Buying a home in the U.S. is no more daunting as an FHA loan is there to support you in realizing your dream of buying a home. Guaranteed by the Federal Housing Administration and offered by the FHA-approved lenders, this loan is popular among low-moderate income group people. It is because the loan comes with a lenient requirement that is easy to fulfill than other home loan programs.
Don’t you have prior experience in applying for a home loan program? Do you want to know about the FHA loan requirements Texas? To help you, here, we have put together the common FHA home loan requirements that to have to fulfill to get the loan approval –
Down payment requirement
With an FHA loan, the down payment requirement is lower than other loan programs. But like other loans, the requirement depends on the credit score. With a decent credit score, the minimum down payment is 3.5%. However, if your score is poor, borrowers will have to come with a minimum 10% down payment. But the requirement varies from a lender to another one. So, it would be better to ask your lender about this and proceed accordingly.
The FHA lenders pay attention to your debt-to-income ratio. Also known as DTI, it measures the percentage of your pre-tax income, which you expend on monthly debt payments, along with the mortgage, credit cards, student loans, and other obligations. The FHA requires a debt-to-income ratio of 50% or less. But the requirements may vary based on your credit score and other factors.
There is no minimum or maximum salary that you can qualify or prevent you from getting an FHA-insured mortgage. But being a homebuyer, you should have at least two established credit accounts and account for cash gifts that help you with the down payment. And you should not have delinquent federal debt or judgments, or debt associated with past FHA-insured mortgages.
When you apply for an FHA home loan program, you need to come with a few documents You should show proof of a Social Security number and provide your original pay stubs, valid tax returns or W-2 forms when needed. Besides, there are requirements for other documents too. You should ask the lender about this and arrange the documents that he or she asks for.
FHA property requirements
Along with other qualifications, the property itself needs to meet certain requirements before you qualify for this home loan program. You can apply for the loan only for a principal residence, and at least one borrower needs to occupy the property within 60 days of closing. Your property should not be an investment property. Your property can not be a flip. It means you can’t buy a house within 3 months of prior sale. You should take the title to the property in your own name or the name of a living trust at settlement.
As you are now familiar with the requirements to meet, fulfill these, and go a step closer to your dream.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.