A modern style house in the Canberra suburb of...

Image via Wikipedia

71. WHO CAN QUALIFY FOR FHA LOANS

anyone who meets the credit requirements, can afford the mortgage payments and cash investment, and who plans to use the mortgaged property as a primary residence may apply for an FHA-insured loan.

72. WHAT IS THE FHA LOAN LIMIT?

FHA loan limits vary throughout the country. The loan maximums for multi-unit homes are higher than those for single units and also vary by area.

Because these maximums are linked to the conforming loan limit and average area home prices, FHA loan limits are periodically subject to change. Ask your lender for details and confirmation of current limits.

73. WHAT ARE THE STEPS INVOLVED IN THE FHA LOAN PROCESS?

With the exception of a few additional forms, the FHA loan application process is similar to that of a conventional loan (see Question 47). With new automation measures, FHA loans may be originated more quickly than before. And, if you don’t prefer a face-to-face meeting, you can apply for an FHA loan via mail, telephone, the Internet, or video conference.

74. HOW MUCH INCOME DO I NEED TO HAVE TO QUALIFY FOR AN FHA LOAN?

There is not a minimum income requirement. But it is necessary to prove steady income for a minimum of  three years, and demonstrate that you’ve consistently paid your bills on time.

75. WHAT QUALIFIES AS AN INCOME SOURCE FOR THE FHA?

Seasonal pay, child support, retirement pension payments, unemployment compensation, VA benefits, military pay, Social Security income, alimony, and rent paid by family all qualify as sources of income. Part-time pay, overtime, and bonus pay also count as long as they are steady. Special savings plans-such as those set up by a church or community association – qualify, too. Income type is not as important as income steadiness with the FHA.

76. CAN I CARRY DEBT AND STILL QUALIFY FOR FHA LOANS?

Yes. Short-term debt doesn’t count as long as it can be paid off within 10 months. And some regular expenses, like child care costs, are not considered debt. Talk to your lender or real estate agent about meeting the FHA debt-to-income ratio.

77. WHAT IS THE DEBT-TO-INCOME RATIO FOR FHA LOANS?

The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt. With a conventional loan, this qualifying ratio allows only 28% toward housing and 36% towards housing and other debt

78. CAN I EXCEED THIS RATIO?

You may qualify to exceed if you have:

 -   a sizable down payment
 -   a demonstrated ability to pay more toward your housing expenses
 -    large cash reserves
 -   net worth enough to repay the mortgage regardless of income
 -   evidence of acceptable credit history or limited credit use
 -   less-than-maximum mortgage terms
 -   funds provided by an organization
 -   decrease in monthly housing expenses

79. HOW LARGE A DOWN PAYMENT DO I NEED WITH AN FHA LOAN?

You must have a down payment of at least 3% of the purchase price of the home. Most aloan programs offered by private lenders require between a 3%-5% down payment, with a minimum of 3% coming directly from the borrower’s own funds.

80. WHAT CAN I USE TO PAY THE DOWN PAYMENT AND CLOSING COSTS OF AN FHA LOAN?

Aside from your own funds, you could  use cash gifts or money from a private savings club. If you  are capable of doing certain repairs and improvements yourself, your labor may be used as a portion  of the down  payment (called -sweat equity”). If you are doing a lease purchase, paying extra rent to the seller may also be considered the same as accumulating cash.

Buying your first home? Give me a call, Carlos J. Amador at (714) 626-8880 ext 117 or visit my website at http://www.carlosjamador.com . For a no obligation free consultation.

Free first time home buyer information for Fullerton, Orange County, and Los Angeles residents. Real Estate information for Fullerton, Orange County and Los Angeles residents. Home Sellers in Fullerton, Orange County, and Los Angeles.

Source:hud.gov

Advertisements