September 28, 2011
If you’re considering a new home purchase, many will offer advice about pre-qualifying for an FHA home loan. A lot of borrowers who pre-qualify swear by this approach. It allows you to make serious choices about specific properties within your price range as determined by the pre-qualified FHA loan amount rather than finding a home, making an offer and hoping a loan can be approved for the right amount.
But what does an FHA borrower need in order to pre-qualify for an FHA insured mortgage? For this discussion we’re not talking about credit scores or how much preparation time is needed to get your finances in order, but rather what information you specifically need to approach a lender via a website, by phone or in person.
The first detail borrowers need to provide is the purpose of the loan. For new purchase home loans, this is easy. For example, if you’re filling out the pre-qualification checklist online at FHAloan.com, you would select either FHA Purchase or FHA Refinance. Once new home buyers select “FHA Purchase” you may be asked what state your home purchase is located in, your estimation of your credit rating, and related information.
You’ll then be asked more detailed information (depending on the website) which may include questions about the zip code, the sale price of the home, whether you’re interested in a fixed or adjustable interest rate, and more.
You’ll likely be asked about your gross income, whether you’ve had a mortgage payment recently, and whether you’ve declared bankruptcy or had other judgments against you. In most cases none of this information is used at face value to determine whether or not to approve a loan amount, it’s often to give a financial institution rep a basic idea of your needs, your history, and how the bank might be able to help.
The most important part about pre-qualifying for an FHA home loan is to set aside enough time to fill out the online form properly or to give a financial institution rep the chance to ask you the right questions. It doesn’t pay to be in a hurry or be pressed for time when trying to pre-qualify.
Give yourself at least an hour just in case you need more time to answer the pre-qualification questions. Whether you fill out a form online or speak to a representative, don’t expect to get an instant answer on a loan amount–you’ll need to give the lender enough time to review your data once the questions are answered—they will get back to you with more information once the details have been processed.
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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