Think You Can't Qualify For A Mortgage?

An FHA loan allows first-time homebuyers and others to get a mortgage at a low interest rate. You do not need to be first-time homebuyer to get an FHA loan. FHA is the Federal Housing Administration. FHA guidelines are more flexible than conventional loan programs. Conventional loan programs have scrict guidelines that will have cutoffs on credit score requirements and income requirements. FHA loans allow borrowers to have lower credit scores and less income to qualify for their home loan.

Also, down payment is more flexible with the FHA program. Borrowers can finance 97% of the purchase price and put down 3%. In some instances, when combined with other types of loans, the down payment can be zero. Unlike traditional loans, this money may also be a gift to the homebuyer and does not need to be secured as the homebuyer’s own money. There are many public programs that give this gift to homebuyers. Places like AmeriDream, HART (Housing Action Resource Trust), and Partners in Charity.

FHA guidelines are set at 41% DTI. The DTI stands for debt-to-income ratio. So if you make $3000 a month you will qualify for a home payment of $1230. So to see about how much of a monthly mortgage payment you can afford, take your monthly income and times by .41 (ex. 3000x.41=1230). However, if you have a stable job and good credit, there are circumstances where FHA will allow you a DTI of up to 50%DTI. So if you are interested in seeing if you qualifying for an FHA loan, please visit the link below.

Author: Ryan Russo