Many people with limited cash-to-close funds have been applying for FHA loans for decades. Since 1934, the FHA insured loans (loans backed by the Federal Housing Administration), but in more modern years as the FHA loan approval process became swifter, these loans are even more popular. Maybe you’re thinking of applying for an FHA loan, because the down payment requirement is just 3.5 percent. FHA mortgage rate are also nearly the same as the average interest rate on conventional loan. Maybe you’re thinking of applying for an FHA loan because your credit isn’t awesome. After all, many mortgages require a credit score of 620 or more, but people often get approved after applying for an FHA loan with a credit score at low as 580!
See, the goal of FHA loans is to help more potential buyers fulfill their dream of home ownership.
If you’re thinking of applying for an FHA loan, shop around. Keep in mind, not all lenders are licensed by the FHA to give out FHA-insured loans. Most lenders are these days, but not all lenders are.
Applying for an FHA Loan
If you’re applying for an FHA loan, the lender will need to see copies of your last two federal income tax returns, your last two paychecks, bank statements, and run a credit report for you. The credit report will show them your credit score (FICO) to see both if you qualify and what rate you qualify for. From there, they may ask you for more documents, the more swiftly you provide them, the more swiftly you will close.
For more information, here is the direct page for the FHA on the Housing and Urban Development page. Being informed ahead of time can help you avoid accidentally signing yourself up for dozens of unwanted phone calls a day from a myriad of different lenders. Then search for and call lenders directly, rather than signing up for a myriad of lenders to call you with quotes!
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