December 30, 2022
Are you ready to buy a home with an FHA mortgage? There are ways to tell how close you are to being ready to start house hunting and move out of the planning stages of your new home loan.
Do You Know Your FHA Loan Limit?
FHA loan limits are higher in 2023, you will want to know how much higher the limit may be in your housing market compared to last year.
FHA home loan limits vary depending on the housing market; some areas are more expensive than others and have a higher loan limit, while others are “average” and conform to the median FHA loan limit nationwide.
Some housing markets may be less expensive than others and feature a lower FHA loan limit, but the only way to tell is to either ask a lender what FHA mortgage loan limits are like or look the limits up for your area.
Remember that FHA loan limits are not necessarily the limit of what you can borrow with a participating lender, but they are the limit of what the FHA will guarantee for the mortgage.
If you need a larger loan, discuss that option with your FHA lender, and be sure to ask about FHA Jumbo Loans.
Do You Know Your Credit Score?
If you don’t know your FICO scores, you aren’t ready to apply for an FHA mortgage. The reason is simple; if you don’t know what your credit report says, you take a big risk of having your loan denied.
That is especially relevant if there is outdated, inaccurate, or otherwise contestable information on your credit report.
Don’t assume anything about credit scores or reports-always check to see what is reported in your file. You may discover signs of identity theft, you could have someone else’s credit reporting data misfiled into yours.
Or, you may have information that isn’t quite correct that needs to be fixed before a lender sees the report.
Do You Know Your Ability To Borrow?
Getting pre-qualified for an FHA mortgage is a very good way to learn how much you can afford to borrow or how much the lender is willing to lend you based on some basic financial information. Consider getting pre-qualified for an FHA mortgage and get a head start on the lender process.
Do You Know How Much Homes Are Selling For In Your Chosen Housing Market?
Getting pre-qualified for an FHA mortgage as suggested above is an excellent start, but if you don’t know how much homes are selling for in your housing market now, you could be at a serious disadvantage.
Know how your chosen housing market is reacting (price-wise) to current economic conditions, predicted trends for the near-term future, and whether you are house hunting in a buyer’s market or a seller’s market. Doing some basic homework in this area can save you time and money.
Some areas to pay special attention to–lender fees, interest rates, and any local perks for new borrowers.
Talk to a participating lender about your FHA home loan options when you’ve got the answers to these questions and learn more about your future home loan.
Bruce Reichstein has spent over three decades as an experienced FHA and VA home loan mortgage banker and underwriter where he was responsible for funding “Billions” in government backed mortgage loans. He is the Managing Editor for FHANewsblog.com where he educates homeowners on the specific guidelines for obtaining FHA guaranteed home loans.
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