Category: back to work program FHA

Kentucky FHA Loans Compared to Kentucky Conventional Loans


via Kentucky FHA Loans Compared to Kentucky Conventional Loans

 

 

 

Five strategies for first time home buyers Kentucky 2017


 

Source: Five strategies for first time home buyers Kentucky 2017

 

 

 

 

 

Kentucky FHA Loan Guidelines


hud-100-incentive-program-fha-home-loan-group-1gdsgdsgdfgdHere is my Top 5 List for getting a Kentucky FHA Mortgage Loan: 1.A Low Down Payment –  Kentucky FHA Mortgage Loans only require a 3.5% down payment. And what makes that even more attractive is tha…

Source: Kentucky FHA Loan Guidelines

 

FHA Guidelines: How to Qualify for an FHA Loan

The first step to qualifying for an FHA loan is to work with a loan officer at an FHA approved lender. General FHA guidelines that the loan officer will discuss with you include:

  • Documenting an employment history over the last two years. FHA guidelines consider the last two years of employment and look at a steady pay history or employment with the same employer.
  • Providing a valid social security number and proof that you’re a resident of the United States. There are exceptions for resident aliens, but these exceptions will vary by lender.
  • Producing the necessary down payment. FHA loans require a minimum down payment of 3.5% when buying a home — but the down payment may be a gift under certain conditions.
  • Performing the necessary due diligence. The property will need to be inspected by an FHA appraiser and an FHA approved appraisal must be done.
  • Assessing how much you can afford. Although there is some flexibility, the total monthly mortgage payment generally should not exceed 30-32% of your gross monthly income.
  • Assessing your level of debt. Your total debt should not be more than 43% of your gross monthly income. Again, there is some flexibility with this number, but this is a good guideline.
    • Note from mortgage professional, Albert Bui, “the 43% DTI to income is mainly a guideline max for many loans out on the market to comply with certain qualified mortgages (QM) guidelines however in reality the max on FHA I’ve seen is 46.99% on the front ratio (housing payment only) and 56.99% on the backend when factoring in all other obligations. So this means you can borrow up to 46.99% on the front ratio for your housing payment but it doesn’t mean the borrower should max it out, rather they “can.”
  • Knowing your credit score. Minimum credit scores now apply with FHA loans and can vary by lender. A credit score of 580 and above requires a 3.5% down payment, and a credit score of 500-579 requires a 10% down payment. Credit score requirements will vary by lender.
    • According to Mr. Bui, “a 3.5% down payment is the min however there are many down payment assistance (DPA) programs that will either grant you the 3.5% for free with no repayment’s, offer the borrower a 3.5% community 2nd loan that is silent (no payment) and may be forgivable after a certain period of time, or a 2nd that has a silent payment but is due at a certain period of time or payoff in the future. So you can bring in as little as $0.00 with qualifying income or additional requirements.”
  • Disclosing prior bankruptcies. If you have had a bankruptcy that has been discharged, the waiting period is 2 years.
  • Disclosing prior foreclosures. If you have had a foreclosure, the waiting period is 3 years, and you must have good credit

https://www.biggerpockets.com/users/Fin_savvy

Conventional Mortgage May Be Cheaper Than FHA


Conventional Mortgage May Be Cheaper Than FHA.

 

A primary reason for the decline is due to the increase in mortgage insurance premiums and a new rule that no longer allows borrowers to opt out of mortgage insurance after establishing a steady record of payments.

Newsday reports that FHA borrowers are charged an annual mortgage insurance premium of up to 1.35% of the borrower’s outstanding balance on their loan, which is added to their monthly payment. Additionally, a fee of 1.75% is charged up front once the borrower closes on the loan.

For example, Newsday demonstrates exactly how the extra fees can add up: A borrower getting a $200,000 loan, after making a 3.5% down payment, pays $225 per month in FHA mortgage insurance, plus an upfront fee of $3,500. Say you keep that mortgage for 10 years before you sell or refinance — that adds up to about $30,000 in mortgage insurance fees.