How Do You Apply For An FHA Loan? In our last blog post we covered some basics about preparing to apply. You can’t get to the application process without saving up for closing costs, examining your credit, and making sure you come to the application with at least 12 months of on-time payments on your credit history for all financial obligations.
Once you are ready to start looking for a home, one of the best things a borrower can do is to get pre-approved for an FHA mortgage. Pre-approval means starting a business relationship with your chosen participating FHA lender.
The lender asks for credit information from you, does a preliminary check of the data you’ve provided (as well as looking at your FICO scores, income, etc.) and makes a basic determination that your are able to work together on a new purchase home loan. Pre-approval is usually good for a fixed number of days (a month, three months, whatever you and the lender decide upon together in writing) and communicates to a house seller that you are serious about the transaction.
However, pre-approval is NOT loan approval across the board. That comes when you have made an offer on the house, you fill out the actual loan paperwork, and wait for the process to finish with an answer from your lender.
How Do I Apply For An FHA Mortgage Loan? What Do I Need?
Applying for the actual loan means providing some crucial information to the loan officer. That information includes your full name and Social Security Number, your employer’s contact information, pay stubs, account numbers for your personal finances, a work history, information about any assets that might be helpful for loan approval purposes, and more.
You will need to have all of this information in order to successfully complete a home loan application. It can take time to get together all your account numbers, contact phone numbers for your work references, asset details, etc.
You will also need extensive information about your financial obligations: credit card numbers, amounts owed, credit limits, etc. If you have filed for bankruptcy in the past you will need documentation that shows the status of that filing and the discharge dates. Borrowers who have had bankruptcy, home loan default and foreclosure, short sales, or related issues may be required to wait out a “seasoning period” which can vary depending on the lender and the nature of the derogatory credit information.
The loan application itself likely won’t be the only form you sign and date. Your lender will need written permission from you to access your credit reports and other sensitive data, and if you choose to have co-borrowers they will need to provide all the information already listed here.
Applying for the loan-the physical process of filling out the application-may depend on the lender, the laws of your state, and other considerations. Some will be required to fill out a combination of physical paperwork and computer-based forms. Others may do 100% of the process electronically.
There are other steps including working with the lender to settle on a mortgage rate interest lock agreement (which protects the borrower from interest rate increases in the meantime as you wait for the home loan to close), paying for appraisals and compliance inspections, and reviewing the charges associated with your loan on a good faith estimate. The process for all lenders may vary depending on where you are, but the information needed (as listed here) in general is required for most transactions.