Requirements for Attaining an FHA Loan
With the help of FHA loans, Americans have been able to borrow money from the financial institutions in order to buy a home. Keep in mind that FHA does not actually give the loans out, but they insure that you can receive the loan from a private financial institution. This type of loan can even be gotten if your credit is not good. The restrictions to get the loan are not difficult and can easily be attained by almost anyone. Utilizing this type of loan will also help you to receive a lower interest rate that what is normally gotten on a mortgage loan.
Specifications to Apply for the FHA Loan
– If you have had a bankruptcy in the past, you must wait at least 2 years before applying for an FHA loan.
– Your credit should be spotless for the 2 years following the bankruptcy on your credit report history.
– You must have proof of steady, reliable income for the past 3 years. This assures you will be able to make the payments.
– You must have what is equal to 3% of the total amount of the loan for the down payment.
– You must have a social security card with a valid number to prove your citizenship.
FHA loans do have some disadvantages as well that could make them a bad choice for some individuals. The amount of loans that are given out per county is one disadvantage. You may not be able to get the whole amount of the loan you are needed to get to buy the house you have chosen. Private Mortgage Insurance is a requirement no matter the amount of the down payment you have to make. There are a lot of financial institutions that offer FHA loans. You are highly recommended to do an intense and complete search to compare what is available for different institutions so that you can make the best choice for you.