Am I ready to apply for an FHA mortgage? There’s a set of questions you should ask yourself that can help gauge your readiness to apply for a home loan. Some of them are obvious questions, some aren’t so obvious. All of them deserve some thinking time before you begin filling out application data.
Have I Requested Copies Of My Credit Report?
If you don’t know what is on your credit report, or if it’s been more than six months since you last reviewed your credit, it is best to wait to fill out a home loan application until you know what your lender will see.
Identity theft is a major issue, and now more than ever a borrower should be fully informed as to the contents of those credit reports. That’s not just to inform you about your suitability for an FHA mortgage loan, but for your own financial protection in general.
Have I Made On-Time Payments Consistently In The Last 12 Months?
Late or missed payments in the 12 months leading up to a home loan application can seriously jeopardize your ability to get a home loan approved. It’s best to insure you have a full year or 12 months of consecutive on-time payments on all financial obligations before you submit a loan application.
Have I Used An Online Loan Calculator To Determine How Much Loan I Can Afford?
Using a mortgage calculator can be a major help in determining your price range and the estimated amount of your monthly mortgage payment. Do you know how much of your income is taken up by both your current debt and your projected monthly mortgage? That ratio will be an important factor to the lender and you should know (approximately) what your own debt ratio is before the lender does.
Do I Have Any Compensating Factors That Might Make Loan Approval Easier For My Lender?
“Compensating factors” can include a larger down payment, “substantial cash reserves”, investments, or other financial resources that could make you a better credit risk.
Do I Understand The FHA Loan Program Correctly?
This may seem like an odd question to ask yourself, but some have a misconception about FHA home loans that keeps them from fully exploring their options. For example, FHA loans are not targeted at people with financial difficulties, nor are they considered to be for first-time home buyers only. Anyone who financially qualifies with steady income, patterns of good credit use, and debt ratios within the program’s guidelines may be eligible for an FHA mortgage.
Does My Intended Use Of The Property Fit With FHA Loan Program Requirements?
FHA single family home loans are not for commercial properties, bed-and-breakfasts, vacation homes, or similar types of non-permanent occupancy residences. FHA mortgages are for owner-occupiers, and there is an occupancy requirement as a condition of loan approval.
Speak to a loan officer to see how an FHA loan can meet your needs, or if you are unsure whether you are ready to apply for an FHA mortgage.