Things You'll Need
Before applying for any mortgage, it is best to go online to Annualcreditreport.com and get all three of your credit reports. This is free once per year, but there is a small charge for scores. (Most banks require at least a 620 credit score to approve an FHA loan for a purchase or a "cash out" refinance loan. Some are now requiring a 640 credit score, however, that is the limits set by the bank who is funding the loan. FHA will turn down a loan request when the scores are in the low 500's). Check each report for duplications, errors and outdated information. Dispute these by calling the customer service number on page one of each report. Give the bureaus 30 days to respond, and your scores should increase.
Gather all of the loan documents listed above, placing them in a folder, and call your favorite lender who writes FHA loans to schedule an appointment. The lender may want to pre-quality you by phone before having you come in to complete the application process. This is
helpful since it get the process started in a more efficient manner. Write down your questions and concerns, and be sure to get them all answered in this meeting.
Your lender will prepare for you a "good-faith estimate," which will give you all of the costs involved in closing the loan. If your credit, income and down payment funds are sufficient to qualify you for this loan, the lender will generate an FHA package which will require your signatures. Go ahead and sign and date these documents.
Have your lender run copies of the income and asset documents that you have brought to your meeting. When all documents are signed, the loan agent must scan and forward to the funding lender, which may not necessarily be the bank). When these documents have been viewed, you will receive a signature package to sign. Once that package is received, the loan officer will need to collect your funds for appraisal and the official credit report for the file. You will receive the totals needed so you will be ready to begin the loan process..