Are You Seeking Information on the Guidelines for Obtaining an FHA Loan?
Are You Seeking Information on the Guidelines for Obtaining an FHA Loan
?
The FHA stands for the Federal Housing Administration. The FHA has been made in order to facilitate the lower earning citizens of the United States of America buy a house for themselves. Owning a house is good investment and also a safe way of investing the money. Generally one never has enough money to pay for a house. It is at such times that one borrows money in order to finance the deal. The FHA loans are offered to citizens at a much lower rate of interest as compared to competitive market rates. But in order to get the loan one has to meet certain very strict and stringent guidelines.
FHA loans are the easiest to obtain if one is able meet the guidelines. One of the best parts about the FHA loan is that one has to do only a down payment of 5% in order to obtain the loan. Loans offered by banks require you to do more down payments and this is not possible for many individuals. Here are, some of the basic guideline which have to be met in order to get your self the FHA loan.
Firstly one must prove to the authorities that you have had two years of steady employment. Now, this is necessary to show your ability to repay the loan. It is also preferred if the individual has worked with the same employer for 2 years. The FHA also requires the person to have at least the same income level in the past two years. If your income has been rising regularly, it will make the loan process easier.
One must also meet strict rules regarding old credit. It is necessary that you meet a certain score in the previous credit limits. It is also necessary to file details of bankruptcy. It is necessary that the bankruptcy must be more than two years old and that there is a perfect credit record since the time you were declared bankrupt. The FHA also requires you to furnish details about the foreclosure of loans previously held. It is necessary that the last foreclosure should have happened at least 3 years prior to the time when the loan is sought by the individual.
Another basic criterion is that, the loan amount sought must not be more than 30% of the gross income. Gross income here refers to the income before taxes are deducted from it.