The Federal Housing Administration FHA is a federal agency committed to getting Americans into home ownership. By insuring private loans, the FHA can help borrowers qualify for higher mortgages, reduce their interest rates and assist them through the home buying process. The FHA also protects lenders by providing insurance for less-than-secure loans.
If you're considering a mortgage, know that an FHA home loan is often easier to apply for, more accepting of poor credit and offers lower interest rates. Essentially, you should give serious consideration to applying for one. To learn about the requirements for an FHA home loan, keep reading to learn how you can qualify.
Mortgage Limits
The FHA puts a cap on the mortgages it will insure. You can't qualify for an FHA mortgage, for example, if you're attempting to buy a million-dollar mansion. That said, their mortgage limits are reasonable and based on house price medians in your area. For that reason, the FHA mortgage limits are divided by county. To see if your home is below the limit, check the FHA's home page.
Applying For an FHA Home Loan
To qualify for an FHA loan, you need to demonstrate that you're employed, have good job stability and that you're reliable. When you apply for an FHA home loan you will need to provide the following paperwork:
1. Your previous addresses for the past two years. If you're a couple that has had different addresses, you will need to include each of those.
2. Your complete employment history for the past two years, including employer's names and addresses along with your gross monthly salary. You may be required to provide proof of your employment in the form of a pay stub, letter or bank statements.
3. Your W2 forms and income tax forms from the last two years.
4. If you're a veteran, you will need to include your discharge papers as proof of your veteran status.
How to Qualify for an FHA Loan
The best way to qualify for an FHA home loan is to demonstrate that you've been a responsible credit holder for at least two years.
To do this, pay down old debt, make payments on time, refrain from any major credit purchases (like a brand new car) and stay with a single employer. Remember, qualifying for an FHA home loan is often easier than a mortgage from a private lender, but that doesn't mean it's free. You'll need to demonstrate steady employment, responsibility and a general ability to make your payments on time.
About the Author
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This Article is designed to be of general interest and should not be considered professional advice. The specific information discussed may not apply to you. Before acting on any matter contained herein, you should consult with your personal insurance and or legal adviser.
