contract on a residence, the full loan closing process normally takes roughly three weeks to a month.
A lot of questions? Be sure to call us, 7 days a week at 800-871-2636 or just submit the speedy info request form on the right side of our home page at http://fivestarsmortgage.com. Home owners that presently have an FHA mortgage can learn about the FHA streamline refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Homebuyers living in more rural locations in Florida can learn about the 100% USDA mortgage at www.usdamortgagesource.com