The Most Relevant Facts Regarding FHA Loan Qualifications That You Should Know
An FHA loan is a mortgage that the Federal Housing Administration issues. They are helpful with buyers who are more limited with their savings and with people who have damaged credit scores.
A damaged credit score will be lower than expected, and as such, it is harder to receive a loan in most cases. However, with an FHA loan, you have help. These loans are popular among first-time homebuyers, which is one of the reasons that they have gained popularity in the past decade.
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Perfect Credit Isn’t Needed
As stated above, with an FHA loan, you don’t need perfect credit though having good credit does help. The minimum credit score for this type of loan will depend on the same loan that you need. To get a mortgage with a down payment, you should have a score of at least five hundred and eighty.
If you can do that, you only have to put down three and a half percent. However, if your score is lower, such as five hundred to five hundred and fifty, you will need to be able to produce a down payment of at least ten percent. Falling under five hundred on the credit score will make you ineligible in most cases for a loan. However, in some instances, you may meet the requirements by having a non-traditional credit history.
FHA Loan Qualifications That Affect Your Loan
An FHA lender will tell you that there are things that make you ineligible for an FHA loan. If you don’t have a credit history, that will affect your chances of getting a loan. You will have to develop a credit history from another means. If you have committed bankruptcy, it will be harder to obtain this type of loan, but it is not impossible. You will need to have at least two years to have elapsed, and you will need to have re-established good credit.
Having foreclosures in the past is not necessarily something that could keep you from gaining a loan, but it will depend on your unique circumstances. FHA loan qualifications also require that you turn in your application when you have a solid year of on-time payments for your financial obligations. As a basic rule of thumb, an FHA loan will have the lender determine whether or not you can choose whether or not judgments are resolved.
FHA Loan Qualifications Don’t Need To Be Complicated
FHA loan qualifications don’t need to be overly complicated, and with the right lender, it is pretty simple to understand. With the correct credit score and down payment, it is easy to gain a mortgage and need help.
First-time buyers don’t have an issue with this type of loan, and it makes buying your first home far more quickly. Remember, financial hardships occur with all of us, but that may not affect your ability to get help. With these tips, you will begin to understand how to begin the process of obtaining an FHA loan to help you become a homeowner yourself easily and quickly.
