What’s required for an FHA loan?
Hey, are you a first-time homebuyer? Are you beleaguered by debts and on the low end of credit scores? These are some issues we often have when trying to buy a new home. Though these challenges remain at the top of your mind, it can still be possible with an FHA loan. So how it is different from a conventional loan? The Federal Housing Administration helps you access loans by private vendors. With even a lower credit score, you can still qualify for a mortgage and live the American dream.
What is the credit score required for an FHA loan?
The good news is with even a low 580 credit score and with a down payment of 3.5%, you can qualify for an FHA loan.
Basic FHA loan Requirements
To qualify for an FHA, you need:
- 10% down payment
- FICO score between 500- 579
- Minimum down payment of 3.5% need FICO score to be 580+
- FHA-approved appraisal
- Mortgage insurance
- Employment history of 2 years
- Your age should be 18 or above
- History of steady employment is also required along with proof of income and recent tax returns
Is it right for me?
An FHA loan might be right for you if you’re:
- A first time home-buyer
- Unable to make large down payment
- You have low to average credit value
- Have debts
- Can’t manage high interest rate
So, what really matters the most is loan-to-value. If you think you fit into the above parameters, then an FHA loan is more likely to be your best bet; otherwise conventional loan is the way to go. Similarly, if you have kept your FHA financing for 30 years, you will be able to pay more in MIP (mortgage insurance premiums) than with a conventional loan. So, get started now and simplify your loan needs with an FHA loan. You can contact us so that we can provide you guidance at every step!