The Federal Housing Administration (FHA) is a U.S. government agency that offers mortgage insurance on FHA-insured mortgages. The FHA is an important tool for first-time homebuyers who may have lower credit scores and less than perfect finances. The FHA is also a good fit for those who don’t qualify for other mortgage options, including most conventional mortgage lenders.
What Is An FHA Mortgage
The Federal Housing Administration (FHA) is a U.S. government agency that offers mortgage insurance on FHA-insured mortgages. The FHA is an important tool for first-time homebuyers who may have lower credit scores and less than perfect finances. The FHA is also a good fit for those who don’t qualify for other mortgage options, including most conventional mortgage lenders.
The FHA mortgage is the most common mortgage option for first-time homebuyers. The FHA mortgage is a mortgage backed by the government, which means that the lender insurance pays off if you default on your mortgage. The FHA mortgage has very low interest rates and is open to borrowers with lower credit scores and less than perfect finances.
How Does An FHA Mortgage Work
The FHA will approve you for an Maine FHA Mortgage after they verify your income and assets. They will verify your income and assets by looking at your bank and brokerage account statements, and they’ll do a search of your name on the National Crime Information Center (NCIC) and the Social Security Administration’s database.
They also ask for a copy of your driving record and credit report. In addition, you’ll need to complete an online application. Once the FHA approves you for an FHA mortgage, you’ll have 30 days to find a lender who will offer you an . As soon as you find a lender who will offer you an FHA mortgage, cancel all your other lenders. Then you can apply with the FHA.
FHA Mortgage Requirements
- A credit score of at least 580
- Your total debt-to-income (DTI) percentage cannot be more than 43%
- Your combined total debt amount cannot exceed your gross income
- Your annual income and debt must be combined to be used as a comparison to other homebuyers
- You must have at least a 5% down payment
- You cannot have a bankruptcy in the last five years, or have a foreclosure in the last three years
FHA Mortgage Broker
You can work with a third party that brokers FHA mortgages for you. You can use a mortgage broker to shop for the best interest rate, to complete the application and to submit the loan offer to the lender. You’ll still complete the application on your own, but the broker will submit the offer for you. Mortgage brokers have been around for a long time and are one of the most common ways people obtain a mortgage.
There are many different types of mortgage brokers and they range in quality and experience. There are mortgage brokers that specialize in Freddie Mac and FHA mortgages, conventional loans, VA mortgages and even home equity loans. These brokers are generally independent contractors who work on behalf of the clients they work with.
This means that each broker can have different rules and different requirements to work with clients. If a broker doesn’t work with you, they don’t have to work with any other client and they can use that time to shop for a different mortgage.
