How do I Qualify for an FHA Mortgage in California?
The Federal Housing Administration (FHA) is an agency within the United States Department of Housing and Urban Development (HUD). FHA provides insurance that borrowers gain from lending institutions. FHA-backed loans are generally simpler to obtain and have lower down payment requirements. Because FHA is a federal agency, qualifying for an FHA loan in California is exactly the same as in all other states. What may differ are the loan limitations, which vary by state and region. Your creditor will have the ability to let you know the limits for your area of California.
Show the creditor you have had steady employment with the same employer for the previous two years and your income has either stayed the same or increased.
Check your own credit report. Look especially at the accounts which show late payments. If you’ve got more than two accounts which show 30-day late payments you’ll have to focus on cleaning up your credit before applying for an FHA loan. An FHA-approved housing counseling agency can assist you with this. The program is either free or very low price.
Wait at least two years after the release of a bankruptcy to apply for an FHA-backed loan. Keep your credit clean during this time. If you have experienced a foreclosure, you’ll have to wait three years and have perfect credit since the foreclosure.
Pick a home you can spend. FHA wants to realize your new house payment will not be a greater than 30% of your gross (before tax) income. If you’re not certain of how much home you can afford, use the calculator at the Government National Mortgage Association’s (Ginnie Mae) website.
Accumulate at least 3.5% of the purchase price of the home to be utilised as the down payment.