Federal Housing Administration home loans are intended for borrowers with a low to moderate income. They have a lower minimum down payment and credit score requirement than many traditional loans. Because of its numerous advantages, FHA loans are popular among first-time homebuyers. While the government insures these loans, they are only available through mortgage lenders that have been approved by the FHA.
FHA loans have fixed interest rates and are available in 15-year and 30-year durations. The agency’s broad underwriting rules are intended to assist borrowers who do not have perfect credit, a high income, or substantial financial reserves in order to become homeowners.
What Is Needed For A FHA Loan?
To qualify, you’ll need a credit score of at least 620. With an FHA loan, you can borrow up to 96.5 percent of the home’s value if you have a good credit score. This means you’ll only have to pay a 3.5 percent down payment. 1 percent or possibly less with down payment assistance.
All FHA loans require the borrower to pay both an upfront mortgage insurance premium and a monthly premium. The upfront mortgage insurance premium is typically rolled into the loan.
At least two years must have passed since the applicant underwent a bankruptcy event to qualify for an FHA loan—or any sort of mortgage. If you’ve had a bankruptcy or foreclosure, you can still qualify for an FHA loan as long as you’ve rebuilt your credit. It’s vital to remember that, in general, the lower your credit score and down payment, the higher your mortgage interest rate will be.
You must have a stable employment history or have worked for the same employer for the past two years, and your lender must be an FHA-approved lender.
These are just a few of the requirements to qualify for an FHA Home Loan. There are many other factors that lenders will want to look at before approving a loan.
Qualified FHA Home Mortgage Lenders
While the government insures these loans, they are only available through mortgage lenders that have been approved by the FHA. FHA loans are accessible from a wide range of lenders, including major banks and credit unions, as well as community banks and independent mortgage lenders.
InterWest Mortgage is an FHA-approved lender with a knowledgeable staff and access to a wide selection of mortgage options. We are committed to helping each customer obtain the best loan with the greatest rates, terms, and fees to match their specific needs. We’re excited to put our lending expertise to work for you.