Fha Home Loans: General Qualifications And Benefits
The purpose of FHA (Federal Housing Administration) home loans is to promote homeownership
. You can get FHA home loans with small downpayment. Thereby, you can buy a home easily. However, you should remember that not all the applications are approved by FHA. There are some FHA home loan qualification guidelines. Let us know general qualification guidelines and benefits of FHA home loans.
Eligibility
You can qualify for FHA home loans provided you fullfil the following criteria:
1.Employment: You have a regular income. You will be given preference if you are working with same employer for at least two years.
2.Steady income: Your wage of last two years should either be same or must show an increasing trend. If you have regular increments, bonus, then these will be regarded as a part of income. There is no minimum income limit for qualifying FHA home loans.
3.Credit score: You can qualify for FHA home loans with low credit scores. Sometimes you can even get home loans without any credit score.
4.Bankruptcy: You will be apply for FHA home loans after two years of bankruptcy. However, the lenders check that whether you have a good credit standing after bankruptcy. They also check whether all the outstanding tax liens have been paid after bankruptcy.
5.Foreclosures: Foreclosures have to be of at least three years old. Lenders look at whether you have good credit after foreclosure.
6.Down payment: You can qualify for FHA home loans with low downpayments. Generally, the required downpayment is 3% of the purchased home price. In some home loans, your friends and relatives can make the downpayment for you.
7.Debt-to-income ratio: Your new monthly house payment must be around 31% of your gross monthly income.
3 Benefits of FHA home loans
The 3 benefits of FHA home loans are given below:
1.Qualification process: The qualification process is easier as compared to conventional home loans.
2.Downpayments: You need to make low downpayments for these home loans.
3.Prepayment penalty: There is no prepayment penalty. This a great advantage for the subprime buyers.