The Florida FHA mortgage has become the first option to the majority of first time home buyers in Florida. Florida’s FHA home loan program offers several benefits, bearing in mind the budget limitations of many homeowners who are considering purchasing their first residence. In comparison with other traditional home mortgages, the FHA home loan eases the process to the loan applicant. Besides that the FHA mortgage loan calls for a fairly low down payment, which makes it much simpler for homeowners that may have trouble saving up the large down payment necessary by standard mortgage loans.
What are the most important benefits in obtaining an FHA loan in Shalimar?
• Secure fixed interest rates – One of the biggest advantages of a Florida FHA loan is the provision of paying a fixed 15 or 30 year interest rate. In comparison to other standard loans in which the interest rates fluctuate, the rate continues to be the same for the entire duration of the mortgage loan. This timeframe is often for 30 years. Due to this provision the borrower can prepare their specific predetermined monthly payment beforehand.
• Small down payment – The Government insures or backs FHA loans, therefore the applicant incurs very nominal charges in the process. FHA financial loans require a minimum 3.5% investment from the applicant. The mortgage loan does make it possible for the home seller to pay for all costs of closing, up to 6% which can be typically enough to take care of virtually any property purchase.
• Quick to Qualify – Prequalifying for a Florida FHA mortgage loan is quite simple. Since it is the FHA that insures your house loan, the lenders and banks make it feasible for anybody to qualify that meets the primary requirements. The most important elements of qualifying are generally credit history, cash flow and job history.
• Adjustable Interest Rate Option – The FHA home loan started mainly because of the limited budget constraints of first-time home owners. This is why the FHA features an adjustable rate option for home buyers, which has a very low payment and interest rate.
• There won’t be cash reserves required – In contrast to other standard loan programs, Florida’s FHA mortgage is a really attractive option for Shalimar first time home-owners who have a small amount of funds saved.
First-time purchasers need to learn what to expect before starting the FHA mortgage application process. Being prepared will usually better your chances in successfully having your FHA loan accepted. Here we list some steps and issues to consider.
1. Debt-to-income ratio
Mindful research needs to be done at this point. Mortgage companies fluctuate on specific amounts, despite the fact that a debts load that is greater than 41 to 45 percent is high-risk for an FHA loan. You will need two years of continual employment without any unexplained gaps in job history.
2. Credit History
It is normally the tiny problems which can hurt your credit history. Check your income, credit history, together with rent history which can be displayed on a credit file. Get all of it handled, concentrating on a fully clean record.
3. Credit scores
In 2013, a credit score of 620 or higher is required for the 3.5% down payment with the FHA. In case you came out of a bankruptcy or foreclosure, you must have kept a perfect credit score since that time (4 years and 5 years respectively) irregardless of existing credit worthiness.
FHA Mortgage Application:
• Fill out the Buyer Information request, that lets us know just what you have along with what you will want. It will permit the FHA mortgage professional to contact you to discuss your goals. Soon after a full application will need to be done that highlights all about you, the applicant, which will be used for trying to figure out whether you are qualified to receive a mortgage or otherwise. The interest rate and loan terms will also be determined largely by the info in the application form, credit rating, etc.
• In the event the loan application is preapproved, you will get the disclosure documents which are essentially initial loan documents that have all the minute details regarding the terms, interest rates, cost and payments of the mortgage.
• This needs to be signed and returned along with other documents such as your bank documents, IDs, references, etc., for validation purposes. Usually these documents are prepped and readied way before the loan application is sent to the loan provider.
• The processor double checks all confirming papers and may request absent records from you if required.
• When completed, the records are sent to the loan underwriter.
• The loan underwriter will send a Conditions List of more missing items or docs to the home buyer.
• After the buyer finishes the required items on the list, it is returned to the lender for final consent. A closing day is then established.
Note: Once you are in contract on a property, the whole loan closing process normally takes about 3 weeks to a month.
Questions? Please be sure to call us, 7 days a week at 800-871-2636 or simply complete the easy information request form on the right side of our home page at http://fivestarsmortgage.com. Property owners that currently have an FHA mortgage loan can read about the FHA streamline refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Home buyers located in more rural locations in Florida can read about the 100% USDA mortgage loan at www.usdamortgagesource.com