Florida first-time homebuyers in Gainesville and Ocala often ask about the FHA loan application process, and what to expect. Below we have outlined some useful information that details each step of the application process. Buyers should be aware of what is needed before applying for an FHA mortgage, as well as know the process of your application and the documents required.
Before FHA Application:
- Debt-to-income ratio
This is simply what percentage of debt vs gross income. Lenders vary on precise amounts but a debt load that’s higher than 45 percent is risky for an FHA loan. In most cases, buyers will need two years of employment preferably without a decline in pay.
- Credit check
It’s usually the small things that bite and bring down your credit score. Check your income, credit, as well as rent history (paying rent to parents to board in their home does not qualify, mind you) that might show up on a credit report. Get everything on the up and up, aiming for a clean record.
- Credit score
A credit score of 620 or better would be ideal for the 3.5% down payment FHA. Buyers putting 5% or 10% down payment will have additional flexibility in regards to min credit scores. If you came out of bankruptcy or foreclosure, you would need to have maintained a perfect credit since then (4 years and 5 years respectively).
- Submit the Buyer’s information request which tells the lender what you have and what you need.
FHA Application Pre Approval Time:
This will aid the lender in creating a customized strategy to aid you in attaining FHA approval. An FHA loan application will have to be filled out that detail everything about you, the borrower, which will be used in figuring out whether you’re eligible for a loan or otherwise. The interest rate and the terms of the loan will also be determined largely by the information in your application form.
- In the event the application is pre-approved, you will get the disclosure documents which are essentially initial loan documents that have all the minute details regarding the terms, interest rates, cost and payments of the loan.
- This has to be signed and returned along with other documents such as your bank statements, IDs, references, etc., for verification purposes. Usually, these documents are prepped and readied well before the loan application is submitted to the bank or lender.
- The processor reviews all verifying documents and requests for missing or any additional documents from the borrower if need be.
- Upon completion, the documents are then submitted to the underwriter.
- The underwriter will send a Conditions List of additional missing items or documents to the buyer.
- Once the buyer completes the needed items on the list, it’s sent back to the lender for final approval. A closing date is then set.
Note, the current 2023 FHA mortgage limit for most of Florida (Marion and Alachua County included) is $472,030 for a single (1) unit home.
The entire FHA application & closing process here in Florida takes about 3 weeks to a month to complete. Gainesville and Ocala home buyers that want to start their FHA loan application should call us at ph: 800-743-7556 or submit the quick Info Request Form on this page.