ICYMI: FHA Loan Application Requirements for 2019

/ 01:43 AM January 27, 2019

Are you looking to buy your first house? FHA loans and the application process are significant for people who are buying their first real house, but it’s not just for first-time buyers. 

Before fill out your FHA loan application, learn more about the FHA loan application, available FHA loan calculators, and FHA loan requirements in 2019 to see if you are qualified to receive an FHA loan.

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Why Get an FHA Loan?

FHA stands for Federal Housing Administration and helps Americans own their houses. It’s a lot easier to get an FHA loan for your home than other loans. Most younger people aren’t able to afford high down payment percentages, or they don’t qualify for other loans due to a low credit score. This is why people should get an FHA loan. After you are accepted and pay the down payment, then you will have a monthly fee, also known as mortgage insurance (MIP). This monthly payment will be about 0.85 percent of your annual loan amount.

If you have a history of bankruptcy or foreclosure, then you are still able to qualify for an FHA loan. This is only possible if you show FHA that you can still maintain a good credit score. As long as you are eligible for all the requirements needed to get an FHA loan approved.

FHA Loan Requirements in 2019

FHA loan application

You should learn about FHA loan requirements before applying for an FHA loan. If you don’t qualify, you can take the time to build up your credit score or wait until you are the right age before applying. Here are FHA loan requirements:

  • Must have a 500-579 Credit Score with 10% down payment
  • Must have 580 or higher Credit Score to get 3.5% down payment
  • Need to be 18 years of age
  • You maximum debt-to-income ratio should be 43%, although sometimes 50% is acceptable
  • The debt-to-income ratio also includes your student loan payments
  • Have mortgage insurance
  • Need a reliable job with evidence such as your tax returns, W2’s, and your paycheck stubs
  • At least two years of having a job
  • Co-borrowers don’t have to live with you
  • Must occupy the home as a primary residence
  • An appraisal must be done by an FHA-approved appraiser
  • An FHA-approved appraiser needs to do an appraisal on the house you choose

Those with high debts or school loans aren’t always able to get a loan approved. This is why applying for FHA loans can be beneficial for these types of people. As long as you have the specific 43% debt-to-income ratio, then you can qualify for an FHA loan.

However, you will still need to have a better bill-paying history and a steady job for the past two years. These will play into how reliable you are in paying your bills on time. FHA loans will only accept those they think will be responsible enough to pay their monthly bills on time. Therefore, make sure you have a good history at least in the last year.

FHA Loan Credit Score

FHA loan calculator

Do you have a low credit score? Do you not have enough money for a high percentage down payment? Well, no worries, because getting an FHA loan is the answer to your problems. If you have a credit score of 580 or higher, then you only have to pay 3.5% for your down payment. If you have a score of 500 – 579, then your down payment is more with 10%. However, if you have a credit score that’s less than 500, you might want to work on your credit score some more before you try to apply for this type of loan. This is because the lower your credit score is, the higher your interest rates and monthly payments will be.

Your credit requirements for an FHA loan approval also consider other parts of your past history. They will also look over the following:

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  • Your payment history
  • Bankruptcies
  • Foreclosures

Other circumstances that could affect your timely payments. Your recent history will be considered, but this doesn’t mean that a previous bankruptcy will prevent you from getting approved. It is best if you have at least 12 months of perfect on-time payments; otherwise, your past will prove to be too risky for an FHA loan approval.

FHA Loan Calculator

FHA loan calculator

You might not realize how incredible this 3.5% down payment is for those with lower incomes. If you are approved by an FHA loan, then you can buy that $150,000 house you’ve always wanted without denting your bank account too much. In this instance, your down payment would be $5,250, when other types of loans would be more than that.

This saves you money but also allows for loan approvals with people who don’t have good credit or lower incomes. This is also why so many first-time home-owners want to choose this kind of loan. You can look for houses in your income range and calculate your own down payments to see what your options are.

Other FHA Loan Fees

FHA loan application

If you are new to owning your own house, you might not know what closing costs are. When you get a loan for a house, they usually come with closing fees. This means that you will be billed for some extra expenses such as:

  • Origination fees
  • Home appraisals
  • Title insurance and more!

Getting your future home house appraised isn’t free so you will have to deal with these fees along with your regular monthly mortgage. However, when it comes to FHA closing costs, they usually come to about 2-5 percent of the price of your house. Then again, different FHA lenders can have different price options. Therefore, you should always compare the loan offers each lender will provide you. Some lenders might have lower fees than other ones.

If you are thinking about buying a house for the first time, consider applying for an FHA loan. Having a low credit score won’t prevent you from buying the dream house you’ve always wanted, because this loan is easier to get accepted. Why not try to get your loan today? You can save money with this loan with lower down payments than other loan options. You should go over different loan options to see which one is the best fit for you. Don’t let your past define where you create a beautiful new home. See if FHA loans will approve your dream home!

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