How To Apply For a Loan Fha

Introduction

FHA (the Federal Housing Administration) is the world’s largest mortgage insurer. They protect lenders whenever a mortgage is defaulted upon. Originally FHA was created to make it possible for low to moderate-income families to be able to own their own home. This is because you only have to make a 3% down payment, which is also why people find them to be so attractive. Another benefit is that the lender is not allowed to charge you any unnecessary fees. Of course, you can also use your loan FHA in conjunction with state bonds and grants.

 

Step 1

Gather together your bank statements, pay stubs and any other information about assets (i.e. pension plans) that you have received over the past two months. You will also need a valid social security number and driver’s license. If you have a Permanent Resident Alien card, bring it with you too but make sure that it is both valid and up-to-date. Your lender will need to make copies of all of these things.

Step 2

Bring at least two years of W2s with you whenever you go to apply for a loan FHA. In some instances you may also need the tax returns from these years as well. If you don’t have these available, you can contact your local IRS office. They will be able to mail you copies of these documents.

Step 3

Sometimes you will also need to bring other information with you whenever you apply for a loan FHA. If applicable, you will want to bring information about your divorce, the settlement agreement and child support orders. You may also need to prepare a Letter of Explanation. This should be done for anything that you know will be brought into question, such as if you were unemployed for more than two months. All of this information will be used to calculate your debt to income ration in order to see if you qualify for a loan FHA.

Step 4

Take some time to fix your credit before you apply for a loan FHA. While you don’t need to have excellent credit, you don’t want to have any red flags whenever they pull up your credit report. By taking the time to fix things you will also accelerate the process that is involved in applying for a loan FHA.

Step 5

Once you have gathered all of this documentation together you will be ready to apply for a loan FHA from an FHA approved lender. Make sure that you are very accurate whenever you are filling out your application for a loan FHA because this information will be compared against that which is obtained from your credit report. There will be a lot of questionable things found through this process. For instance, if you have had more than one name, numerous addresses or owned a home in the past this will all show up during your loan FHA application process. Therefore, it is a good idea to tell your lender of these things ahead of time so that you can write a Letter of Explanation in regard to them.

Tips

HUD issues these loans that have numerous advantages to them.

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