Lilly Garcia Realtors
8308 Precinct Line Rd
Colleyville, TX 76034
ph: 8552000723
lilliann
If after analyzing your situation to determine if it's a better alternative for you to purchase a new home instead of continuing to rent, your the next step will be to get prequalified for a loan. Traditionally, you will complete a mortgage application and a loan officer will obtain your authorization to pull your merged credit report which includes scores from the three credit bureaus. Before you get to that step it's good to familiarize yourself with the different types of loan available to determine which one works best for you. The Two most common loans available are FHA and Conventional:
By definition, a conventional loan is any mortgage that is not guaranteed or insured by the federal government. Conventional loans may be either "conforming" and "non-conforming". Conforming loans follow the terms and conditions set by Fannie Mae and Freddie Mac. Nonconforming loans don't meet Fannie Mae or Freddie Mac guidelines. Conventional Mortgages offer low closing costs and flexible payment options.
To be eligible your monthly housing costs (mortgage principal and interest, property taxes and insurance) must
meet a specified percentage of your gross monthly income (28% ratio). Your credit background will be fairly considered. At least a 620 FICO credit score is generally required to obtain an Conventional approval. You must also have enough income to pay your housing costs plus all additional monthly debt (36% ratio). These percentages may be exceeded with compensating factors.
Conventional Loans require the home buyer to invest at least 5% - 20% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $5,000 - $20,000.
The interest rate for your home loan will be determined by the type of loan program that you qualify for and your credit score. Conventional Loans can be used to finance primary residences, second homes and investment property.
Criteria for Conventional loan approvals state that if you have been discharged from a Chapter 7 bankruptcy for four years or more, you are eligible to apply. If you have had a Chapter 13 bankruptcy, it must be documented that the your credit reputation has been re-established for at least two years to be eligible for a Conventional Loan.
The maximum loan amount allowed for an Conventional. To see what the limit is in the county in which you're interested, visit the following site https://www.efanniemae.com/sf/refmaterials/loanlimits/. This site lists U.S. territories as well as states. The maximum Conventional Mortgage amount will be 80% - 95% of the appraised value of the home or its selling price, whichever is lower.
Most Conventional Mortgages are fixed-rate mortgages. In a fixed rate mortgage, your interest rate stays the same for the entire loan period. With a fixed rate Conventional Mortgage, you always know exactly how much your monthly payment will be.
FHA mortgage loans contain many additional benefits and protections that can't be obtained through other home loan programs. FHA Mortgages aren't completely driven by a borrowers credit score, though they will usually need at least a 620 middle FICO score to get approved through most lenders. While FHA mortgage guidelines are more flexible than other home loan programs, there are still basic requirements that must be met.
FHA Mortgage interest rates are usually better than other comparable loan programs and they carry low mortgage insurance costs to the borrower.
FHA Mortgages have a low 3.5% down payment requirement and it is possible for the money to be gifted from a family member, employer or charitable organization.?
To be eligible FHA Mortgage approval, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must be less than a specified percentage of your gross monthly income (31% ratio). You must also have enough income to pay your housing costs plus all of your additional monthly debt (43% ratio). These ratios can be exceeded somewhat with compensating factors like a high credit score.Your credit background will be looked at carefully. Generally speaking, a 620 middle FICO credit score or higher is required for approval.
The maximum loan amount allowed for an FHA Mortgage varies from county to county.You can see what the exact limit is in the county in which you're interested here: https://entp.hud.gov/idapp/html/hicostlook.cfm. This site includes FHA loan limits for all 50 states..
Depending on the state where the property is located, the maximum FHA Mortgage amount will be 97.75% of the appraised value of the home for a refinance loan or 96.5% of the lower of its selling price or the appraised value for a purchase.
FHA Mortgage Loans require the home buyer to invest at least 3.5% of the sales price in cash for the down payment and closing costs. For example, if a home has a sales price of $100,000, the borrower must invest at least $3,500 toward a down payment. It is possible for the buyer to utilize gifted money from family members towards the down payment..
If you have been discharged from a Chapter 7 bankruptcy for two years or more, you are eligible to apply for an FHA mortgage. If you are currently in a Chapter 13 bankruptcy that has not been discharged and you've made all of your court approved payments on time for at least a year, you may be able to get an approval.
FHA loan requirements are written to very straightforward and simple to follow. Your monthly income and your current monthly expenses.
To determine if the home meets FHA requirements for loan approval, an appraisal must be performed by a certified FHA appraiser. Only the lending institution may initiate the order for an appraisal to determine that the subject property meets FHA loan inspection requirements.
Currently, FHA loans requirements state that your monthly housing costs (mortgage principal and interest, property taxes and insurance) must meet a specified percentage of your gross monthly income (31% ratio). You must also have enough income to pay your housing costs plus all additional monthly debt (43% ratio). These percentages may be exceeded with compensating factors.
Your credit background will be fairly considered. While the official FHA loan requirements for credit score states that the minimum FICO score for FHA loans is 580 for LTV ratios over 90 percent and 500 for LTV ratios below 90 percent, most lenders today will not approve mortgage loans to borrowers with credit scores below 620. It is possible for a borrower to be approved for an FHA Loan after bankruptcy, provided that the bankruptcy is at least two years out of discharge if Chapter 7 or one year out of discharge if Chapter 13 and all court ordered payments have been made on time.
For the subject property to be eligible for a FHA approval, it must first be appraised by a certified FHA appraiser. FHA loan property requirements for appraisals state that the home must be in fairly good condition. Things that could disqualify the subject property include a leaky roof, structural problems and/or damage, missing siding or paint and other issues. The appraiser must determine if the appraised value of the home meets or exceeds the maximum Loan-to-Value requirements for FHA mortgage loans. If the appraised value comes in below those requirements, the borrower could have to bring more money to the closing table.
Additionally, to meet current FHA loan eligibility requirements you must:
Even if you are not a U.S. citizen, you must have a valid Social Security Number (SSN). A Tax ID number (ITIN) does not qualify as an acceptable substitute for a SSN.
USDA Loans are specialty loans that require no down payment or closing costs! For Information on USDA Loans go here
Check out the basic Documentation You Will Need to apply for your mortgage loan and get preapproved!!
Lillianne is an excellent support in real estate. She guides you on every step. Among her qualities is integrity --she walks the talk-- but in an extremely efficient and speedious way.
Her knowledge allowed me to win a bid in a house at a very reasonable price. I highly recommend Lilliane as your real estate agent. - Veronica Escamilla
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Lilly Garcia Realtors
8308 Precinct Line Rd
Colleyville, TX 76034
ph: 8552000723
lilliann