An FHA loan is a specially designed mortgage program for first-time homebuyers or the ones who have not owned a home in the last three years. As it is insured by the Federal Housing Administration, the lenders offer the loan with easier credit requirements, below-average interest rates, and low down payments.
The lenient requirements of this loan make it popular among homebuyers. But what the FHA loan requirements Texas are? Here, we have discussed it –
- You have a verifiable income
One of the primary requirements that you have to fulfill to get an FHA loan is a steady income that you can verify with pay-stubs or tax returns. Generally, FHA-approved lenders want to see that you have worked for a year or two in the same field, it would be better if under the same employer. If you don’t have 2 years of consistent work history, you don’t need to worry. Some FHA lenders accept a shorter work history.
- You can afford the housing payment and the existing debt
The biggest factor in qualifying for an FHA home loan is whether you can afford the payment. According to the guidelines, your mortgage payment must not 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 home affordability calculator to see approximately how much house you can afford. If you fail to meet these ratios yet, focus on paying off as many other debts as you can before buying a home.
- Save at least 3.5 percent for the down
The minimum down payment requirement for an FHA loan is 3.5 percent. But you can get approval for an FHA loan with a 3.5% down payment only when you have a good credit score. Otherwise, you need a down payment that is more than 3.5%. To be on the safe side, it is better to come with a down payment of 6 percent. The higher the down payment amount, the better it would be for you. Besides, you can qualify for the best mortgage rate with a good down payment. So, try to save as much as possible. And if required opt for a down payment assistance program.
- Have a good FICO score
The minimum FICO score required for an FHA loan is 500. But the FHA is not the lender, it only guarantees the loan. It is the FHA-approved lenders who determine the credit score requirement and it varies from lenders to lenders. With a low credit score, it might be difficult for you to get the loan approval. So, you should check your FICO credit score and if it is low, then you should take steps to improve it before applying for the loan.
Don’t finalize the very first FHA lender that you come in contact with. Rather ask for quotes from different lenders, compare it, and then decide who to opt for.
