Whether you are a first time home buyer or a seasoned home buyer, it is important to be aware of the requirements, policies and procedures that could potentially assist you with your home buying needs. As frequently evidenced, the housing rules keep changing. The government keeps proposing new funding programs and the stipulations that need to be met by buyers are ever changing. Staying abreast on these details will help ensure you have a smooth and valuable home buying experience.
A major funding agency that home buyers should take advantage of is the Federal Housing Administration, also known as the FHA. FHA provides mortgage insurance on housing loans that are funded by FHA approved lenders. The FHA will insure loans on single and multifamily homes located within the U.S. and its territories. The Federal Housing Administration is known worldwide for being the largest insurer for residential loans.
As a home buyer, what do you need to know about the FHA? It is important to first understand that FHA has strict requirements in place to see if you even qualify for an FHA loan. But even before you start to jump into the home buying experience, it is important that you are prepared for this process. The FHA will require some basic information from you to see if you can qualify for an FHA loan program. The basic qualification that they will require is as follows:
• Social Security Number;
• Place of residence for the last two years;
• Employer name, address and phone number;
• Recent 30-day pay check stubs;
• Last 2 months bank statements;
• Currently owned real estate information;
• Last 2 years W2 forms and personal tax returns
The FHA loan requirements are basic, however ensuring that you meet the requirement is essential for you to move forward with your FHA loan. Mortgage insurance is required for all FHA loans. Currently, the up-front mortgage insurance premium is set at 1.75% of the loan amount. The monthly mortgage insurance premium (MIP) is calculated based on the down payment on the loan. Also, the MIP does not cancel and is part of the mortgage payment for the entire life of the loan.
FHA requires lending limits to help ensure that FHA loans are truly given to those who qualify for them. Loan limits are intended to help home buyers with a moderate to low income level, who cannot make a large down payment on their own financial accord. FHA loan limits are based on your geographical location. For example, if you reside in Austin, Texas, you have a single family limit of up to $295,550. As with all the FHA loan limits, you can find out what the FHA limit is for...