Approved Your City FHA Lenders
An FHA-approved lender is a true asset for either a first time borrower or homeowner looking to refinance in Your City, Your State.
FHA lenders have access to both conventional and FHA mortgages , ensuring you will get the best possible loan.
One of the best decisions you can make when selecting a lender is making sure you choose an FHA approved lender.
FHA Home Lending Advantages
Your City FHA loans are excellent loans that allow borrowers access to some of the best interest rates and most popular programs. Additionally, FHA lenders are typically able to get borrowers who might not be approved for conventional loans into an FHA loan.
Advantages of Your City, Your State FHA Lenders:
- Access to both conventional as well as FHA loans
- Able to work with borrowers with less than perfect credit
- Can help with both purchase loans as well as refinancing
FHA loans are mortgages insured by the Federal government, providing lenders with slightly more confidence when lending. This confidence translates to lower interest rates and slightly more lenient requirements; making your decision even easier. Not all mortgage companies can offer FHA loans, so make sure the one you choose does.
FHA Home Lending
Qualifying for a Your State FHA mortgage is much easier than qualifying for a conventional loan through private banks. Most conventional loans expect superb credit, substantial income, and a large down payment. FHA mortgages, on the other hand, do not; it is our job to find the best rates on the market for you and we do that without asking for unreachable qualifications.
When qualifying for an FHA mortgage, a credit score of at least 620 is preferred. Additionally, it is ideal that your credit report does not reflect any more than two thirty-day late marks. Most conventional mortgage companies look for credit scores to be in at least the 700 range. Borrowing with an FHA loan can be of benefit to you if your credit score isn't quite as high and is at least a 620.
Income qualifications are not as strict with an FHA loan as they are with conventional mortgages. Most conventional mortgage loans will not let you exceed 28% of your gross monthly income when determining a monthly payment. This ratio is 30% with an FHA mortgage loan giving you more options if you have a lower income and cant meet the conventional 28%. For example, if your monthly gross income is $5,000, a conventional loan will not lend to you if you monthly payment works out to be higher than $1,400. With an FHA loan, this monthly payment can be as high as $1,500.
Down payments for an FHA loan are far less than conventional loans giving first time home buyers in Your City, Your State a fighting chance in this tough market. Most conventional mortgage companies want at least 5% of the sales price in down payment whereas an FHA mortgage loan only looks for 3.5% of the sale price. This difference can be the deciding factor when looking to get into your dream home. For a home that is $500,000, the FHA mortgage loans only ask for a down payment of $17,500 whereas a conventional mortgage lender will require at least $25,000. Thats a difference of $7,500!
FHA loans allow sellers to contribute double the amount of closing costs assistance than conventional mortgage loans. Conventional mortgages cap sellers closing cost assistance at $3,000 but an FHA loan will allow you to receive $6,000 in closing cost assistance. Closing costs include a variety of expenses including a loan origination fee, title search fee, prepaid interest, insurances, prorated taxes, etc. This can be a lot for a buyer to handle all at once so the seller closing costs assistance can be a huge help.
These days, buyers can have a fairly high debt-to-income ratio (the amount of debt you have to your monthly gross income) which can discourage conventional lenders from lending to you. However, FHA loans allow up to a 41% debt-to-income ratio whereas conventional mortgage lenders wont allow more than 36%.
In summary, FHA mortgage loans look for the following qualifying factors:
- A minimum credit score of 620
- No more than two thirty-day late marks on credit report
- Monthly payments not to exceed 30% of your gross monthly income
- 3.5% of property sale price in down payment
- Debt-to-income ratio not to exceed 41%
- Consistent employment over the past two years
- Steady or increasing income over the past two years
You can be approved for an Your City FHA loan with a credit score of just 620, two years of consistent employment, and with a down payment of as little as 3.5% of the property sale price. Other conventional mortgage loans will ask for a credit score in the 700′s, a lower debt-to-income ratio, and a higher down payment of at least 5%. Sometimes home buyers cant meet these criteria and need more options. Nevertheless, FHA mortgage lenders will work with you until they find a program that meets your situation.