subject: Understanding FHA Loans and Its Benefits [print this page] Not all people are able to afford to purchase their own homes. Provided, despite the existence of the loans by the banks will still not be a viable option for them. Borrow money, so can not, because of low incomes. Any additional expense may fall victim to their other obligations. On the other hand, some people could be restricted in order to obtain a loan because of the recent bankruptcy and foreclosure.
If you belong to this group of people, you may be wondering whether you ever reach yourDream of owning a house. Well, the good news: You can, if you consider FHA loans as an option.
Overview of FHA loans
FHA stands for Federal Housing Administration. This is a government agency formed to implement to improve housing standards. It also provides a system to finance viable loan application to make for each person. They do this while stabilizing the mortgage industry.
FHA loans are not provided for by thisAgency. The loan is still approved by the Bank and other financial institutions charge. The role of the FHA is primarily to the lender against the risk of the bond insurance.
When applying for the loan you will still go through qualification process. Lenders would still be at risk through the analysis of your debt to income ratio, credit history and make your personal profile. FHA must also consider the property that you want to purchase.
To learn more about them in the following sectiondescribes who to qualify for the loan and what properties qualify for them.
Who qualifies for the loan
If you have the history of bankruptcy, it must be at least 2 years old, but should the borrower with good credit ratings performance for 2 consecutive year after the incident.
If the history of isolation, it must be at least 3 years old, but borrowers in good credit performance for 3 consecutive years after the incident.
income development in the last 3 years shouldhave a constant rhythm or need more, but it should have clear evidence to settle monthly obligations on time.
Down payment be less than 3%.
Those who can afford to pay 30% of their income in the form of a monthly payment.
Easy Approval comes to those who have a minimum credit score of 620th
Qualification of Property
The property must be subjected to FHA appraisal. This applies not only to the market value of the property but also works such as inspection.The property must meet the standards of FHA, before it is approved.
Low down payment will be issued if the property is used as the primary house. In short, there are condominiums and should not be used for business purposes. A separate program is appropriate for investors provided.
