Wondering about buying your first home? Are you ready to move up or down-size? Have you heard they aren't making loans any more? Or that you have to have LOTS of money to even qualify? Let’s unravel the mystery…..
In simple terms Lenders want:
- Stable work history; Two years Employment in the same field is considered stable. School can be considered part of those two years.
- Strong income; your new House payment + all debt should not exceed 33% of your gross income. Depending on which program best meets your needs.
- Good credit; your credit score needs to be 620 or higher, in most but not all cases.
FHA is more flexible than Fannie Mae/Freddie Mac Conforming/Conventional Loans - This is the time to call your local Credit Bureau and request your FREE, once per year, credit report.
By evaluating these steps, you have prequalified yourself!
If you have a small nest egg/savings then an FHA loan will make more sense, in fact, up to $725,000 it makes sense! There are many reasons why:
- Sellers can contribute up to 6% of the purchase price with an FHA loan.
- Aunt Sally can 'gift' you cash for a down payment.
- You don't need stellar credit with FHA loans! Bad things happen to Good people, they know that!
- You DO need, generally, 3 Trade-lines showing 2 years Excellent Payment history.
- Trade-Lines can be your cell phone bill, electric bill, rent history, car loan (even on a tote the note lot).
With FHA, your credit can be quite damaged as long as you can show it was caused by a job loss or other difficult situation, not money miss management. For more in-depth information on FHA loans check out this fabulous resource.
Stay tuned….next time we'll discuss WHO you call for a loan!
I invite your questions on the forum on our social network!
Melissa has sold New homes, Old home, Custom homes and now works exclusively helping Investors purchase Under Valued Properties. A SAHM to 3 Lazy Cats, she spends her spare time writing her blog The Cottage Rose and putting the finishing details on her first Frugal E-Book due out in November.
Photo source
Loading ...
Comments are closed.