• How to Qualify for an fha loan
    Qualify for an FHA Home Mortgage Loan

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How to Qualify for an FHA Mortgage

To qualify for an FHA home mortgage loan, a borrower must meet certain eligibility requirements. Compared to any other loan program, FHA is the easiest to qualify for, credit wise.

Borrowers must have at a minimum;

  • Acceptable credit profile
  • Have at least 3.5% down payment
  • Ability to repay the mortgage as set forth by HUD guidelines
  • Borrowers applying for an FHA insured loan must have at least a 580 middle FICO score.
A down payment of 3.5% is required on all FHA transactions. Fortunately when it comes to FHA home mortgage loans, that 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 55% DTI; no other loan program in the market allows this but FHA. AMCAP Mortgage Ltd., an FHA approved lender can go as high as 57% back-end ratio to qualified borrowers.

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 Ltd. can get an automated underwriting approval from either Fannie Mae or Freddie Mac and go over the requirements and/or additional required documentation with the borrower. This will ensure that the borrower actually is approved per FHA guidelines.

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