FHA Home Loan Details St. Augustine

By
Mortgage and Lending with Coast2Coast Lending 165137

The FHA home loan has become the primary mortgage choice for many first time homebuyers in St. Augustine. The FHA loan program offers several benefits, keeping in mind the budget constraints of most homeowners who are interested in buying their very first home. Compared to most conventional mortgage loans, the FHA loan facilitates the buying process for the applicant. Furthermore,  the FHA loan involves a very low down payment, which makes it easier for homeowners to meet their budget constraints.  

  • Secure fixed interest rate– One of the biggest advantages of the FHA loan is the provision of paying a fixed 15 or 30-year rate of interest. Compared to other traditional loans where the interests vary, the interest rate remains the same for the entire course of the loan. This period is usually for 30 years. This detail allows the home buyer to plan their monthly expenses in advance.
  • Minimal down payment – The Federal government insures or backs FHA loans, therefore the borrower /applicant incur very minimal charges during the process. FHA loan requires a minimum 3.5% down payment from the home buyer. The loan does allow for the home seller to pay all closing costs, up to 6% which is generally enough to cover just about any home purchase.
  • Easy to qualify – Prequalifying for a Florida FHA loan is one of the simplest. Since it is the FHA that insures your house loan, the lenders and banks make it easy for anyone to qualify that meets the basic requirements. The main components of qualifying are credit and income/employment.
  •  There are no cash reserves required - Compared to most conventional loan programs, which make the FHA mortgage loan a very suitable option for Florida first time homeowners that have little savings.

First Time buyers need to know what to expect before starting the FHA loan application process. Being prepared will always improve the chances of loan approval. Below we have listed some steps and things to consider - 

Before application:

  • 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 consistent employment with no unexplainable gaps in employment.
  • Credit check
    It’s usually the small things that can hurt your credit. Check your income, credit, as well as rent history that might show up on a credit report. Get everything on the up and up, aiming for a clean record.
  • Credit score
    A credit score of 600 or better is needed 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) regardless of current credit score.

FHA Loan Application:

  • Fill out the Buyer’s Information request which tells us what you have and what you need. This will allow the FHA loan specialist to contact you to discuss your goals. Later a full 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, credit score, etc.
  • 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.
  • 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.
  • The processor reviews all verifying documents and requests for missing or any additional documents from the borrower if need be.
  • Upon completion, the documents are then submitted to the underwriter.
  • The underwriter will send a Conditions List of additional missing items or documents to the buyer.
  • 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.

 

Want to learn more?  Please contact Coast2Coast Lending by calling ph: 904-810-2293 or visit www.coast2coastlending.com

Happy to serve all buyers in Fla, GA, Ala, Va, TN - Jacksonville, St. Johns County

Posted by

Coast2Coast

Coast2Coast Lending serves home buyers throughout Fla, GA, TN, VA  - 7 days a week. Home purchase or refinance, please call us at Ph: (904) 810-2293. Also be sure to visit us at www.Coast2Coastlending.com for more information.

Comments (0)