October 10, 2023
Got questions about the FHA home loan journey? You are not alone.
Many first-timers and experienced house hunters have questions about FHA mortgages. Here are some of the most popular.
When reviewing these answers, don’t forget that some issues related to FHA loan approval are circumstantial.
Your loan application is typically handled on a case-by-case basis, so it’s smart to assume your circumstances may be unique depending on what the issue is. It always helps to talk to a participating FHA lender.
How Much Do I Need To Save For An FHA Home Loan?
Expect a downpayment minimum of 3.5% of the sale price of the home. You should also expect to save between 2% and 6% of the total loan amount for closing costs.
If you want to know the FHA loan limits for your county to help you estimate what these expenses might be, you can do the math using the FHA limits for a single-unit home all the way up to four units.
My Credit Is Not Perfect. Is That A Problem For An FHA Mortgage?
Do buyers need perfect credit to be approved for an FHA mortgage? No.
FHA FICO score requirements for the lowest down payment start at 580, but be sure to ask your lender what that financial institution’s standards are as lender requirements may vary.
Has at least one year passed since your last late or missed payment on a financial obligation? Have you been in the same type of job (or better) for the past two years? If so, your chances of being approved for an FHA mortgage are higher than you might think.
What FHA Loan Approval Rules Should First-Time Home Buyers Know?
FHA loan approval rules are identical for all borrowers, don’t expect different terms if you are a repeat home buyer. The FHA loan program is for all financially qualified applicants and not just first-time home buyers.
Typical loan approval requirements include having FICO scores of 580 or higher to meet FHA standards for the lowest down payment. Applicants must also meet lender standards for credit and employment.
What Do I Need to Know About Refinancing an FHA Mortgage?
Don’t expect to refinance your home for at least six months after closing. You will likely be required to make a minimum of six months’ worth of mortgage payments over six months and not all at once to qualify for popular FHA refinance loan options.
Becoming A Landlord Property Purchased With An FHA Loan?
This is possible only if you occupy the property, as FHA loan rules state clearly that at least one person named on the loan must occupy the property as their primary residence. This is true for all FHA purchase loans under the FHA 203(b) program.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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