December 1, 2016
For potential borrowers thinking of filling out FHA loan applications in 2017, there are a number of areas to think about as you prepare. Some potential borrowers are ahead of the curve when it comes to getting financially ready for a major loan application, while others may overlook important areas that need attention long before the loan paperwork is filled out.
Do you know how ready you are to fill out that mortgage loan application?
One question to ask yourself before the new year arrives is how long youve been planning and preparing for the new loan. Many financial experts advise taking at least a full year to save, budget and research the new loan. Why is research needed?
In several ways, doing some research can help you decide what the best course of action for your FHA loan application might be; that can include the location and type of property you want to buy, how long you plan on staying in the home, and whether or not your future plans include putting that home back on the market before you pay off your mortgage.
Another area of research? Checking up on your own credit reports and payment history. Its strongly advised that all borrowers applying for a new home loan have a minimum of 12 months of on-time payments on their credit record leading up to the loan application. If you dont know what your credit report says about your payment history, you should find out as soon as possible.
Borrowers who dont know their own FICO scores are also at a serious disadvantage- the lender is required to check your credit history and FICO scores, and while those with scores below 640 may technically qualify for an FHA mortgage under the rules found in HUD 4000.1, lender standards also apply. Do you know what kind of credit scores your chosen lender is willing to accept and how your score is typically viewed for FHA loan applications?
You should also research average/typical home prices for properties in the market you want to purchase in and do some calculations on basic monthly mortgage payments. Remember that mortgage payments include not only the amount of the principal and interest, but also any required mortgage insurance, hazard insurance, property taxes, etc.
Knowing the answers to these questions and others related to them will make you a much more informed and prepared house hunter. FHA loan applications in the new year will be quicker and easier if you approach the process already knowing your credit scores and contents of your credit report.
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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