The Florida FHA mortgage has become the best choice to most first time homeowners in the State of Florida. The Florida FHA loan program offers several benefits, bearing in mind the financial constraints of many homeowners who are interested in buying their first residence. When compared with most conventional mortgage loans, the FHA home loan facilitates the purchasing process for the applicant. On top of that the FHA loan requires a fairly low down payment, which makes it less difficult for homeowners that may have problems saving for the considerable down payment needed by customary mortgage loans.
What are the most valuable pros to obtaining an FHA mortgage loan in Midway, FL?
• Secure fixed loan interest rate – One of the biggest advantages of the Florida FHA loan is the provision of having a fixed 15 or 30 year rate of interest. In comparison to other conventional loans in which the interest rates can vary, the rate stays the same for the full span of the mortgage. This period is typically for 30 years. Because of this provision the borrower can budget their predetermined monthly installment before hand.
• Lowest down payment – The Federal government insures or supports FHA loans, which means the applicant has very nominal charges along the way. FHA secured loans need a minimum 3.5% investment from the borrower. The mortgage loan does allow for the home seller to cover all costs of closing, up to 6% which is typically enough to handle just about any home sale.
• Quick to Qualify – Prequalifying for a Florida FHA mortgage loan is rather straightforward. Because it’s the FHA that covers your house loan, the loan providers and mortgage lenders make it easier for anyone to qualify when they meet the central requirements. The primary components in qualifying are credit ranking, earnings and employment history.
• Adjustable Interest Rate Option – The FHA loan originated due to tight budget constraints of first time home owners. This is exactly why the FHA has an adjustable rate option for home buyers, which entails a very low monthly repayment and interest rate.
• No cash reserves required – As compared with other conventional mortgage programs, the Florida FHA mortgage is a really attractive option for Midway, FL first-time homeowners that have a little money saved up.
First Time home buyers need to know what to expect prior to starting the FHA mortgage application process. Being prepared will usually better your chances in successfully getting the FHA mortgage loan approved. Below we list some steps and factors to consider.
Prior to application:
1. Debt-to-income ratio
Careful analysis needs to be done here. Loan providers differ on exact amounts, despite the fact that a debts load that is above 41 to 45 percent is high risk for an FHA loan. You will need two years of consistent employment without having unexplained gaps in job history.
2. Credit History
It is usually the tiny problems that could hurt your credit history. Check your earnings, credit score, together with rental history which could be displayed on a credit file. Get all things taken care of, aiming towards a thoroughly clean record.
3. Credit ratings
In 2013, a credit rating of 620 or greater is necessary for a 3.5% down payment with the FHA. For those who came out of a bankruptcy or foreclosure, you would need to have kept a perfect credit history since then (4 years and 5 years respectively) irrespective of existing credit score.
FHA Loan Application:
• Fill out the Buyer Information request, that lets us know what you have and what you require. This will permit the FHA mortgage professional to contact you to discuss your objectives. Later on a full mortgage application must be submitted that details everything about you, the purchaser, which is to be used in determining whether you are eligible for a home loan or otherwise. The rate and terms of the loan may also be identified largely by the details in your loan application form, credit report, etc.
• In the event the loan application is pre-approved, you get the disclosure records which are essentially initial loan records that have all the minute details with regards to the terms, loan rates, cost and payments of the mortgage loan.
• This has to be agreed upon and brought back along with other records like you bank account statements, IDs, individual references, etc., for validation purposes. These documents are prepped and readied way before the mortgage loan application is sent to the mortgage company.
• The processor double checks all verifying documents and may request missing documentation from you if needed.
• When completed, the documents will be sent to the loan underwriter.
• The underwriter will be sending a Conditions List of more missing items or documents to the purchaser.
• When the buyer completes the required items listed, it is returned to the lender for final authorization. A closing date is then set.
Note: When you are in contract on a residence, the whole loan closing process can take around 3 weeks to a month.
Have Questions? Please be sure to call us, 7 days a week at 800-871-2636 or simply just complete the fast information request form on the right side of our home page at http://fivestarsmortgage.com. Property owners that currently have an FHA loan can learn about the FHA streamline refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Buyers living in more rural places in Florida can learn about the 100% USDA mortgage loan at www.usdamortgagesource.com