The Florida FHA mortgage has become the best solution to most first time home buyers in Florida. Florida’s FHA loan program gives several benefits, bearing in mind the budget difficulties of most homeowners who are interested in buying their very first residence. In comparison to most conventional mortgage loans, the FHA loan eases the purchasing process for the loan applicant. In addition the FHA mortgage loan calls for a fairly low down payment, which makes it easier for homeowners that may have trouble saving for the large down payment needed by common mortgage loans.
What are the most common benefits in choosing an FHA mortgage loan in Palm Coast, FL?
• Secure fixed loan interest rate – One of the big advantages of the Florida FHA home loan is the benefit of having a fixed 15 or 30 year interest rate. When compared to other standard loans in which the loan interest rates can vary, the rate remains the same for the entire course of the loan. This period is commonly for 30 years. Due to this provision the consumer can map out their fixed monthly installment beforehand.
• Small down payment – The Government insures or supports FHA loans, which means the applicant incurs very minimal charges during the process. FHA secured loans must have a minimum 3.5% investment from the applicant. The loan does allow for the home seller to cover all costs of closing, anywhere up to 6% which is typically enough to handle almost any home purchase.
• Not Difficult to Qualify – Pre-Qualifying for a Florida FHA mortgage loan is pretty simple. Since it is the FHA that covers your house loan, the loan providers and lending institutions make it feasible for everyone to qualify that meets the simple requirements. The biggest components in qualifying are usually credit ratings, source of income and employment.
• Adjustable Rate Option – The FHA loan began due to limited financial constraints of first time home buyers. That’s why the FHA has an adjustable rate option for home buyers, which will incorporate a really low monthly repayment and interest rate.
• There are no cash reserves required – When compared to other standard loan programs, Florida’s FHA mortgage is a highly enticing option for Palm Coast, FL first time home owners which have a little bit of money saved.
First-time buyers need to learn what to expect prior to starting the FHA mortgage application process. Being prepared will often raise your odds in successfully having your FHA mortgage approved. Below we list a number of steps and some things to consider.
Prior to application:
1. Debt-to-income ratio
Cautious assessment should be done at this stage. Creditors vary on precise amounts, but a financial debt load that is higher than 41 to 45 percent is high-risk for an FHA loan. You absolutely need 2 years of continual employment without unexplained breaks in employment.
2. Credit History
It is generally the small things which will hurt your credit ratings. Examine your income, credit ranking, as well as rental history which may be displayed on a credit report. Get all the things handled, aiming towards a good record.
3. Credit scores
In 2013, a FICO score of 620 or better is necessary for the 3.5% down payment with the FHA. In case you came out of a bankruptcy or foreclosure, you would need to have kept a perfect credit worthiness since then (4 years and 5 years respectively) in spite of existing credit worthiness.
FHA Mortgage Application:
• Complete the Buyer Information request, which tells us what you have and just what you need. It will permit the FHA mortgage consultant to contact you to discuss your objectives. Later a full mortgage application should be filled out that highlights everything about you, the borrower, which is to be used for trying to figure out whether you are qualified for a mortgage loan or otherwise. The rate and loan terms can also be determined largely by the info in your application form, credit score, etc.
• In the event the application is pre-approved, you will get the disclosure records which are essentially initial loan documents which have all the minute details concerning the terms and conditions, rates of interest, cost and repayments of the mortgage.
• This needs to be signed and brought back along with other documents such as your bank account records, IDs, individual references, etc., for verification purposes. These documents are prepped and readied before the mortgage loan application is sent to the mortgage lender.
• The processor double checks all confirming records and might request absent records from you if needed.
• Upon completion, the written documents will be sent to the underwriter.
• The underwriter will be sending a Conditions List of further missing items or docs to the buyer.
• Once the buyer finishes the desired items outlined, it is returned to the mortgage lender for final approval. A closing day is then scheduled.
Notice: When you are in contract on a residence, the full loan closure process usually takes close to three weeks to a month.
Questions? Please be sure to call us, 7 days a week at 800-871-2636 or simply just submit the short 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 refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Buyers residing in more rural locations in The state of Florida can learn about the 100% USDA mortgage at www.usdamortgagesource.com