Aspiring homeowners have all the more reasons to turn their dreams into reality with the Federal Housing Administration. Under this loan program, FHA-approved lending companies can accommodate borrowers and usher them into purchasing their property. Because the federal government guarantees these loans, lending agencies can present lower interest costs with the FHA compared to the conventional loans.
All that aside, the FHA calls for a specific set of requirements that loanees will need to comply to breeze through the loan application process.
Processing the loan
To begin processing an FHA loan, affiliated lenders must first secure and authenticate a borrower’s employment and income for the most recent two years. They proceed to check one’s credit reports from the leading credit-verifying bureaus and evaluate account balances. These mortgage professionals are also obliged to request an appraisal on the home at hand and request for a title report.
Loan underwriting and submission
When the FHA home loan processing is finished, a mortgage loan application under the FHA is then delivered to a reviewer who determines the papers and comes up with a writing decision. If the application meets every guideline, loans are automatically approved. Likewise, these applications are denied immediately if they do not meet standards and workarounds are unavailable.
Once applications are accepted, the FHA initiates an appraisal on the house you deem for yourself and inspects it. The goal of conducting an appraisal is to determine that the home you wish to purchase also meets every single safety requirement the law reinforces. This is also to make sure your safety isn’t compromised.
It is normal for any type of delay to occur anywhere within the process. This may be due to plenty of reasons: new borrower information may surface, a re-appraisal may be deemed necessary, or the property may call for repairs. Sometimes, sellers also intentionally also fail to disclose controversial issues about the property. Expect a few weeks of delays if not one month in all. In some cases, extended delays can lead to denial in the end.
A misconception first-timers have about the FHA is that the funding comes directly from the federal government. To clarify, the money comes from a commercial lending company that’s approved by the FHA—but never from the FHA themselves, as they once guarantee these loans should any borrower flake at any given time. This is to safeguard lenders to lessen the risk they’re exposed to. After all, FHA’s borrowers range from middle class or less.
If you’re still on the fence whether or not you should opt for buying a house, consider the many advantages of having a property attached to your name.
Benefits of homeownership
Homeowners are in control of who they let in and welcome into their homes, as they do not have to submit themselves to a landlord.
Homes can become assets as their value generally increases as time goes by.
The property tax portion and interest of a homeowner’s mortgage payment are deducted in their taxes.
If you want to know how to apply for FHA loan, click the link.