August 25, 2015
There are several factors that affect your FHA loan application. Some begin the journey to home ownership with methodical planning and research, others may become interested after seeing an ad or a home for sale that looks particularly tempting. If you’re brand new to the home loan process, here are some steps that can help you get ready to make the tough choices about your home and FHA loan options.
Know Your Market
Which homes in which neighborhoods have the most competitive prices? Is the housing market in your area on the rise? Is it changing due to construction or new development in areas that were under-utilized or previously blighted? What would your new neighborhood offer you in terms of services such as shopping, day care, etc.?
Know Your Lenders
Which financial institutions offer the lowest rates? The best terms? Are you looking to co-borrow with a spouse or domestic partner? What are your state’s community property laws, if any? If you live in a community property state, you’ll need to know how those laws might affect your FHA loan transaction.
Know Your Credit
Do you know your current FICO score? What does your credit report say about your last 12 months of financial history? Examine your credit reports early in the FHA loan planning stages so you have plenty of time to correct erroneous or outdated information where necessary. Also, if you find evidence of identity theft, you’ll need extra time to file complaints, police reports, and any other paperwork needed to clear up the issue.
Know Your Finances
Your loan officer is required to take a look at your income, your debts, and your spending habits to determine whether you are a good credit risk. Make sure you come to the FHA loan application process with 12 months of on-time payments on your credit history for the best possible results. You’ll need 12 months of solid payment history to be considered a good risk, and it may be better to give yourself an extra month or two where needed to do that–a missed payment isn’t always a deal-breaker, but you’ll want the best possible financial record you can bring from the last year.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It’s designed especially for real estate websites–a widget that displays FHA loan limits for the counties serviced by those websites.
It is easy to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today: http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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