Timely news, information and advice concentrating on FHA, VA and USDA residential mortgage lending.

Vimeo Channel YouTube Channel

Articles in Category: Debt Ratios

June 20, 2011

Can I Use Rental Income on My FHA Loan Application?

By Joe Wallace

An FHA loan applicant who owns a property he or she is currently renting would naturally want to include that income on the loan application. As with all other sources of income, the borrower must not only list the amount of that income, but also be able to show to the lender that the money is stable. Since an FHA lender is charged with verifying all sources of income, the borrower must provide proof that rent money coming in is likely to continue. What does the FHA require as proof of dependable income when it comes to rent payments? According to the FHA official site, “Examples of stability may include a current lease, an agreement to lease, or a rental history over the previous 24 months that is free of | more...

 

April 20, 2011

FHA Loans and Retirement Income Verification

By Joe Wallace

When applying for an FHA home loan, the borrower must list all sources of income so they can be verified as part of the loan approval process. The lender is required to check all sources of income to insure they are dependable and “likely to continue” into the future, according to the FHA official site. Income verification helps the lender accurately determine a borrower’s debt-to-income ratio; without knowing that ratio it’s impossible to issue a loan with any degree of certainty that it would actually be repaid.

 

January 28, 2011

How Can I Tell If I Can Afford an FHA Home Loan?

By Bruce Reichstein

Many people dream of home ownership, but the prospect of committing to a monthly mortgage payment is daunting for some. How can you tell if an FHA mortgage is right for you? Fortunately there are many tools online that can help a potential borrower determine whether they're ready to take the plunge...or if their finances need a bit of work first. One of the criteria for a successful FHA loan application is having the right debt-to-income ratio. An FHA borrower must have a debt-to-income ratio that totals no more than 41% in most cases.

 

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 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.