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Our Basic Guide to Getting an FHA Mortgage Loan

Brady Webb
September 21, 2024

For many people, the American dream includes owning a home. But for many would-be homeowners, the reality is that coming up with a down payment and qualifying for a mortgage can be difficult. The Federal Housing Administration (FHA) makes it possible for people with limited means to buy a home by insuring mortgages.

What Is an FHA Loan?

An FHA loan is a mortgage insured by the Federal Housing Administration (FHA). The FHA is a division of the U.S. Department of Housing and Urban Development (HUD). FHA loans are available to all types of borrowers, not just first-time homebuyers.

FHA loans can be used to purchase a home or refinance an existing mortgage. In that regard, FHA loans are available in fixed-rate and adjustable-rate mortgage (ARM) options.

FHA loans are an excellent option for first-time homebuyers because they offer more flexible credit and income requirements than conventional loans. And, if you’re looking for a more affordable mortgage, an FHA loan may be a good option because it allows for smaller down payments.

Of course, preparing in advance can boost your chances of qualifying for an FHA loan, so the list below explores the most important factors you need to know.

How to Qualify for an FHA Loan

Prepare for a Low Down Payment. One of the most important things to understand when preparing to qualify for an FHA loan is that you need to have a down payment ready. To qualify for an FHA loan, you must have a down payment of at least 3.5 percent, which is one of the lowest down payment requirements of any mortgage program. If you don’t have the necessary down payment saved up, you may still be able to qualify for an FHA loan through a down payment assistance program. There are several down payment assistance programs available, and you may be able to qualify for one of these programs if you meet specific income requirements. Improve Your Credit Score. If you’re hoping to qualify for an FHA loan, you’ll
Improve Your Credit Score. If you’re hoping to qualify for an FHA loan, you’ll need to have a good credit score. The minimum credit score for an FHA loan is 580, but the average credit score for an FHA loan is 700. If your credit score is below 580, you’ll need to work on improving it before you can apply for an FHA loan. You can do this by paying your bills on time, maintaining a good credit history, and using a credit monitoring service to keep track of your credit score. Once you have a good credit score, you can begin the process of applying for an FHA loan. The first step is to fill out an application with your chosen lender. You’ll need to provide information about your employment, income, debts, and assets. After you submit your application, the lender will review your information and decide whether or not you qualify for an FHA loan. If you do, they will issue you a loan estimate, which will outline the terms of the loan.
Invest in Hiring a Realtor Who can Help Negotiate with the Seller to Pay 6 Percent of Your Closing Costs.If you’re planning to finance your home purchase with an FHA loan, you can ask the seller to pay a portion of your closing costs. This can be a great way to reduce the amount of money you need to bring to the closing table. To qualify for this, you’ll need to make a formal request to the seller in your purchase offer. The seller isn’t required to agree to your request, but it’s worth asking. If the seller does agree to pay some of your closing costs, be sure to get the agreement in writing, so there’s no confusion later on.

FHA Loans Make it Possible to Settle Down Into Your Dream Home

FHA loans make it possible for first-time home buyers to purchase a home with as little as 3.5 percent down. In addition to its accessibility, one of the best parts of an FHA loan is that it gives homebuyers plenty of chances to qualify.

For instance, if your spouse has a poor credit score, you may still be able to qualify for an FHA mortgage loan. Your spouse’s credit will be considered, but it cannot be the sole reason for declining your loan.

So if your spouse’s credit is preventing you from getting a loan, consider an FHA mortgage loan. To that end, if you’re ready to buy a home but don’t have perfect credit or large down payment, an FHA loan may be a good option.

If you are looking for the best Louisville mortgage brokers call us at (502) 327-9770 for Louisville KY Office and for Cape Coral FL Office (239) 766-8344, then you have come to the right place. American Mortgage Solutions KY offers a wide range of services that can help you with all of your real estate needs, so get in touch with us today and see how we can help finance the home of your dreams. In addition to Kentucky, we are also licensed in Colorado, Florida, Indiana, Tennessee.

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CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550.

THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIAL MORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.

American Mortgage Solutions follows all Equal Housing laws. As prohibited by federal law, we do not engage in business practices that discriminate on the basis of race, color, religion, national origin, sex, marital status, age, because all or part of your income may be derived from any public assistance program, or because you have, in good faith, exercised any right under the Consumer Credit Protection Act. Disclaimer: Programs subject to change without notice. All borrowers must qualify per program guidelines.

These materials are not from HUD, FHA, the USDA, or the VA. These materials were not approved by any government agency. They are independent of any government agency. We are not in any way affiliated with any organization listed or referenced within this website, including HUD/FHA/USDA/VA. The inclusion of various education, information, web links, or materials are not an endorsement of the Sender or any of its employees or business partners. For information directly from HUD/FHA, visit https://www.hud.gov/guidance For information directly from the VA, visit http://www.benefits.va.gov/HOMELOANS/ For information directly from the USDA, visit http://www.usda.gov/wps/portal/usda/usdahome?navid=GRANTS_LOANS