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What You Should Know Before Applying For a FHA Loan

When applying for a FHA loan, there are a few things that prospective homebuyers should make themselves aware of. First, FHA loans will often change their terms, limits, and MIP amounts from year to year, and it is best for a person to keep themselves up to date with all terms and conditions changes before applying for a FHA loan. These loan amounts and terms will often vary from region to region, and it is best for the person looking to apply for the loan to research all changes in the region they are looking to purchase a home in.

One of the most important factors to keep up to date on are loan limits, and these limits are price limits in which the FHA is willing to back with a mortgage. This means that if the home a person is looking to purchase exceeds the FHA loan limit in price for that region, that person will not qualify for a FHA loan on the home. These loan limits are determined by the median home prices in different regions across the United States, and they are subject to change year by year.

Also, a person should research the closing costs on their desired home, and if any of those costs will be covered by the builder, lender, or seller before applying for a FHA loan. Some FHA approved lenders will, however, raise rates if they agree to cover some of the closing costs incurred when buying a home, so it is always best to get to know a lender’s terms and conditions before agreeing to have the closing costs covered.

Also, it is best to know if a person may pre-qualify for a FHA loan before applying. Pre-qualifying for a FHA loan is relatively easy in the world of home loans, and if a person meets the following conditions they will most likely pre-qualify for a FHA home loan:

• Steady employment history
• Consistent income or increasing income

• Good credit score
• Mortgage payment is around 30% of gross monthly income

FHA loans are known to be some of the most flexible loans in terms of qualification conditions, and it is always best for any person looking to apply for a FHA loan to determine if they may pre-qualify. As long as a person can meet the aforementioned criteria, he or she should feel confident that they will be pre-qualified for a loan by their FHA approved lender.

More Advantages When Applying for a FHA Home Loan

Have you heard about FHA home loans and the important advantages of FHA mortgages? When seeking out first-time home buyer loans, the FHA program is one you should examine first. The fact is that many people with bad credit have qualified for government home financing. Millions of Americans achieve home ownership after learning how to apply for FHA loan programs.

What are the top advantages of home financing through FHA?

1) Great Interest Rates

When a borrower is approved for an FHA loan, they receive the lowest possible interest rate based on the market rate of that specific day. This is one reason why it’s important to close on an FHA mortgage within a short time after getting it – but it also means you’ll generally get much better rates than with other types of loans.

2) Very Friendly Guidelines for First-Time Buyers

FHA loans are designed to help people who have never purchased property before. If you are not experienced in the world of real estate and home buying, you will find FHA loans to be a great fit. FHA approved companies can help you through the entire process.

3) Limited Credit Allowed