FHA loans, short for Federal Housing Administration, are government-insured mortgages that make homeownership more accessible. They have more lenient credit score requirements and lower down payment needs than conventional loans. In addition, they offer more flexible terms and require less documentation than other mortgage options.
When considering whether or not an florida fha loan application is right for you, it’s important to consider the pros and cons of this type of mortgage. These loans are not suited for everyone and come with a few additional fees that you should be aware of. In addition, FHA loans have a higher debt-to-income ratio than conventional mortgages. Generally, lenders expect borrowers to have a DTI of less than 57%.
The FHA requires a minimum down payment of 3.5% of the home’s value. This can be sourced from your own savings or through gifts from family members. Lenders will also want to verify steady employment and consistent income for two years. Typically, this will require pay stubs and tax returns.
If you have a bankruptcy, foreclosure, or foreclosure in the past three years, you will likely not be approved for an FHA loan. However, you may be able to find lenders that will work with you on a case-by-case basis if you have an established repayment plan or are in the process of re-establishing credit.
Before you apply for a florida fha loan, it’s best to have a clean credit report. If possible, raise your credit score to at least 620 and dispute any accounts that are not accurate. florida fha loan application