FHA Loan Basic Requirements

June 16, 2009 · Posted in Helpful Mortgage Articles

FHA Loan Basic Requirements Qualify for FHA loan

If you are shopping for a home loan weather as a first time home buyer or a refinance, you will be faced with several options when it comes to the type of loan. This can be overwhelming. There is a great deal of information out there and it may seem difficult to make the right choice. A good place to start would be looking into an FHA mortgage. Here are the basic requirements for getting an FHA Loan.

FHA Employment Requirements

FHA requires that you have stable employment or a stable source of income for at least the past two years. There may be exceptions when FHA will approve you with less than two years of steady employment, but there must be a satisfactory reason for it. Two consecutive years of non employment income such as retirement or interest may also be used to qualify.

Credit Score Requirements For Getting an FHA Loan

To qualify for a mortgage through the FHA you must have at least decent credit. The FHA says that your minimum credit score should be above 580. The truth of the matter however is that there are practically no FHA lenders out there who will approve your mortgage with anything less than a 620 credit score. It is a good idea to understand exactly what your credit score is before you begin the application process.

Other Requirements For FHA Loan Approval

There are several other requirements that you must meet in order to obtain an FHA mortgage. The property must be appraised at and amount equal to or greater than the purchase price. An appraisal must be completed by an FHA approved appraiser. The appraisal will in all likely hood be ordered by the lender, not the borrower.

FHA Minimum Down Payment Requirements

If you are purchasing a home and plan to get an FHA loan, you must put at least 3% of the purchase price down as a down payment. If you are refinance your home you must have at least 5% equity. FHA will finance a loan to value of up to 95%. This is a pretty good deal as most other types of financing have raised the amount of equity required to obtain a mortgage. Your debt to income ratio should be fairly low as well.

Who To Call To Get An FHA Mortgage

With so much at stake, you should always seek the advice of trusted professionals. We believe that information is power and that you should obtain as much information as you can. A great place to start would be through a company such as Lending Tree. They are great because they are able to get multiple loan offers for you with one simple application.

You can then take all your offers and compare them so that you can choose the one that is best for you. You can start by filling out the simple for below and in no time you will have several banks offering your their best rate on a FHA loan or conventional mortgage.

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