It can be a real hassle sometimes when you are looking for information on FHA loan requirements and you have a hard time getting the full information you need. If you are seriously considering taking up an FHA loan, then learning more about the FHA loan requirements is the right way to go.After all, you would want to know if you meet the criteria before trying to apply for the loan.

Well, if you are reading this, you are in the right blog. This post will explain as clearly as possible the requirements that you may need to meet to qualify for an FHA loan. First of all, you may be glad to note that it is easier for your FHA loan application to be approved compared to other loans simply because it is created for first time home buyers who may not be able to afford the full 20% down payment for the home. My sister, Reese, will gladly testify to that as she is now a proud homeowner after she obtained an FHA loan to purchase her very first home even though she did not have the full 20% down payment for the property. The best part is that the FHA loan is insured and it includes mortgage insurance premiums. Do note that the FHA loan is primarily meant for first time home buyers so if you are already a homeowner, you may want to check out the FHASecure program instead as it is meant for homeowners with adjustable-rate mortgages and who are facing foreclosure.

Now, how did Reese qualify for the FHA loan? She met the first basic set of criteria, which are:
1. She\’s a legal resident of the United States.
2. She has a valid Social Security Number (SSN).
3. She is of legal age to sign a mortgage in the state she resides in.

If you passed all three, then there are other additional requirements you may need to meet too as per the FHA underwriting standards. This means the FHA will need to look at your credit history, income, debt-to-income ratio and the cash you have in hand for the downpayment and for closing.

Let\’s look at your credit history first. Unlike other lenders, the FHA will build your credit history based on the monthly payments you need to make currently such as your utility bills, rental, auto insurance payments and student loans. You are considered to have a good credit history if all your payments are on time for the last two years, you do not have a bankruptcy in the last two years and you have not defaulted on your student loan.

Next, the FHA will be looking at your income to see if you are able to make the monthly loan repayment. This is to determine how much loan amount you qualify for. To calculate your ability to pay, the FHA will consider that you can only afford to use up to 31% of your monthly income for mortgage, property tax and insurance payments. So, if your income is $2,800 each month, you are deemed to be able to afford a monthly payment of $868 for mortgage, including property tax and insurance. The FHA will also look at your other debts and it will set that you are only able to use up to 43% of your monthly income to pay for all of your debts such as student loans, car loans and credit cards. So, if you have an income of $2,800, you are deemed able to pay up to $1,204 in total for all of your debts.

The FHA home loan qualifying criteria also requires that you have a minimum amount of cash for the down payment and closing costs, at least 3% cash-in-hand to be exact. This also means that the property that you use as collateral to obtain the FHA home loan must be worth at least 3% more than the loan.

As you can see, it may be easier to obtain the FHA loan but you will need to meet their basic criteria and requirements first to qualify. Check you requirements today before you apply.

Author Bio: fha loan requirements fha loan fha home loan

Category: Finances
Keywords: fha loan requirements, fha loan, fha home loan