Are you currently trying to apply for a loan at a bank for a home? Getting a home mortgage can be a very difficult task. So better ask or do some research on how to get an FHA loan in Texas before considering it.
If you are a first-time home buyer in Texas, you will likely not have a good enough credit score. You may have a debt to income ratio that simply prevents you from qualifying. There is also the problem of mortgage insurance that you will have to pay for, and also the high cost of interest rates. Some people can pay as much as 8% for the cost of a mortgage.
That does not take into account the number of points that they will have to pay to initiate the loan process. That’s why many people looked to FHA loans to obtain the lowest rates possible. There are some limits on your income that may affect whether or not you can qualify for these loans.
Why FHA Loans Are So Popular
Federal Housing Administration loans are one of the top sources for home loans in the United States. Many approved lenders work through the FHA program. This is specifically for people that are in America and its related territories. If you can qualify, you will enjoy very low percentage rates on both 15 and 30-year loans.
As always, it is a good idea to apply for a 15-year loan so that you can save money on the total amount of interest that you will pay. Finally, people can get these loans much more easily because of the minimal amount of money needed for a down payment. That being said, there are some problems that you may run into as you are trying to qualify for one of these loans.
Common Problems You May Encounter Getting FHA Loans
The first problem that people typically encounter is having a debt to income ratio that is too high. If you have exceeded 40%, likely, you will not qualify. Another problem is the amount of down payment money that you will need to get the loan. This is typically 3.5% of the total amount of the loan itself.
For example, if you are getting a home loan for $200,000, you must have a way of coming up with $7000 before you can even apply. There is also some difficulty with those that do not have good credit. If it is 580 or below, that may also prevent you from qualifying through this program. Finally, you may have too much income, which can be problematic when going through an FHA loan process.
What Is The Maximum Income You Can Make For FHA Loans?
Regarding maximums, there are no limits regarding how much money you can earn. However, you do have to make enough money to make the payments. It’s all about affordability, as it is with any bank that is going to lend you money. Whether you make $1 million a year, or a hundred thousand dollars a year, you still must be able to pay the monthly payment on your mortgage.
What If Your Credit Scores Too Low?
You may be asking what is the credit score needed for an FHA loan. What if you have a low credit score, how you can still qualify for the loan? The answer is you can still improve your credit score before applying for your loan. Many businesses can help you with getting that up above 580.
For example, you may only be a few points below that threshold, and business will be able to contact debtors and help you settle debts with them. Once this is off your credit score, this will then allow you to apply for and obtain an FHA loan.
What About The Limits To How Much You Can Borrow?
At the time of this writing, the mortgage limits on FHA loans are about $417,000. This will allow you to get a relatively nice home, regardless of where you are in the country. If you need to borrow more than that, you would have to go through a traditional bank. If you do need that much, to begin with, you likely make enough money, and have good enough credit, to work with a regular bank.
How To Proceed When Obtaining An FHA Loan
The first thing that you will want to do is meet with an individual that can start the process for you. Ask them what are the requirements to apply for an FHA loan. Do not be shy of asking for their advice especially when you encounter problems. These are loan officers that have likely done this many times before.
When they sit down with you, they will discuss several things. They will first verify that you are employed, verify your credit score, and then ask you what type of home you would like to obtain. They will talk about the minimum credit score that you must-have, the down payment you are responsible for, and other things including the housing ratio and debt to income ratio. They will also discuss the cost of mortgage insurance, what the interest rate will be for you, and go into detail about the home inspection guidelines which are very strict.
Once they have filed the paperwork, and everything has been approved, it is up to you to make this work. You just have to ensure that you are still employed, that your credit score is at least above 500, and you will likely qualify for this loan that you need. Although there are no income limits to getting an FHA loan, you may encounter some of the problems that have been mentioned.
If you are obtaining a regular single-family home, and your credit score is above 580, you should have no problem at all getting the home that you want. You just have to wait to get your loan approved or you can also ask an update to the loan officers on how long does it take to get an FHA loan so you can set up your expectation.
You could experience delays depending upon what they find during the home inspection. They are very particular about the types of homes they will finance. Once it is done, you will be glad that you went to the process of getting this very inexpensive FHA home loan.