5 Must-Know Facts about FHA Loan Requirements in Texas
FHA loans are a home loan option with a low down payment and flexible credit requirements. These loans are insured by the Federal Housing Administration, an agency of the U.S. Department of Housing and Urban Development (HUD), and offered by the FHA-approved lenders. They can be used to purchase single and multi-unit homes, approved townhomes and condos, and even mobile and manufactured homes.
To get an approval for this loan, you have to fulfill FHA loan requirements Texas. Here are the ones –
- You need to have verifiable income
A steady income is one of the primary requirements for this home loan program. You should have an income that you can verify with pay-stubs o tax returns. Generally, lenders want to see that you have worked for a year or two in the same field even if not with the same employer. Under this program, a lender may accept a shorter work history.
- You should be able to afford the housing payment and the existing debt
The principal factor to qualify for an FHA loan is whether you can afford the payment or not. If you follow the general guideline, your mortgage payment should not be more than 35 percent of your income and your mortgage payment along with other monthly debt payments should not be more than 48 percent of your income. You can use an online FHA home loan calculator to see approximately how much house you can qualify for. If you can’t meet ratios, focus on paying off as much other debt as you can before buying a home.
- You need to save a minimum down payment
The minimum required down payment for an FHA loan is a 3.5%. If you have a good credit score, you can get the approval with a 3.5% down payment. But if your credit is lower than the average, you will need to save a better down payment of the home’s purchase price to account for closing costs that include an upfront mortgage insurance premium equal to 1.75% of the home’s value. You can reduce this premium to 1.25 percent by undergoing an FHA-approved credit counselling program prior to closing.
- You will buy a home that does not exceed FHA loan limits
There are federally-set limits to how much you can borrow with an FHA loan, which can vary by state and country. Fortunately, the limits are high, and so, most borrowers should not need an FHA loan to buy a more expensive home.
- You must apply for the right type of FHA loan
Lenders offer different types of FHA mortgage loans. Along with the 30-year fixed interest, you can also get a fixed interest rate on an FHA loan for 10, 15, 20 or 25 years or you can get an adjustable-rate FHA loan. An adjustable-rate loan allows for the fluctuation on interest rates at certain periods of time. FHA adjustable loans generally come in the form of a 3/1, 5/1, 7/1 or 10/1with 30-year terms. These are not as popular as fixed interest FHA loans since they offer more risk to the average homebuyer.
These are the common requirements that you have to meet to get the loan approval. To know more about the requirements, get in touch with the FHA-approved lenders and work accordingly.