Florida first time home buyers are searching for ways to purchase a home with a minimum down payment. Most conventional loans today require at least 10% down payment, which is out of reach for new buyers trying to enter the housing market for the first time. Enter FHA.
The Federal Housing Administration (FHA) is a department of the federal government that supplies backing to approve lenders and their borrowers that qualify. FHA made homeownership possible to those who may not otherwise be able to purchase a home. Tampa, Clearwater, St. Petersburg, Brandon are all popular locations for FHA financing. Although the qualifications are not as stringent as most loans, there are still qualifications required. It is a great idea to perform a self-check against the current qualifications to ensure that you are eligible before applying for an FHA loan pre approval.
Start with credit, this is the most important variable today in mortgage pre approval. FHA loans generally require a min 600 credit score to be approved. Additional requirements will come into play for any buyers that may have had a past bankruptcy or foreclosures, short sale. You must wait two years after having a bankruptcy and three years after a foreclosure before being accepted for an FHA loan regardless of credit score. You also want to obtain a copy of your credit report and examine it for errors as you will need to demonstrate the ability to always pay your loans on time.
The next detail that must be considered before applying for an FHA loan is your work history and current income. Having a consistent history of employment for two years prior to applying for the loan is best. This requirement is lifted for recent college graduates that are entering the workforce. The lender / bank will ensure that you are able to make the mortgage payments without straining your income level. The FHA requires that you make a 3.5% down payment on the home. It is essential that you have this money available in your savings before the application process begins. This expected low down payment has resulted in a substantial increase in FHA mortgage over the past few years.
The Federal Housing Administration will even allow you to use a down payment that was a gift. Decreasing your debt-to-income ratio to below 45% is essential before applying. This can be done by paying off loans or credit card balances before applying. FHA loans are a perfect option for middle-income home buyers who can’t quite afford the traditionally required down payment (10% or more) on a home.
Depending on the area that you are looking to live in, you’ll need to check the FHA loan limits. In many parts of the country, loans range from $548,250, even higher for Monroe County. A complete list of loan limits can be found by clicking here .
FHA Mortgage Source is Florida’s leading FHA loan resource, serving you 7 days a week from 9am-8pm. Please call us at ph: 800-743-7556 or submit the quick Info Request Form on this page.