TENNESSEE FHA LOAN GENERAL INFORMATION
FHA stands for the Federal Housing Administration. Congress created FHA in 1934 to help homebuyers obtain financing for new home purchases. FHA does this by insuring mortgages for single family and multifamily homes. FHA mortgage insurance provides FHA mortgage lenders with protection against a loss if a FHA homeowner defaults on their loan. The loans must meet requirements established by the FHA to qualify for this insurance. FHA has insured over 34 million homes since 1934. FHA is the insurer of mortgages in the world. In Middle Tennessee and East Tennessee the maximum loan amount for a single family FHA home loan is $270,050, as of June 2012.
I can help you get approved for an FHA loan throughout the state of Tennessee
BENEFITS OF AN FHA LOAN
ØIt is easier to qualify for an FHA loan in most cases. This is because the lender has less risk of a loss in case of default. Even a homebuyer with past credit problems, such as bankruptcy, foreclosure or short sale may qualify for a FHA mortgage.
ØLow down payment. A FHA loan only requires a down payment of 3.5%. Other loan programs often require a larger down payment.
ØLower interest rates. FHA loans have competitive rates and are often lower than conventional loans because the loans are insured by the Federal Government.
Because of these benefits a FHA loan can be the best choice for many home buyers. An FHA loan can also be an ideal program for first time buyers.
GENERAL GUIDELINES TO QUALIFY
ØMortgage payments should be about 35% (or less) of the applicant’s total gross income. Total finance payments, including credit cards, auto payments and other monthly obligations should be 50% or less.
Ø You should have at least two years of steady employment, preferably with the same employer.
Ø Your income must be steady or increasing.
Ø You can have one Federal insured loan open at one time.
Ø You need two lines of credit.
ØIf the borrower has a Chapter 7bankruptcy it must be at least two years old. In addition good credit must have been re-established since the bankruptcy. A chaper 13 bankruptcy only needs to be 1 year old, as long as all payments have been made on time.
Ø Foreclosures generally must have been at least three years ago.
ØCollections will sometimes need to be paid off as a condition to a loan. Judgments will have to be paid in full prior to closing. Applicants that are delinquent on any federal debt, (student loan, tax liens, etc.) are not eligible for a FHA loan. There is no specific credit score requirement. The lender will be most concerned about credit history for the last 2 years. There should not be any payments 30 days late in the last 12 monthsrecencly most lenders have increased their credit score requirements to a minimum of 640.
HOW TO APPLY FOR A FHA LOAN
I have been helping obtain FHA financing since 1998 and would be happy to assist you as well. Texas You can give me a call at 866-435-6553 or apply online here.
While I love the flexibilty offered by FHA loans, they are not always the best options for all home buyers. When we talk, I will go over your situation with you and help you find the best loan program to accomplish your goal of home ownership.