The Florida FHA mortgage has become the best solution to the majority of first time home buyers in the State of Florida. Florida’s FHA mortgage loan program features several benefits, bearing in mind the funding limitations of many homeowners who are considering buying their very first residence. In comparison with most traditional mortgage loans, the FHA loan eases the purchasing process to the loan applicant. In addition the FHA mortgage consists of a rather low down payment, which makes it a lot easier for homeowners that may have difficulties saving up the big down payment necessary by common loans.
What are the most important advantages in acquiring an FHA loan in Naples, FL?
• Secure fixed loan interest rates – One of the largest advantages of your Florida FHA loan is the provision of having a fixed 15 or 30 year interest rate. In comparison with other basic loans where the loan interest rates vary, the rate continues to be the same for the full duration of the mortgage. This period is often for 30 years. Due to this provision the consumer can map out their specific fixed monthly payment beforehand.
• Minimal down payment – The Federal government insures or backs FHA loans, which means the applicant incurs very nominal fees during the process. FHA home loans need a minimum 3.5% investment from the applicant. The loan does make it possible for the property seller to pay all costs of closing, up to 6% which can be often enough to cover almost any home sale.
• Easy to Qualify – Pre-Qualifying for a Florida FHA loan is quite simple and easy. Since it is the FHA that insures your house loan, the lenders and banks make it easy for anyone to qualify when they meet the necessary requirements. The main elements of qualifying are credit history, income and employment records.
• Adjustable Rate Option – The FHA loan originated because of the stretched financial constraints of first time home buyers. This is exactly why the FHA has got an adjustable rate option for home buyers, which will incorporate a rather low payment amount and interest rate.
• There are no cash reserves required – When compared to numerous conventional home loan programs, the Florida FHA mortgage loan is a highly appealing option for Naples first-time home owners which have a little bit of funds in the bank.
First Time home buyers should find out what to expect before starting the FHA home loan application process. Being prepared will always raise your opportunities in successfully getting the FHA loan accepted. Below we list a few steps and issues to consider.
Prior to application:
1. Debt-to-income ratio
Thorough study should be done at this point. Mortgage lenders differ on exact amounts, still a debts load that is greater than 41 to 45 percent is risky for an FHA loan. You need 2 years of continual employment without having any unexplained breaks in employment history.
2. Credit History
It is usually the small things which could damage your credit ratings. Look at your earnings, credit ranking, together with rent history which may show on a credit report. Get all of it handled, aiming towards a clean record.
3. Credit rating
As of 2013, a FICO score of 620 or higher is required for the 3.5% down payment with the FHA. In the event you have had a bankruptcy or foreclosure, you would need to have preserved a perfect FICO score since then (4 years and 5 years respectively) irregardless of current credit rating.
FHA Mortgage Loan Application:
• Complete the Buyer Information request, which lets us know just what you have and what you want. This will allow the FHA loan specialist to call you to discuss your goals. Later on a full application should be filled out that highlights all things about you, the applicant, which is used in finding out whether you are eligible for a home loan or otherwise. The rate and loan terms will also be driven largely by the info in your application form, credit ranking, etc.
• In case the application is preapproved, you get the disclosure docs that are essentially initial loan records which have all the minute details in connection with terms, mortgage rates, selling price and installment payments of the mortgage.
• This has to be signed and returned along with other records such as your bank account records, IDs, individual references, etc., for validation purposes. These documents are prepared and readied way before the mortgage loan application is submitted to the mortgage lender.
• The processor reviews all confirming written documents and might request missing paperwork from you if necessary.
• Upon completion, the written documents will be sent to the loan underwriter.
• The underwriter will be sending a Conditions List of even more missing items or docs to the buyer.
• After the buyer finishes the needed items outlined, it is sent back to the lender for final acceptance. A closing date is then scheduled.
Notice: After in contract on a residence, the entire loan closure process takes close to three weeks to a month.
Questions or concerns? Please make sure to call us, 7 days a week at 800-871-2636 or just submit the speedy information 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/. Buyers living in more rural places in Florida can learn about the 100% USDA mortgage at www.usdamortgagesource.com