FHA loan requirements in-depth analysis and documentation
To minimize the risk of a lender, the FHA provides the lender with an insurance policy in case of default. FHA loans may have a higher default rate due to the FHA loan requirements of 3.5 percent and the FHA’s flexible eligibility criteria. Government-backed loans allow for lower credit ratings and higher debt loads than most conventional loans.
Before issuing the FHA mortgage guarantee, lenders analyze your application and supporting documents as carefully as they would a conventional loan. The FHA origination process lasts between two weeks and six weeks, depending on the complexity of the loan file and the timeliness and accuracy of the information you provide to the lender.
Check Ready Status Online
Many large loan companies that come in FHA loans allow you to track the progress of your online application. These lenders include:
- Bank of America
- Wells Fargo
Upon submission of your application with a lender, the lender provides an application identification number and password to access the portal. Applicants with existing accounts and a username and password can access their general customer profile and view the status of a pending FHA loan application, depending on the lender.
Main points of contact
An FHA mortgage lender assigns a loan officer to take your initial loan application. This loan officer acts as a liaison between the lender and the client throughout the entire transaction. The loan officer usually follows with you when more information is needed, such as current pay stubs, employer information, or to clarify discrepancies between your application and you’re supporting documents. You can also ask a loan officer to call or email you updated, for example, on a weekly basis. Similarly, you can provide your loan officer with any new information that could change your eligibility for a loan, for better or for worse. For example,
Lenders employ loan officers to answer more complex issues requiring interest rates, loan programs and financial concerns. However, loan officers sometimes spend logistical issues, such as inquiries about the FHA app status, to an assistant, known as a loan processor. A loan processor collects and saves all vouchers in the system and helps the loan officer obtain the file by underwriting the financing more efficiently. According to the mortgage company, loan processors may be allowed to communicate directly with the public to provide status updates.
Check lender’s Track Record
Find out how FHA lenders intend to keep you informed throughout the application and underwriting process before agreeing to give a lender your business. Ask for a main point of contact, or two, and get their opening hours, direct phone number, fax number and e-mail address. Also ask a loan officer for references from past clients. Ask your last clients about their experience with the loan officer and how they were kept in-the-know about the status of their FHA loan.
Checking Rental History for an FHA Loan
The federal housing administration affords mortgage ensures to eligible borrowers to make mortgages more inexpensive. In case you need the FHA to insure your loan, you should provide documentation of your eligibility. Part of this documentation consists of checking your home for the remaining 365 days.
The FHA does not issue high risk loans. He is insurance of loans with taxpayer money, so he will be very careful in approving your application. To be eligible, you will have to have acceptable credit, a stable income, and no problem of the latter debt, and to pay some applicable upfront costs. To satisfy these FHA loan requirements, you prove that you are solvent and unlikely to default on your loan.
FHA is not content with your word on your application. You must provide additional documents proving your request are accurate; Part of this required documentation is the name, address and contact information of your owner in the last 12 months.
The FHA can contact your landlord to see if you have made your lease payments on time in the last year. This is an indicator of your ability to pay off your mortgage in the future. In addition, if you were able to make lease payments equal to or greater than your advance mortgage payments, the FHA has proof you can afford the loan.
What should you do if you do not have an owner in the last 12 months? For example, if you lived in the home of a parent or relative? In this case, you will still have to provide that person’s name, address and contact information as a reference, but that person will be a character reference rather than a financial reference. If you do not have an owner because you owned your old residence, you will need to show the property by providing a copy of the deed, your property tax bill, home insurance, and mortgage payment. Coupon. This will only ask you if you are refinancing or owning a rental property, as the FHA does not allow loans on second homes.