Are you thinking about or in the process of buying your first home?
In terms of “is now a good time to buy or not” I think you will probably look back in 5 years and be glad you moved when you did.
One of the most common questions we get from first time home buyers is “what does it take to qualify for a loan?” so I thought I would outline the qualification criteria for one of the most popular programs available for first time home buyers — the FHA loan program.
FHA Loan Programs: 3 Basic Choices
The most popular loan option for first time home buyers is the traditional FHA loan. In recent years as other mortgage programs have been eliminated by lenders, the FHA loan is now as popular as it ever has been.
With FHA loans, you have a choice of 3 basic loan programs, the 1 year adjustable rate loan, a hybrid adjustable rate loan and the 30 year fixed rate loan. Right now, the FHA 30 year fixed rate loans are by far the most popular option because fixed rates are close to the same interest rate as the adjustable ones are – and sometimes even lower!
FHA Loan Programs: What It Takes To Qualify
FHA has long been known for it’s flexible underwriting standards – meaning if you are not approved though the computerized automated underwriting system, a FHA-approved underwriter can look at your file and manually approve it based on a number of factors that the computer couldn’t account for.
In general, in order to be approved for an FHA loan in today’s market, the following apply:
- Need enough money for the 3.5% down payment requirement
- Need above a 580 middle credit score for all borrowers
- Must plan to live in the home as your primary residence
- Must have employment history for at least 2 years, preferably at the same job or in the same field
- Must be able to document your income through W2’s/paystubs or tax returns
- New mortgage payment should be *approximately* 30% of your gross income
These are the basic FHA qualifying criteria – if you answer most of these with a “yes, I have that” there is a good chance that we can help you get qualified for an FHA loan so that you can take advantage of this buyers market and get into that first house you have been working towards.