Begin Getting Prepared For Your FHA Residence Mortgage
FHA home loan resources abound – you should know how to use online mortgage calculators, pre-qualify for a home loan, and have free credit reports to help you research and plan your new home loan or refinance loan.
Let’s start with these free credit reports – the Consumer Financial Protection Bureau (CFPB) is reminding home loan applicants that they are entitled to “A free credit report every 12 months from any of the three major consumer credit reporting companies (Equifax, Experian and TransUnion). “According to the official CFPB website.
Obtaining your credit report from all three agencies is a great way to begin the loan planning phase. Get your credit reports a year in advance of your loan application and remember to keep monitoring your creditworthiness afterwards.
This gives you plenty of time to deal with potentially outdated or inaccurate information, to contest identity theft activity, and to address credit issues that may need to be addressed before applying for a new loan.
You can request your free credit reports all at once or order them separately as needed.
So how do you determine how much to budget each month as you prepare for a home loan? Online FHA mortgage loan calculators can help you get a rough idea of how much you can borrow and how much your monthly payment could be based on a variety of factors:
… and other factors.
Using an online mortgage calculator should be considered an estimate and NOT an exact final amount; More accurate figures are only available after loan approval and include data such as your mortgage insurance premium (do you finance the mortgage insurance premium up front?), Interest rates, property taxes, etc.
The approval of a home loan is NOT prequalifying. But pre-qualifying is a way for you and your loan officer to find out how much you can potentially borrow based on a variety of factors including income, budget, price ranges, and anything with an eye to the FHA credit limits for your area.
Prequalifying for a loan tells the seller that you mean business and not window shopping. The pre-qualification also gives you and the lender a working relationship before you fully commit to purchasing the home.
How do you qualify? You need the zip code of your planned new home. Also, be prepared to provide an amount that you want to use as a deposit.
Also helpful? Whether or not you served in the military, and some basic information about your current location and other details that may be required, be sure to ask if you are unsure about any aspect of the process.
Your actual loan approval will depend on the valuation which will help determine the market value of the home and that the property meets the FHA minimum standards.
Use a pre-qualification checklist – come to the loan process with a stable employment history and steady income over the past two years, and keep in mind that late or missed payments in the 12 months leading up to the application can affect the loan approval process.
Find out more about the path to home ownership
Take the guesswork out of buying and owning a home. Once you know where you want to go, we’ll get you there in 9 steps.
Step 1: How Much Can You Afford?
Step 2: Know Your Home Buying Rights
Step 3: basic mortgage terminology
Step 4: buy a mortgage
Step 5: shopping for your home
Step 6: Make an offer to the seller
Step 7: get a home inspection
Step 8: home insurance
Step 9: what to expect upon graduation