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Articles in Category: Debt Ratios

December 20, 2010

How Much Do I Have To Make To Qualify For an FHA Home Loan?

By Joe Wallace

How much do I need to make to qualify for an FHA mortgage? That is among the most popular questions about FHA home loans. According to the FHA, there is NO minimum income requirement to apply. That said, the FHA does require a three-year employment record showing steady income during that time. Note that the requirements don't say you must have held the same job for three years, only that the income has been reliable. The fact is, in order to qualify for an FHA home loan, there is no one single determining factor that gets you approved or declined; the FHA examines a combination of factors to determine an applicant's overall credit worthiness and ability to pay the FHA mortgage on time every month.

 

December 7, 2010

Can I Afford to Apply for an FHA Home Loan?

By Joe Wallace

Sometimes the most difficult part of becoming a homeowner with an FHA mortgage is taking the first step. Many people feel intimidated by the prospect of finding a new home, applying for the FHA loan and entering the commitment. But sometimes a little information is all that is needed to show a prospective house hunter that the dream may be within reach--and closer than expected. The FHA provides a simple tool to help potential house hunters figure out how much home they can afford to buy. The FHA Buy a Home page has a link to a Ginnie Mae online calculator that asks for four simple figures to help figure out what your monthly mortgage budget could look like.

 

November 24, 2010

How Much is the FHA Debt-to-Income Ratio?

By Joe Wallace

The FHA has a maximum debt to income ratio set for FHA loans. When a borrower applies for an FHA mortgage, they must list all debts and lines of credit in detail as well as all possible approved income sources. With this information, the lender and FHA can calculate what a borrower's debt picture is and issue a percentage of debt to the amount of income listed. For FHA home loans, the rules are clearly spelled out. According to the FHA official site, "The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt."

 

November 23, 2010

An Introduction to the FHA Debt-to-Income Ratio

By Joe Wallace

FHA loans require many things from the borrower. The credit report, residence history, employment history and a list of all current outstanding debt must all be furnished to give the lender and the FHA a good picture of the borrower as a credit risk. When it comes to government home loans, all the information is needed since credit scores are not the determining factor in whether or not the FHA mortgage is approved. An FHA borrower with good credit, a solid work history and a track record of on-time payments would seem to be a shoo-in for an FHA home loan. But there's one thing that can offset the good things for the borrower if his or her debt-to-income ratio isn't within the limits for an FHA loan.

 

November 22, 2010

How Long Do I Have To Be Employed to Qualify for an FHA Loan?

By Joe Wallace

The FHA loan application process includes many steps, including running a credit report and having the FHA borrower fill out paperwork with personal information like open lines of credit and current income. Applying for a government home loan also requires giving the lender two types of personal history--a record of where the borrower has lived and where the borrower has worked. FHA requirements dictate furnishing at least a two-year work history, but that requirement shouldn't be mistaken for an employment minimum. According to the FHA's official site, "FHA does not impose a minimum length of time a borrower must have held a position of employment to be eligible for a mortgage."

 

November 22, 2010

How Much Income Do I Need to Qualify for an FHA Home Loan?

By Joe Wallace

"How much income do I need in order to qualify for an FHA home loan?" That is one of the most popular questions many first time home buyers ask about getting an FHA mortgage. The answer often comes as a surprise. The FHA has no minimum income requirement--there is no dollar amount listed as the baseline for which FHA loans are approved. What the FHA does require is a history of steady income for at least three years. That FHA requirement should not be misinterpreted--it does not establish a minimum length of employment at any one company. It is intended to set a minimums for steady income rather than attempt to gauge employability or longevity at any one firm.