What is an FHA loan?
The list of requirements to qualify for an FHA loan is extensive and includes the restriction of new FHA loans solely to primary residence occupancy and having the property assessed by an FHA-approved appraiser. As of 2014, a person’s front-end ratio typically has to be less than 31 percent of his gross income, although it is possible to get a loan approved with a ratio as high as 46.99 percent. On the other hand, a person’s back-end ratio, which includes property taxes, mortgage payments and home insurance, needs to be lower than 43 percent of his gross income, although the approval can go through in cases where the ratio reaches as high as 56.99 percent.
What are FHA loan requirements?
As of 2015, FHA loan requirements include stable employment, a valid Social Security number, a 3.5-percent minimum down payment and a property appraisal by a
FHA-approved appraiser, according to Zillow. An applicant must also meet the required credit score as well as front-end and back-end ratios.
How do you apply for FHA home loans?
To apply for an FHA loan, contact a local FHA lender and complete an application. It is necessary to provide the lender with documentation concerning income and employment before the application is processed. The application process may take several weeks or longer, depending on the lender and the ability to find a home within the buyer's price range.
What is the difference between FHA and conventional home loans?
An FHA loan is backed by the Federal Housing Administration and is offered through specific lenders, while a conventional home loan can be obtained by almost any lender and isn't backed by an agency, according to SFGate. FHA loans are also offered according to specific parameters.
How is an FHA loan different than a conventional loan?