Buying your own house is a dream of many people, whether you are single or starting a small family. Renting an apartment or a home can be a practical option for many people for whatever personal reasons they have. Nevertheless, there are many ways you can avail of a house.
On the one hand, you can pay for it in full cash. On the other hand, you can avail of a loan to buy your dream house. There are many types of loans that can be suitable for your financial status. In Corpus Christi, lending companies offer FHA loans and other types of loans that are suitable for every home buyer’s financing needs.
What are FHA loans?
Short for Federal Housing Administration loan, this type of mortgage loan is issued by the said government agency to those who have limited financial means to avail of a house. FHA loans have different requirements needed as compared to the usual loans. For example, down payments in FHA loans can be at least 3.5 percent, unlike with other standard mortgage loans that need around 30 percent down payment.
You can avail of an FHA loan with at least 580 credit score or even as low as 500 as long as you can provide a down payment of at least 10 percent. Given the more straightforward requirements, FHA loans are popular, especially for first-time homebuyers and those who have limited finances but want to avail of their own homes.
Qualifications for an FHA loan
While it usually caters to first-time and low-income home buyers, everyone can avail of an FHA loan. Of course, you have to meet specific requires to avail of one. Here are some of the requirements that you need to meet so that you can qualify for this type of loan.
1. A steady source of income
Lenders will usually check if you have a consistent source of income for at least a year. You might have to present tax returns or pay stubs as proof.
2. Ability to pay off debts and to afford housing payments
There are two major guidelines you need to comply with. First, your housing loans and other mortgages should not be more than 48 percent of your total monthly income. Likewise, your housing loans should not exceed 35 percent of your total gross income. You should pay off as many debts as you can before buying a house.
3. Considering your credit score
A credit score of about 580 can qualify you for an FHA loan. However, the minimum credit score can still depend on the lender. Some might require credit scores higher than 600, while others allow lending with credit scores lower than 580. Make sure to ask your lender first regarding this.
Getting a housing loan can be more comfortable as long as you are aware of the requirements you will need. Even if you are considered well-off, you can still avail of an FHA loan. But like any other type of loan, you need to meet the requirements needed.