The Florida FHA mortgage has become the best option to most first time homebuyers in Florida. The Florida FHA mortgage loan program presents several benefits, keeping in mind the budget difficulties of many homeowners who are considering purchasing their very first home. In comparison to most conventional home mortgages, the FHA mortgage loan eases the buying process for the loan applicant. On top of that the FHA loan requires a fairly low down payment, which makes it simplier and easier for homeowners that may have problems saving for the considerable down payment necessary by customary mortgage loans.
What are the biggest benefits in getting an FHA loan in St. Augustine Beach, FL?
• Secure fixed loan interest rate – One of the leading advantages for the Florida FHA mortgage loan is the provision of paying a fixed 15 or 30 year rate of interest. When compared with other conventional loans in which the interest rates can vary, the rate stays the same for the entire span of the mortgage loan. This period is generally for 30 years. Because of this provision the consumer can pre-plan their fixed monthly payment before hand.
• Minimum down payment – The Government insures or supports FHA loans, therefore the applicant has very nominal fees during the process. FHA mortgage loans need a minimum 3.5% investment from the borrower. The mortgage does make it possible for the property seller to pay all closing costs, as much as 6% which is generally enough to take care of virtually any property purchase.
• Simple to Qualify – Prequalifying for a Florida FHA mortgage loan is rather simple and easy. Because it’s the FHA that covers the home loan, the financial institutions and mortgage lenders make it straightforward for anyone to qualify when they meet the central requirements. The main elements of qualifying usually are credit ratings, cash flow and employment history.
• Adjustable Rate Option – The FHA home loan started mainly because of the tight financial restrictions of first time home owners. For this reason the FHA has got an adjustable rate option for home buyers, which has a very low payment amount and interest rate.
• There are no cash reserves required – As compared with many traditional mortgage programs, the Florida FHA mortgage is a really enticing option for St. Augustine Beach first-time home owners that have a little money saved.
First-time home buyers have to know what to expect before beginning the FHA loan application process. Being prepared will often boost your opportunities in successfully getting the FHA mortgage loan accepted. Below we have listed a few guidelines and factors to consider.
1. Debt-to-income ratio
Thorough examination must be done at this point. Lenders vary on specific amounts, despite the fact that a financial debt load that is greater than 41 to 45 percent is high risk for an FHA loan. You should have 2 years of regular employment devoid of unexplainable gaps in job history.
2. Credit History
It is normally the tiny problems that could hurt your credit. Check your earnings, overall credit score, as well as rental history that may show up on a credit score. Get everything handled, focusing on a thoroughly clean record.
3. Credit ratings
In 2013, a FICO score of 620 or higher is necessary for a 3.5% downpayment with the FHA. If you have had a bankruptcy or foreclosure, you would need to have maintained a perfect credit rating since that time (4 years and 5 years respectively) irrespective of recent credit score.
FHA Loan Application:
• Complete the Buyer Information form, that tells us what you have along with what you want. This will allow the FHA mortgage loan specialist to contact you to discuss your objectives. Later a full mortgage application will have to be completed that details everything about yourself, the borrower, which will be used for trying to figure out whether you are qualified to receive a home loan or otherwise. The rate and loan terms may also be determined largely by the details in the application form, credit scores, etc.
• In the event the application is pre-approved, you get the disclosure docs which are essentially initial loan records that contain all the minute details with regards to the terms and conditions, interest levels, selling price and monthly payments of the mortgage.
• This should be agreed upon and returned along with other documents like bank documents, IDs, personal references, etc., for verification purposes. These documents are prepped and readied ahead of the loan application is submitted to the mortgage company.
• The processor reviews all validating records and might request absent paperwork from you if need be.
• Upon completion, the records are then submitted to the loan underwriter.
• The underwriter will send a Conditions List of even more missing elements or docs to the purchaser.
• Whenever the buyer completes the desired items on the list, it is delivered back to the lender for final affirmation. A closing day is then set.
Please Note: When you are in contract on a property, the whole loan closing process usually takes about three weeks to a month.
Questions? Please make sure to call us, 7 days a week at 800-871-2636 or simply just submit the fast info request form on the right side of our home page at http://fivestarsmortgage.com. Homeowners that presently have an FHA mortgage loan can read about the FHA streamline refinancing program here – http://fivestarsmortgage.com/florida-fha-loan/. Buyers residing in more rural places in Florida can learn more about the 100% USDA home loan at www.usdamortgagesource.com