In order to better your chances in successfully getting your FHA loan approved here it always helps to be well-informed.
You have to be aware of what you need do before applying as well as know the process of your application, the documents required, and finally, the closing which is where you are righteously given the keys to your new house.
Before application:
1. Debt-to-income ratio
Careful analysis has to be done here. Lenders vary on precise amounts but a debt load that’s higher than 41 to 45 percent is risky for an FHA loan. You will need two years of employment without a decline in pay.
2. Credit check
It’s usually the small things that bite and bring you down so dig deep. Check your income, credit, as well as rent history (paying rent to parents to board in their home does not qualify, mind you) that might show up on a credit report. Get everything on the up and up, aiming for a clean record.
3. Credit score
A credit score of 620 or better would be ideal for the 3.5% down payment FHA. If you came out of a bankruptcy or foreclosure, you would need to have maintained a perfect credit since then (4 years and 5 years respectively).
Application proper:
4. Fill out the Buyer’s Information request which tells the lender what you have and what you need.
This will aid the lender in creating a customized strategy to aid you in attaining FHA approval. An application will have to be filled out that detail everything about you, the borrower, which will be used in figuring out whether you’re eligible for a loan or otherwise. The rate and the terms of the loan will also be determined largely by the information in your application form.
5. In the event the 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 loan.
6. This has to be signed and returned along with other documents such as your bank statements, IDs, references, etc., for verification purposes. Usually these documents are prepped and readied well before the loan application is submitted to the lender.
7. The processor reviews all verifying documents and requests for missing or any additional documents from the borrower if need be.
8. Upon completion, the documents are then submitted to the underwriter.
9. The underwriter will send a Conditions List of additional missing items or documents to the buyer.
10. Once the buyer completes the needed items on the list, it’s sent back to the lender for final approval. A closing date is then set.
Note: The whole application process takes about 3 weeks to a month until closing date.
Questions? Please visit our web site at www.FhaMortgageSource.com or call us 7 days a week at (904) 302-6060
Serving all of Florida Including the Panhandle - Escambia County - Pensacola FL, Bay County Panama City Beach, Leon County - Tallahassee FL
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