An FHA loan is a mortgage loan that is backed by the government and insured by the U.S. Federal Housing Administration. Borrowers, commonly those who have low credit scores, enjoy several benefits like low down payment threshold of 3.5% of the whole home purchase. Borrowers with low FICO credit scores like 580 as well as bad credit can still meet the requirements for an FHA loan. Even borrowers with a credit score of 500 can still qualify for an FHA loan but they are expected to cover a down payment of 10% of the whole total home purchase.
There are certain caveats when it comes to FHA loans. You have to be able to survive the extensive FHA loan approval process. Given that, it will be helpful if you understand the FHA loan limits. If FHA considers you as a high cost market, your maximum loan amount is $679,650 and $294,515 if you are in what it refers to as a low cost market. Borrowers prefer FHA loans for many reasons including friendlier qualification terms and low interest rates.
FHA Loan Requirements
To get an FHA loan, there are certain hurdles that a borrower needs to clear.
- the borrower should present proof of identification and also show a reliable stream of income including two of your recent paycheck stubs are enough as well as tax returns.
- The borrower should also have to agree to have their desired home checked by a home appraiser that’s approved by FHA.
- The credit score should not be lower than 500. But there is one caveat. In case the loan borrower does not have any credit record or a non traditional credit history, the FHA can still approve a home loan. To obtain a 3/5% down payment, the credit score of your borrower should not be lower than 580.
- If the borrower has a history of bankruptcy, you have to be out of it for at least two years, and you should not have had a home foreclosure for three years minimum.
- The borrower will not be approved for a loan if they are behind on either his federal student loan taxes or income taxes.
- The lender should be FHA approved. The lender of an FHA loan isn’t actually a mortgage lender, they collaborate with mortgage lenders that have been approved by the government who should meet certain conditions before being given an FHA loan status. Additionally, the terms of provided by different FHA lenders are not the same. The could and do have varying interest rates, fees, and costs, as well underwriting practices.
Pros Of An FHA Loan
Myrtle Beach FHA loans offer several advantages including low down payments, debt and money problems may not prevent you from obtaining an FHA loan. Borrowers could also obtain assistance in paying closing costs and FHA also provides home improvement loans.
Here at MB Mortgage Pros, we can close your loans in 30 days, even less. You will get the best pricing as well as lowest PMI rates in the industry. If you are looking for blogs relating to Looking to buy a home in Myrtle Beach, SC” – You should first obtain a loan pre-qualification.
Call MB Mortgage Pros if you need more information about FHA loans.
MB Mortgage Pros
630 Chestnut Road
Myrtle Beach, SC 29572