An FHA loan is a mortgage insured by the Federal Housing Administration and issued by FHA-approved lenders. It is a specially designed home loan program for the low to medium income group people who want to buy a home but have high credit scores or can’t come with a good down payment.
And as there are various lenders who offer FHA loans, getting approval is not difficult. But to get the loan, you have to fulfill the FHA loan requirements Texas. Thinking about what the requirements are? Here are the ones –
Down payment requirement
The minimum down payment requirement for an FHA loan is 3.5%. If you are a single-family borrower with a 580 credit score or above, you can get approval for this loan with this down payment. For homebuyers with credit scores between 500 and 579, the minimum required down payment is 10%. But the higher down payment you can come with the better it would be for you.
The debt-to-income ratio, also known as DTI, is the percentage of your pre-tax income that you spend on monthly debt payments, along with the mortgage, credit cards, student loans, as well as other obligations. You can use an online debt-to-income ratio calculator to figure out where you stand. The FHA requires a debt-to-income ratio around 50%. But DTI requirements may vary based on your credit scores and other factors.
In order to get approval for this loan, no minimum or maximum income is required. But there are some guidelines that you have to follow. You should have at least two established credit requirements, such as a credit card and a car loan. You should not have delinquent federal debt or judgments, tax-related or otherwise, or debt associated with past FHA-insured mortgages. Besides, you should have an account for cash gifts that help with the down payment. These gifts must be verified in signed, writing and dated by the donor.
You have to come with some documents to get approval for an FHA loan. The primary document required is proof of a Social Security number. Besides, you should provide original pay stubs, W-2 forms or valid tax returns, when necessary. There are other stipulations too. But an FHA-approved lender will walk through the details if other requirements apply to you.
According to the regulations of the FHA, U.S. requirement is not needed to be eligible for this mortgage. But the mortgage should determine the residency status of the borrower depending on the information provided on the mortgage application and other applicable documentation. For non-permanent residents, these loans are only available to the ones, who will use the property as their primary residence, is eligible to work in the country, has a valid SSN and other required things, satisfy the same requirement, terms and conditions as those for the U.S. citizens.
So, work on to meet these requirements and get approval for this loan early.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.