FHA loan requirements near Austin TX provide great assistance to many first time home buyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in policy may have put the loans just out of reach for some would-be homeowners with questionable credit history.
For those interested in applying for an FHA loan, applicants are now required to have a minimum FICO score of 580 to qualify for the low down payment advantage, which is currently at around 3.5 percent.
FHA Credit Score Requirements in Austin TX
If your credit score is below 580, however, you aren’t necessarily excluded from FHA loan eligibility. Applicants with lower credit scores will have to put down a 10 percent down payment if they want to qualify for a loan.
So if you’re planning to buy a house, and your credit score doesn’t meet the minimum, you should weigh the advantages and disadvantages of putting down a larger down payment or using those funds to try and improve your credit score first.
For most borrowers in Austin Texas, the FHA requires a down payment of just 3.5 percent of the purchase price of the home. That’s a “huge attraction, ” says Dennis Geist, senior director of compliance and fair lending at Treliant Risk Advisors and formerly a vice president of government programs for another lender. In late 2014, Fannie Mae and Freddie Mac reduced minimum down payments to 3 percent from 10 percent, but such loans have limited availability.
FHA Down Payment Requirements near 73301
There is no minimum — or maximum — salary you can earn that will qualify or prohibit you from getting an FHA-insured mortgage. However, you must:
Have at least two established credit accounts. Examples: a credit card and a car loan. Not have delinquent federal debt or judgments — tax-related or otherwise — or debt associated with past FHA-insured mortgages Account for cash gifts that help with the down payment. These gifts must be verified in writing, signed and dated by the donor.
FHA Income Requirements Close to Travis County
You knew there had to be a catch, and here it is: Because an FHA loan does not have the strict standards of a conventional loan, it requires two kinds of mortgage insurance premiums: one is paid in full upfront -– or, it can be financed into the mortgage –- and the other is a monthly payment. Also, FHA loans require that the house meet certain conditions and must be appraised by an FHA-approved appraiser.
Upfront mortgage insurance premium (UFMIP) — Appropriately named, this is a one-time upfront monthly premium payment, which means borrowers will pay a premium of 1.75% of the home loan, regardless of their credit score. Example: $300, 000 loan x 1.75% = $5, 250. This sum can be paid upfront at closing as part of the settlement charges or can be rolled into the mortgage.
FHA Loan Credit Requirements Near Austin Texas
Your total debt-to-income ratio — including the new mortgage, credit cards, student loans and any other monthly obligations — must be 50% or less, according to Sullivan.
The property must meet FHA geographic loan limits. In 2017, that’s generally $275, 665 for single-family homes in low-cost areas and $636, 150 in high-cost areas. Alaska, Hawaii, Guam, and the Virgin Islands have limits up to $721, 050.
An important part of your loan application is your credit record, including your credit score. As of June, 2015, the minimum FHA loan credit score is 580. If your credit score is between 500 and 579, you may be eligible for FHA financing as long as the loan-to-value (LTV), the percentage of the home loan compared to the value of the property, is 90 percent or less, so you’ll need a down payment of at least 10 percent of the purchase price. If you are applying for a home loan with a co-applicant, such as a spouse, each of your credit scores will be taken into consideration, and the decision will be based on the lower score.
FHA Credit Requirements Around Austin TX
FHA has financing for mobile homes and factory-built housing. We have two loan products – one for those who own the land that the home is on and another for mobile homes that are – or will be – located in mobile home parks.
In addition to borrower qualifications, the property itself must meet certain requirements before you can qualify for an FHA mortgage.
Investment properties are not eligible. The property can’t be a flip: meaning you can’t buy a house within 90 days of a prior sale. You must take title to the property in your own name or in the name of a living trust at settlement. The loan must be for a principal residence, and at least one borrower must occupy the property within 60 days of closing. An FHA appraisal includes a strict inspection, assessing a home not only on value but also on minimum property standards.
FHA House Requirements in Austin Texas
The Federal Housing Authority sets maximum mortgage limits for FHA loans that vary by state and county. In certain counties, you may be able to get financing for a loan size up to $729, 750 with a 3.5 percent down payment. Conventional financing for loans that can be bought by Fannie Mae or Freddie Mac are currently at $625, 000.
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