May 5, 2015
If you are considering an FHA home loan, are you ready to fill out the paperwork? Here are some important questions to ask if you are considering applying in the near future:
What’s My Credit Score?
If you don’t know your current credit score, chances are good that you are not prepared to begin filling out FHA loan paperwork. Before you commit to applying for a new home loan, it’s strongly recommended that you pull your most recent credit report, check your FICO scores and see what your lender will see when he or she requests the same information. If you don’t know what the lender will see, find out before the bank does.
What Does My Payment Record Look Like?
Have you missed ANY payments in the 12 months leading up to the new loan application? If so, you aren’t ready to fill out the loan paperwork. Come to the application process with a solid year of reliable payments behind you and you will be a much better candidate for FHA loan approval. Anything less could put your application in danger of being rejected.
What Is My Budget For A Down Payment?
FHA loans do require a minimum down payment–no modern borrower is able to apply for a new purchase home loan guaranteed by the FHA without putting down a minimum of 3.5% of the appraised value of the home. If you don’t have an idea of how much money to save for this down payment, chances are good that you need to consider the next question in our list very carefully.
How Much Home Can I Afford?
Do you know your price range for a new home? This isn’t just about what you are comfortable spending, it’s also about what you can afford based on the sale price of the home broken down into monthly payments. Consider using a mortgage payment calculator to determine what your mortgage amount might be each month, but don’t forget to include property taxes, insurance and other add-ons that may increase the payment above and beyond the loan interest and principal.
Do I Need Pre-Purchase Counseling?
You can call the FHA directly at 1-800 CALL FHA to request a referral to a HUD-approved housing counselor in your area that can help with all the questions above and more with good advice and tips for getting properly ready for an FHA home loan BEFORE you fill out any paperwork. This is a valuable resource many borrowers have learned from–contact the FHA for your referral.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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