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FHA home loans are mortgages that
are insured by the United States government, more
particularly the Federal Housing Administration. FHA
in itself does not make the loans. What they do is
that they insure the loans that were in turn, given
out by their qualified group of commercial lenders.
With the in
troduction of the FHA home loan,
a lot of low-income Americans were able to secure a
loan to purchase their homes. FHA home loans are
conceptualized in 1930's during the time of the
Great Depression. The government acted to subsidize
loaning programs through FHA in response to the
growing rate of defaults and |
foreclosures. The good news is that FHA is
for every American. But they have to follow the set guidelines in
applying for it. To know if you qualify for an FHA home loan, here
is a checklist that you can use. See for yourself if you can take
advantage of FHA's easy mortgage loan plans.
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First and foremost, you should have a steady
employment history. By this, you should be able to prove to the
agency that you have at least two years of service with your
current employer. Stability of job and income is the main
factor. That's the primary requirement of FHA.
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You should have an increasing income, or at
least, a consistent one. So that FHA can correctly assess your
capability to pay, you should show them that in your current
job, you are earning a fixed amount. And if in case it is not
the case, your income should follow a steady rising pattern, not
a fluctuating one.
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You should be able to boast about your credit
history. Your credit report definitely says a lot about your
financial status. It is FHA's requirement that all their
applicants are in good credit standing. And not only that, they
also require that there is not a single payment over due for
more than a month within the last two years in their credit
reports.
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You should also show that you've got no
history of bankruptcy. Or even if you had, it should be at least
two years before. You should also show and that you already had
regained financial stability for the past two years. You should
be in a good credit standing for two consecutive years.
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Your foreclosures, if any, should be three
years old at the very least. This one follows the same principle
as the bankruptcy rule stated above. It is a must that for the
past three years, what you have is a good credit standing.
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You can only apply for a loan that is 30% of
your total monthly income. If you have everything else worked
out, remember this last important detail: FHA will approve you a
loan corresponding to your gross income. So, do not apply for
one that exceeds 30%. Your application will just be denied. Look
and settle for a house that is just within the set limits.
These are the different points to consider when
applying for an FHA loan. You should qualify in the every step
stated here. These are the exact guidelines that FHA is currently
following.
But you have to know that pre-qualifying for the
loan is just the first step. It is not a guarantee of anything. All
it means is that FHA will merit a review of your application and
proceed from there. Your dream of buying the perfect house is still
in the cooking stages, so to speak.
Pre-qualification is the first step to getting a
loan, though. Needless to say, it is an important step altogether.
If you don't pass the pre-qualification stage, there is no way that
you will be able to purchase the house that you always wanted, at
least not through FHA.
What the pre-qualification step really does is
that it assesses your income, your assets, and your ability to pay.
After which, you are to show it to the lender waiting on the wings.
Then they further study your case. You'll get the loan once they see
that you are indeed, financially stable.
With all these said, go ahead and start
evaluating yourself for an FHA home loan. Take advantage of what
they are offering today. This is your chance to own the house of
your dreams. Take it while it is still there.
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