How to Apply for an FHA Loan
Learning what an FHA loan is and exploring the basic requirements for this type of financing can help decide if this is the right loan product for your needs. Then, familiarizing yourself with how to apply for an FHA loan will help you move forward with confidence.
What Is an FHA Loan?
As Money.com explains, an FHA loan is a type of federally insured home loan. While they are issued by private lenders, they are insured by the Federal Housing Administration, which is part of the Department of Housing and Urban Development. This federal backing means that FHA loans come with more favorable terms, which are ideal for first-time and low- and moderate-income buyers. These benefits include requirements that make it easier to qualify when compared to many other loan options.
What Is Required to Qualify for an FHA Loan?
With an FHA loan, there are certain requirements that both the borrower and the property must meet. Experian offers a brief overview:
- Income: You must have a verifiable source of steady income that is sufficient to pay your home loan.
- Property type: The property must be a new or existing family home that will be used as your primary residence. It can be a home with one to four units. Some condos and manufactured housing units on permanent foundations may also pass the test.
- Appraisal: Any property purchased with an FHA loan must pass an FHA appraisal. This ensures the value and safety of the property.
- Mortgage limits: FHA loans are capped. The amount varies by county. Areas where housing is more expensive have higher mortgage limits.
- Mortgage insurance: If you’re approved, you must pay a mortgage insurance premium.
How Do You Apply for an FHA Loan?
Is an FHA loan the right fit for your needs? The Mortgage Reports explains how to apply:
- Find a lender. FHA loans are widely available. Banks, mortgage brokers, credit unions, and online lenders all offer these popular products.
- Apply. Filling out an application will result in loan estimates, allowing you to compare offers.
- Compare loan estimates. Review the loan estimates that you receive to select the offer that you want to move forward with. Then, contact the lender. Provide all the necessary documents so that the formal underwriting can begin.
- Await underwriting. The underwriter examines the application and supporting documentation closely. They verify that you meet FHA guidelines for funding and that you have the financial resources to repay the loan. The lender will also schedule an FHA appraisal of the property to verify its value.
- Communicate. To help the process go smoothly, be ready to respond to any questions or requests for information or documentation from your lender.
Whether you’re interested in FHA loans or still searching for the right home loan product, the team at PrimeLending Dallas is ready to assist you in reaching your housing goals. Contact us today to discover more about our services.