Before committing to a loan, you need to ask a set of questions to the lender. Purchasing a home is one of the crucial financial investments without a doubt. For this reason, you can opt for an FHA loan which comes bearing many gifts. As it is very much difficult to figure out why the loan is ideal for your situation, you can take the help of a lender. An FHA lender carries the necessary information for untangling everyone’s confusion.
There are many questions swimming in your mind and most of the questions are common. Now, the best FHA lenders in Houston are ready to divulge the questions they face on a regular basis. Once you are aware of the loan benefits, you can proceed with the house selection. The more you know about the loan from the lender, the better you can plan for the next move. Usually, the first thing your lender will let you know that the Federal Housing Administration backs the mortgage. There are things shared by the FHA lenders, take a look below.
How to qualify for the FHA loan?
An FHA lender instructs that a good credit score works always. However, the credit score guidelines are not as rigid as conventional loans. For example, a person can be qualified for the loan even with a 500 or 580 FICO score. The down payment is a minimum 3.5%. Additionally, the borrower must have a steady income and practical level of debt for repaying back the loan.
Is there a way of being turned down?
A borrower can be denied financing for different reasons. It is wise to discuss with the lender and avoid the issues beforehand. It may take two months or weeks to get financing because there are various factors. Nevertheless, the lender checks credit reports when you are applying for the loan. Again, they often check the FICO score right before closing. In the meantime, you must maintain the score. Additionally, the lender can pay for the closing costs only up to 6%.
What is there to know about the home appraisal?
There is no need for inspection if an FHA loan is used. Additionally, there must be an appraisal for determining the market value. However, the house might be rejected for this specific loan based on certain reasons. It is important to meet HUD’s requirements and low appraisals become a problem. The chance of a house being appraised for lower than buying price is not unbelievable.
Is mortgage insurance is actually important?
According to the rules of the Department of Housing and Urban Development, the borrowers are required to pay mortgage insurance premiums. It is done for funding the program and maintaining the cash reserve. The insurance premium might be following you for the rest of your life.
There are other questions that are going on in the mind. How can you get a low rate? Or, how is it the rate determined even? What the questions may be, you need to ask for help from the professional lender right away.
Author Bio: Joan Gallardo, a Senior Loan Officer, with 20+ years of experience, here writes on 2 questions to ask the best mortgage lender in Houston when you are about to choose one of the first time home buyer programs in Houston.