FHA Home Loans Refinancing

5 Steps to Get Pre-Approved for a FHA Home Loan

02.15.11

With home prices continuing to fall around the country and mortgage rates hovering 4%, now is a great time to get approved for a FHA home loan.  In today’s market is pays to have your “ducks in a row” before getting pre-approved for a “FHA refinance loan”.

1. Keep your credit scores as high as possible.  If your fico scores are above 680 you will have more options for a new home loan.  If your credit scores are lower there is still FHA mortgage options, but the higher the scores the more options you will find.

2. Choose a home that you can afford. It is important that you stay within a budget when shopping for a home.  Your debt to income ratio is an important factor for getting pre-approved for a FHA loan.

3. Save at least enough money for the down-payment and closing costs.  In most cases the down-payment for FHA home loans is 3.5%. Closing costs average around $3,000 and this covers title, escrow, processing, underwriting, etc.

4. Get organized and be prepared to document your last 2 years of employment.  This means that you have photo copies of your W2′s, 1040 tax returns and months’ worth of pay-stubs.

5. Have a 12-month history of rental payments ready.  You will need to documents showing the FHA lender that you made your housing payments on time.

Getting pre-approved for a FHA loan is easy if you follow these 5 steps.  We recommend getting pre-approved before shopping for a home, because when you find the house you want to buy, you better be ready.  Sellers are looking for motivated buyers who are have the lending qualifications met, otherwise they may choose another offer over yours.

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8 comments so far

I want to honestly know if you can actually be approved for a loan with a 595 credit score and 3.5% down. I am very nervous about applying because I don’t want to waste my time. Thank you!

Below is a list of the current FHA minimum scores established by Mortgagee Letter 10-29 for all standard FHA programs*:
1. Borrowers with an MCS at or above 580 ARE eligible for maximum financing.

this is my first time buying a house

I want to honestly know if you can actually be approved for a loan with a 608 credit score and ZERO down. I am very nervous about applying but right now dont have the money for a down payment?

I want to know honestly if you can get approved for a loan with a 660 credit score and ZERO money down? I am neverous about apllying and wasteing my time if there is now shot of getting approved.

FHA does not offer zero down loan programs. However certain states still allow down-payment assistance that equates to 100% financing. The USDA and VA still provide 100% home loans but their qualifying criteria is very specific so check with their guidelines to evaluate your eligibility.

can I get approved for a fha loan with 576 credit score

FHA insures home loans as long as the borrower has a minimum fico score of 500. However, the Direct Endorsed Underwriter must see compensating factors when approving government mortgages for borrowers with credit scores under 500. Typically the underwriter is looking for more equity on a refinance or an increased down-payment more than the 3.5% standards. The underwriters need to believe that the low credit score is not a true reflection of the borrowers ability to repay the loan. I hope this helps…



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