The Home Buyer's Korner

Information presented should be used for educational purposes only.

September 16th, 2014

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FHA Pre-Approval

pre approvedIf you’re in the market for your first mortgage, the Federal Housing Administration could be your best option. The FHA home loan program allows you to apply for loan approval before you’ve found a home that you want to buy and means you know what you can afford before you start your house shopping. Here’s what you need to know about FHA home loans and how they can help you find the right home for you and your family.

First, the pre-approval process can be done over the phone or online in a matter of minutes. All you need to do is contact a network member and start the application process. You’ll be asked a group of questions and you’ll need to meet several bars, such as a history of steady employment and consistent income, a credit report in good standing, and a desired mortgage payment of no more than generally 28 percent of total monthly gross income.

In general FHA Lenders want to see two years of steady employment, with only short gaps that can be easily explained.  If you been long term unemployment, generally lenders want to see at least six month being back on the job and in a similar field. Self-employed home buyer also need at least two years history, but some lenders will allow for less; down to one year with tax returns filed supporting your 12 months of self-employment and a previous history of employment in the same field.

Your median FICO Score should be at least 620, but some lenders will go lower, with compensating factors such as a larger down payment.

When your mortgage lender contacts you, he or she may overestimate your property taxes and will assume that you are going to borrow the maximum amount for which you qualify. Therefore, the monthly payment that you are quoted may be higher than the amount that you would pay each month when you actually purchase your home. Based on the property taxes, insurance and your down payment, your payment may be higher or lower at closing.

If all goes well, your mortgage lender will issue a letter confirming that you are conditionally approved for an FHA home loan and should be provided to your real estate agent. You may also want to submit this letter with any offer that you make to purchase a house.  Why? Without a  conditional loan approval many seller may not take your offer seriously and if you are in a bidding war, it may not be possible to win unless you show that you have financing available to close on the property in a reasonable amount of time.

The first step to get a mortgage is to get conditional loan approval. By calling a network member, it may be possible to obtain pre-approval for the mortgage you need while also negotiating favorable terms.

HOME OWNERSHIP TOOLS

FHA 203K

Your Home Purchasing or Refinancing & Renovation Tool

Mortgage Loan Officers, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMESTYLE

The Conventional Alternative to FHA 203K

Great for Real Estate Investors and Second Home Renovations

You Mortgage Loan Officer, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

FANNIE MAE HOMEPATH RENOVATIONS

Rebuilding the Dream of Home Ownership

Fannie Mae HomePath has No Mortgage Insurance up to 95% LTV

Up to $35K for Home Improvements, Renovations or a Simple Remodel

Your Mortgage Loan Officer, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

USDA RURAL DEVELOPMENT

Up to $10K for Home Improvements, Renovations or a Simple Remodel

Your Mortgage Loan Officer, Real Estate Agents & General Contractors

are ready to assist you with your home purchase

A SIMPLE HOME SHOPPING INSPECTION TOOL

Organizing your home shopping experience affords a wise decision making process.

This simple home inspection tool makes your ultimate buying decision a smart one.

To print this document click on “Open in New Window” located at the lower right corner; click on “File”; then click on “Print”.  In the center of the screen you will have the option to “Create A Printable PDF of the Presentation”.

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