A Federal Housing Administration (FHA) loan is much easier to qualify for as compared to a conventional loan. All you need is a valid Social Security number, a minimum credit score of 500, a favorable debt-to-income ratio, an FHA approved property appraisal, and of course, be a legal resident of suitable age. There are various 2019 FHA loan guidelines that you can follow in order to apply for such a loan; however, you must be aware of the requirements before you apply. Let’s examine these requirements for 2019 in detail:
Your credit score matters a great deal when looking for a mortgage loan. A lower credit score not only leads to higher down payments but also lessens your chances of finding a lender who is willing to process your loan. This is where The Lenders Alliance can help you buy a home.
A credit score of 500 will typically get you an FHA bad credit mortgage loan with a down payment of 10%, and that too, if you’re able to find a bad credit mortgage lender. If you can bring your credit score up to 580, you may be able to obtain a loan with a down payment of 3.5%.
To qualify for an FHA loan, your debt-to-income ratio should not be more than 57% after adding your mortgage loan. For instance, if your income is $3000 per month and your car installment is $700, then the FHA loan will come out to $1010, and the debt-to-income ratio will be approximately 56.9% or less, making you eligible for the loan.
Income and Property Requirements
While there are no stringent income requirements, you still need to show that you are employed and have a two-year overall employment history. You may also be required to show that there aren’t any unpaid debts or federal taxes on your part.
As far as property requirements are concerned, the property you intend to purchase must be your main residence, and a borrower should move in there within 60 days of the purchase. There are several property requirements that an Alliance Member will be happy to review with you.
The FHA requires a mortgage insurance premium of 1.75% of the loan amount that is included in the loan, as well as an annual premium, which is typically paid on a monthly basis in your escrow account.
Are you planning on applying for an FHA loan? Click here to request more information from an Alliance member.