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5 Tips You Can Use To Obtain An Approved FHA Loan

The Federal Housing Administration better known as the FHA offers loans to assist low as well as moderate income earning families in purchasing a home. FHA loans are backed federally and the FHA lenders must be approved by the “federal” government to service such loans. When they are compared to different types of “mortgages”, the FHA loans are easier to qualify for and offer affordability. These loans are the ideal choice for families who have tarnished credit histories or are on a very limited budget. Below are 5 tips to use to achieve an approved FHA loan.

Tip 1 Learn How To Apply

FHA loans have been associated with more relaxed requirements compared to the standard home loans. However, they too come with specific requirements and the applicant will need to meet up with these specific requirements to qualify. Some of these requirements will include:

•Your credit score will need to be at least 620 and you will have to prove you have been receiving the same income for a minimum of 2 years.
•FHA loans have been made available for only primary residency and you will have to intend to live in this property.
•You will need to have the money available to pay a down-payment, which is typically 3.5% of the total loan cost.

Tip 2 Set Up A Meeting With An FHA Approved Lender In Your Area

Not every lender can provide a FHA loan, only federally-approved lenders have the ability to offer these specialized loans. To find a suitable lender in your area you can visit the HUD (Housing and Urban Development) website to locate the closest lender in your area.

Tip 3 Save The Cash For The Down Payment

Nearly all types of home loans require some sort of down payment upfront while the FHA loans only require a smaller down payment. While it can vary from one location to another, FHA loans typically only allow a buyer a maximum of 96.5% in financing.

Tip 4 Sign Up For Mortgage Insurance

Due to the fact that you are only required to provide fewer than 5% of the loan cost in the form of a down payment, your loan is considered highly risky for the lender involved. You are required to obtain mortgage insurance by law to protect your lender. This insurance will cover the risks involved if you are unable to pay back on the loan. Find out about the rates for mortgage insurance that will apply to your area. In most cases your lender will be able to recommend a suitable insurance company.

The requirements on FHA loans state that you can finance the upfront payment on your mortgage insurance premium. However, your annual mortgage-insurance premium will not be able to be financed.

Tip 5 Prepare And Supply The Mandatory Documents

To apply for your FHA loan, you will need to supply certain documents to your FHA lender. These documents will include your personal information, credit information, your savings and your employment status. The documentation requires somewhat extensive and can include tax documents and job records. Make sure you prepare the following before approaching a FHA lender:

•Locations and addresses of properties you have resided in for the past 2 years.
•Your monthly salary amount, the names and addresses of your employers over the past 2 years.
•The last 2 years of your submitted tax forms.
•The last 2 years valid W2 forms.

Find out all about this information before approaching a lender so that you are well prepared when you do.

Home Loans Brisbane – Fish4Loans.com.au

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