The Truth about FHA Home Mortgages
The Federal Housing Administration, known as FHA, is a part of the federal government and is responsible for insuring private loans that have been issued for new or existing properties. You can also find loans for those that are of need for repair. Applying for FHA home mortgages can be an intimidating process if you are not familiar with it and the following are some of the most common questions we hear from our clients:
• What kind of credit score do I need?
For many people the concern regarding credit issues is a deterrent to attempting to acquire FHA home mortgages. Although bad credit is not a deal breaker, it is recommended that you do whatever you can before approaching a loan to ensure you have the best rating possible.
• What information will I need to provide?
Another common belief is that the process is difficult and requires a lot of information. The truth is, FHA will ask you for a large amount of information, however it is not impossible to acquire and you can receive a list of what will be needed from your loan officer before beginning the process.
• Is this a good option for me as a veteran?
As a veteran you may be required to submit additional information that includes the DD form 214. This form holds the official record of discharge.
• What if I had a refund after 1983?
If you have an FHA or HUD insured mortgage that was issued after 1983 and paid an upfront premium you may be entitled to a refund. Check with your FHA home mortgage loan officer for more details.
• What’s the most common FHA loan?
The most utilized service available for an FHA home mortgage is the 203(b) fixed rate loan, which is very popular among first time buyers and will maintain a low monthly rate.
• How do I borrow using an FHA home mortgage?
For people who do have challenged credit or who are just getting started FHA home mortgages are a great place to begin, however you will need to find a qualifying lender. FHA does not issue loans, they issue guarantees.
• What about Underearned Fees?
Although there are some legitimate costs and fees that are associated with FHA home mortgages, be warned of underearned fees, which are illegal and just take advantage of those who are not familiar with the process.
• How long will it take to improve my credit?
Although perfect credit is not necessary, establishing a pattern is important. It is a good idea to show that you are making some kind of payments at least for a year before applying.
• What should I avoid?
Try to avoid any kind of major credit card purchase while you are in the process of buying a home, this will cloud the debt to income ratio and potentially damage the outcome.
• What if I can’t repay the loan?
One important difference between FHA home mortgages and other loans is that they will not foreclose for ninety days after failure to pay. It is critical that you do not go delinquent however, as this can still have negative effects on your loan.
For more information about FHA home mortgages call (803) 765-1680 and toll free at (800) 854-9484. You can also visit http://www.midlandmortgagecorp.com/mortgage-applications/overview