Being able to afford your home is one of the most significant uncertainties when buying a home. Are you thinking about how to apply for an FHA loan? Frustrating, isn’t it to find your dream home only to find out that you can’t afford it? If this is your case, then maybe an FHA loan is going to be the solution to your problems.
To apply for FHA loan, you don’t need to have a significant amount for a down payment, especially if you have a good credit score. If your credit score is 620 and above, you can make a down payment of as low as 3.5%! Before you get discouraged because your credit score is in the 580 range, you need not worry because you can still apply and possibly be approved if you prepare a downpayment of at least 10%. So, if you still have time, try to improve your credit score as much as possible to avail of better rates.
When you apply for FHA loan, the lender will look at your income to see if your income is stable or if there is a reasonable increase in time. There will be other requirements aside from your credit score and the downpayment. You must also submit your tax returns or at least two months’ worth of your pay stub. These are your proof of income and will prove that you have a steady income and can help you sustain your FHA loan repayments.
Another essential detail is that the house you want to buy would be your primary residence. You cannot use your FHA loan to purchase homes for business or investment purposes. When it comes to the issue of debt-to-income ratio, your DTI should be less than 43%. Still unsure if you want to apply? Let us know how to help you apply for FHA loan.