Undoubtedly one of man’s greatest dreams is to live in a house they can call their own. In fact, becoming a home owner in itself is regarded as a monumental landmark for many people. In our current economic environment, saving up for a down payment and qualifying for a loan has become harder than ever. For this reason, many home buyers are turning to the Federal Housing Administration to secure a Florida FHA loan for their new home.
FHA loans create an easier transition for home buyers as they provide you with some of the friendliest interest rates and down payment requirements. This can significantly reduce your mortgage payments each month and allow you to purchase a home years earlier. As they are supported and partly funded by the federal government, FHA lenders are beneficial to American families with less than high incomes.
Whether you are a first time or a third time buyer, the steps for taking out a FHA loan stays the same. By being mindful of these simple steps, you can make your journey towards becoming a homeowner far easier.
Save up – Making a decision to apply for a FHA loan means being conscious of how much money you have in the bank, and working hard to increase your current financial holdings. There is no other way to do this than by living beneath your means and saving up. Having the extra cash allows you to make a bigger down payment, and can cover all the other expenses involved in moving to a new house. Go online to a home mortgage calculator to get an idea on how much cash you need for a down payment. Try inputting larger and smaller down payments to see how they will affect your monthly payment.
Check your credit report – Like any other loan, FHA loans also look at your particular credit standing to gauge whether you are a good risk for them or not. This is why it is critical that you acquire a copy of your own credit report ahead of time. This gives you the advantage you will need to dispute any errors or miscalculations on your report as well as make improvements should you have a less than impressive credit score. Do this at least 6 months before you want to purchase a house, so that you have plenty of time to contact financial institutions for mistakes and set in place better money management, which will lift your scores.
Assess your budget – One of the most common mistakes many home buyers make is taking out a mortgage without first establishing their budget. This is actually one of the reasons many homes get foreclosed. Always think ahead and responsibly determine how much you can allocate each month for your payment.
Only go to approved FHA lenders – As FHA works through private lenders, it is important that you first verify if you are dealing with an approved FHA lender. This can save you a lot of time and disappointment. Also important, shop around. Talk to at least 3 lenders and choose the one that offers the most competitive rate and lowest closing fees.
The lender you choose will be able to walk you through the specific requirements for the government backed loan. Make the largest down payment possible to reduce the cost of the mortgage insurance premiums, while making sure to keep enough cash for moving expenses and an emergency fund. Make the largest down payment possible to reduce the cost of the mortgage insurance premiums, while making sure to keep enough cash for moving expenses and an emergency fund.
For an easy to use online home mortgage calculator and additional tips on FHA loans, check out MortgageCalculator.org. You’ll find definitive answers to your lending questions as well as be able to see the cost of different loan amounts with current interest rates.