Are you looking to buy a house? It’s an exciting time, to be sure. But it’s a lot of work.
Finding the perfect home is hard enough.
You must also deal with FHA lenders, gather financial paperwork, and jump through hoops to meet all the FHA loan requirements.
Before you throw your hands up in despair, know that we’re here to help.
The Wendy Thompson Lending Team is like a breath of fresh air.
We’ll help you figure out your FHA loan eligibility and check all the boxes to get you into your new home.
FHA LOAN REQUIREMENTS: WHAT YOU NEED TO KNOW
FHA loans are home loans backed by the Federal Housing Administration (FHA). If you think they’re only for first-time homebuyers, we’ve got good news:
You don’t have to be a first-time homebuyer to qualify for an FHA loan.
That’s one reason we love FHA loans. Almost anyone can qualify!
Here’s why FHA loans are such an attractive option:
- Down payments are low
- Credit score requirements are low
- Closing costs can be added to your loan
Sounds pretty good, right?
So what’s the catch?
Well, there are a few FHA loan requirements you need to know.
Keep reading to learn more.
WHAT ARE THE INCOME REQUIREMENTS FOR AN FHA LOAN?
FHA loans do not have income requirements.
That means there’s no minimum income to qualify. And you won’t be disqualified for having too high of an income, either.
But here’s the thing...You’ll need a steady income, and your lender might ask for your pay stubs, W-2s, tax returns, and bank statements to verify your earnings.
FHA LOAN LIMITS FOR 2020
The FHA program limits how much you can borrow to buy a house. Keep in mind that FHA loan requirements in 2019 vs. 2020 are a little different.
And that isn’t all…
FHA loan limits can vary by state, county, or metropolitan area.
You can look up mortgage limits by area on the U.S. Department of Housing and Urban Development’s website.
Or you can just call us.
Because that’s what we’re here for: to help answer all of your FHA loan questions!
Here are a few examples of state limits for FHA loans:
- Even though the amount you can borrow will depend on where you live, most of the country has a loan limit of $331,760.
- Higher loan limits are available in some areas. For instance, if you live in Bucks County, Pennsylvania, you could borrow up to $408,250. And Pike County? FHA homebuyers there can borrow up to $765,600.
- The amount you can borrow can also be higher in some areas of North Carolina, Ohio, California, Texas, Georgia, Florida, New York, and other states across the United States.
Remember: we’re here to help with all of the details.
WHAT ABOUT FHA 203K LOAN REQUIREMENTS
What if you want to buy a fixer-upper and need to borrow extra cash to cover renovation costs?
It’s called an FHA 203k loan. It’s an FHA loan that lets you borrow beyond the listing price of the house so you have extra money available for repairs and updates.
Two types of FHA 203k loans are available:
- Standard 203k: Covers major structural changes and repairs
- Streamline 203k: For light remodeling or replacement of appliances
The FHA 203k loan requirements are similar to what you need to qualify for a regular FHA loan. You must:
- Meet a minimum credit score
- Save up for a down payment
- Use the home as your primary residence.
FHA LOAN CREDIT SCORE REQUIREMENTS
A strong credit score is sometimes the biggest hurdle to overcome when applying for a home loan. And that’s the beauty of an FHA loan…
The credit score requirements are lower than you might expect.
To qualify for a 3.5% down payment, we recommend you have a credit score of at least 640.
Just be mindful that the higher your score, the better interest rate you could get. Interest is how much it costs to borrow money to purchase a home. That means lower rates can save you a significant amount of cash over the life of your loan.
NEED TO IMPROVE YOUR CREDIT SCORE FOR AN FHA LOAN?
Even if your credit score is “excellent,” bumping your credit score a few points can only help when you’re trying to buy a house.
Here’s what to do:
- Pay your bills on time
- Check your credit report and dispute inaccuracies
- Pay off debt and keep credit card balances low
- Only open new credit accounts that are necessary
- Keep unused credit cards open (as long as you’re not paying annual fees)
You may want to set up automatic payments to make sure you don’t miss a due date. It’s also an excellent way to avoid paying late fees.
LOOKING FOR A HOUSE? LET US HELP YOU!
It doesn’t matter if you’re buying your first house or fourth: FHA loans are an excellent option to finance your dream home.
They include a lot of flexibility about how much down payment you need, and the minimum credit score is lower than other home loan programs.
Are you ready to explore homeownership?
Give us a call.
We’ll walk you through buying a home so you’ll have less stress when qualifying for an FHA loan.
Deciding on the right FHA lender is the most important decision you will make. Choosing the wrong lender can result in you losing your dream home or costing you hundreds of thousands of dollars in more interest over the life of your mortgage.
Don’t make that mistake, contact the Wendy Thompson Lending Team today!
You can start the process by clicking the yellow 'See if I'm Eligible' button on the right side bar under the 'Start your quote for a Home Loan' or call Wendy’s Team directly at (901) 250-2294, to get started on living the American Dream in the home of your Dreams!