How to prequalify for fha loan
How do I pre-qualify for an FHA Loan in Texas?
To qualify for a Texas FHA loan, borrower must meet certain eligibility requirements . They must have at a minimum;
- Acceptable credit profile
- Have at least 3.5% to put as down payment
- Ability to repay the mortgage as set forth by HUD guideline
Borrowers applying for an FHA insured loan must have at least a 580 middle FICO score. Compared to any other loan program, FHA is the most lenient and easiest to qualify for, credit wise.
A down payment of 3.5% is required on all FHA transactions. Best part of all, the down payment can come from a family member as a gift towards the purchase of the house. The donor has to provide the source of the money being used as a "Gift Fund" to the borrower.
The debt-to-income requirement allows the borrower to have a higher back-end ratio as compared to other loan programs. FHA will go as high
as 57% DTI; no other loan program in the market subscribes to this rule but FHA.
Contrary to popular belief, credit alone does not guarantee a mortgage loan. Credit, in conjunction with, income and borrower's assets determine affordability and the total home loan to be extended.
The Federal Housing Administration (FHA) insures the loan made by banks and other private institutions. The first thing that every prospective borrower needs to do is consult with an FHA approved lender. An FHA Home Loan Specialist will do an analysis of the borrower's credibility and ability to pay back. This is a simple pre-qualification process. The borrower can take it one step further by opting to be pre-approved. This process will require documentation of income and assets required to move forward with the loan. AMCAP Mortgage can get an automated underwriting approval from either Fannie Mae or Freddie Mac and go over the requirements with the borrower. This will ensure that the borrower actually is approved per FHA guidelines.
For more information, call us at 210-960-4050.Source: www.texasfha.org