Purchase and Refinance home loans in Rancho Cucamonga for FHA lending, FHA home loans perfect for home buyers with low credit scores or limited funds to close escrow.
Federal Housing Adminstration (FHA) was created to assist homebuyers with affordability to the housing market by making home loans accessible to those with lower credit scores and limited funds for the down payment and closing cost.
FHA lending has 3 parts with the underwriting guidelines, down payment and closing cost, income and credit. Let’s address each of these areas.
When buying a house you will need funds for the down payment and closing cost. These funds can come in a way as a gift from a family member, checking, savings, retirement accounts, 401K plan, sell something of value with the proper paperwork to document the funds with a paper trail, down payment assistance home loan program, request the seller to pay for some of the closing cost (you will need to discuss how to make an offer with your real estate) and many other avenues to find money to close escrow.
You will need to have documented income with W2 or 1099 income, can not use income that is not claimed on your federal tax returns. The income you claim will be used to qualify for the mortgage payment and monthly debt obligation that will appear on your mortgage related credit report, paystub or court ordered. FHA allows for a higher debt to income ratio than Conventional lending, we will need to run your loan scenario through the DU FHA Score Card automative underwriting system to determined how high the debt to income ratio can go, an FHA underwriter will also need to review income documentation to determine eligibility.
Running a mortgage related credit report is a requirement to determine loan approval. There are two parts when running he credit report, the first part is the credit score. Each lender will set their lowest credit they will lend on a FHA program, even tough FHA will insure a loan with a 500 credit score, not all lenders will go down to the 500. The second part is what is in the body of the credit report, you may have a lendable credit score but what appears in the body of the report can hamper your ability to obtain a home loan. Items in the body such as judgements, collections, disputes, short sale, foreclosure, tax liens and late pays.
FHA also offers a refinance home loan program known as the FHA Streamline refinance home loan program. Should the interest rates drop you can refinance into a lower monthly mortgage payment without running your credit, appraisal not required and no income documentation to supply. This program make the process of the refinance easy and smooth because of the limited paperwork one needs to supply, do check with each lender, because some mortgage lender may require running a credit report in their name to determine credit scores.
Before looking to buy a house in Rancho Cucamonga, get your financing in order before starting your property search. By starting with the loan, you will know what your budget will allow you to purchase and if there is anything from holding you back from making an offer on a home such as the cost, income or credit. You are able to address this issue ahead of time and place you in a better position to make a strong offer on a property with your real estate agent.
I welcome the opportunity to speak or meet with you to discuss your plans and goals of buying a house in Rancho Cucamonga. Working with a seasoned mortgage professional like myself will prepare you every step of the way during your home search. Please call or text me direct at 909-503-5600 or email me HERE to get the process started.
Purchase and Refinance home loans in Rancho Cucamonga for FHA lending, FHA home loans perfect for homebuyers with low credit scores or limited funds to close escrow.