When you purchase a house, you put yourself in a long-term commitment. Aside from your commitment to residency, mortgage payments usually take a decade and five years up to three decades in total! Considering that so much goes into loans and mortgages, let this article guide you in choosing the top FHA mortgage lender.
Here are tips on finding the best FHA mortgage lender
Work towards obtaining a decent credit score
Not everyone is eligible to purchase a house. Certain income and credit criteria have to be met. Conversely, these are established by mortgage companies to assure that you can repay them.
Logically, a low credit score may send warning signals to banks and lending companies. Consequently, this may also mean higher interest rates on one’s mortgage, as those with low credit scores may translate to being high-risk borrowers. The more your dues are paid on time and the better your credit score is, the more authority and leverage you’ll have in finding your way to a favorable negotiation with promising lenders.
Generally, it’s harder for borrowers to snag any type of FHA mortgage if their score falls under 580. Still, it’s not entirely ruled out. Many lenders even accommodate borrowers whose credit scores are as low as 500.
To establish your credit score, exert effort in making sure your credit reports are free of errors. Don’t forget to obtain them from all three esteemed credit bureaus: Experian, Equifax, and TransUnion. It is imperative for each of them to hand you a free copy of your credit report once a year.
Secondly, pay off existing debts if possible, and start with the high-interest ones. Know that lowering your debt improves your debt-to-income ratio. By paying off recurring debts and other similar fees, you also free up more funding to put into the closing cost and the down payment.
Get an FHA pre-approval
Other people don’t see this as necessary, but the truth is: getting a mortgage pre-approval before finding your dream home is not just essential, but also economical. This will give you a clear picture of where and how you stand against other bidders who may be interested in getting the property you’d like to buy. By getting pre-approved, you can show a seller that a lending company has examined your financial standing and has foreseen how much you can afford to take on with loans and what types of homes fall under your radar.
Always, always, always, read the fine print and ask smart questions.
Selecting the perfect FHA lender to collaborate with can be a tricky one. Narrow your selections by getting referrals from family and friends and real estate agents. It also helps if you read reviews online. Once you feel like you have a strong lead, ask these FHA mortgage lenders how efficiently they can respond to messages? How long will it take them for preapprovals, appraisals, and closings? What do they require in down payments?