The Basics Of An Fha Loan
If you are looking to buy a new home you have probably heard of an FHA loan
. This term may still be obscure and possibly foreign to you.
Taking the time to understand what these loans are could potentially be life changing for you. You may be able to purchase a home that you never imagined you would be able to purchase.
First, you have to understand what FHA is. FHA stands for the Federal Housing Administration.
This administration is part of our federal government. The mission of this administration is to enable people that are looking for a home loan, whether it is for a new home an existing home or even home repairs, to qualify for the maximum amount of money.
They are able to do this by minimizing the risk of a loan for the lender. They seek to give each party in the transaction the best deal possible.
Our congress created this administration way back in 1934. It was not until 1965 that it became a part of the Department of Housing and Urban Development's Office of Housing.
This administration was developed in the wake of the Great Depression. The housing market had crashed and the government understood that they needed to step in and help the lender and the buyers.
So, now that you know what the FHA is you may be interested in one of these loans. There are many people that are interested in their loan and wonder about their credit score.
If you have a poor credit rating and you are looking to take out a loan you may have already run into some problems. The FHA offers a Consumer Credit Counseling program for all clients that are afraid they will not be able to take out a loan.
If you have had previous problems related to your credit score you should work to improve that score so that you have a better chance of being approved for a loan. If your credit score is poor it is a possibility that you may be denied a loan because of the risk associated with your credit score.
There are a lot of people in our society that struggle ascertaining a loan because of their low credit score. Do not lose hope if you are in this situation, it is possible to find a way to be approved for a loan.
When you start the process of getting an FHA loan you are going to want to make sure that you have been in a satisfactory payment situation for a minimum of a year. You should have been in this status for at least a year before your date of application.
To get started with this housing administration you are going to need to have access to a lot of your personal information. This personal information is going to be submitted on your loan application.
When you go speak to your loan officer you need to ask him or her for a complete list of required data. You should make sure that you give yourself plenty of time to get all of the information together.
Some people underestimate the amount of time they will need to get this information. You should know that the information you will need to give is extensive.
You will have to record all of the addresses for your former homes in the past two years and the names and phone numbers of your employers from the past two years. Your gross monthly salary and your W2s will also be required.
You should know ahead of time that you will need your income tax forms that you have filled out and filed with the Internal Revenue Service. If you have misplaced these forms you will need to contact the IRS and get a copy of the form.
Getting a copy of these forms can take some time; make sure that you allow adequate time for yourself. This is a process that you should not rush because you do not want to make mistakes.
If you are a veteran you are going to want to make sure that you fill out the proper forms. You will want to make sure that you have the DD Form 214 filled out.
Although it seems like there is a lot of paperwork an FHA loan can be a great way to get a loan for a home. If this loan is something that will work for you do your research and take your time to get everything done correctly.
by: Tom Selwick
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