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When You Are Ready To Apply For Your FHA Mortgage

May 9, 2024

FHA home loan advice

When a borrower has the down payment funds and feels ready to commit to the house-hunting journey, applying to be pre-approved or pre-qualified for an FHA mortgage is the next logical step. But there are a few things to review before you begin.

Gather Your Documents And Know Your Financials

Applying for a loan includes bringing financial data to the bargaining table.

You must gather two years of tax returns, you should know specifics about annual gross and net income, and be ready to give the lender information about outgoing debt, your current credit scores, and any other non-employment sources of income you want counted for loan approval purposes.

Your lender requires this information to begin. Some situations require more information than others. For example, small business owners may be asked for two years of profit-and-loss statements and other small business financials.

One Last Look At Your Credit Reports

Identity theft can happen at any time. Even if you looked two weeks ago, you may still find something in the report that needs addressing before you begin the loan paperwork process.

Before you begin filling out forms, it pays to review your credit reports again to determine exactly what your FHA loan officer will see after you complete the application.

Some Borrowers Must Take Additional Steps

Is your FHA down payment being made with your own money? Not all borrowers pay their own money down. These borrowers may receive gift funds or downpayment assistance and these borrowers must know lender requirements for verifying the source of that money.

What do you need to provide the bank to show the source of your closing cost funds? Ask the lender. Standards may vary from one lender to another, and certain additional steps may be required depending on the circumstances.

Check Today’s Interest Rates

Don’t try to negotiate home loan rates if you don’t know the current numbers. You want to know what the “ideal” rate is (the one advertised) compared to what the lender will offer you.

Don’t expect to be offered the exact rate advertised if you don’t meet the higher FICO score requirement, but it is important to have an idea of the ideal rate offering so you can make an informed decision when the time is right.

Remember that the online rates typically assume higher FICO scores and a solid bill payment history. Your experience may vary depending on the circumstances.

Be Sure To Ask The Lender

Does your bank feature discounts or other options for existing customers? What about options for new customers? Does the lender offer a military discount or options for first responders, police officers or those in the medical profession? It pays to ask.

Joe Wallace - Staff Writer

By Joe Wallace

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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About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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