Overview

FHA Loans

FHA mortgage loans are issued by federally qualified lenders and insured by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development. FHA loans are an attractive option, especially for first-time homeowners:

  • Generally easier to qualify for than conventional loans.
  • Lower down payment requirements.
  • Lower closing costs than conventional loans.

The Federal Housing Administration created the FHA home loan for low-income buyers, as well as credit-challenged buyers. Only lenders approved by and meeting the standards established by the FHA are permitted to lend FHA loans to borrowers, and all such loans are insured by the FHA.

Because they are aimed at low-income borrowers, the terms of FHA loans are more forgiving and the requirements for borrowers are lower, they are a popular choice with first-time buyers as well as those with less-than-ideal credit. Thus, when you’re shopping for a mortgage it’s recommended to see if you qualify for an FHA loan first.

Benefits of an FHA Loan

Benfits of an FHA Loan

– Lower down payment and credit score requirements. It’s not uncommon for lenders to advertise different loans as having lower down payments, but none compare to an FHA loan: just 3.5% of a home’s purchase price is all you need to put down for the loan, a significantly lower amount than what is considered standard. What makes this particularly attractive is that you can qualify with an FHA loan in New Mexico for as low as 620. It should be noted, however, that individual lenders can still require a a higher score to mitigate risk, so please don’t view that as an absolute truth.

– Better Interest Rates

Interest rates on an FHA home loan are reflective of who they are intended for. What this means is that interest rates are lower across the board, further helping those with low income or low credit scores. Paying less each month will help keep money in your pocket for other expenses or just savings in general.

– Debt-Friendly

If you’ve ever applied for a home loan or mortgage before, you’ve likely encountered the problem of debt ratio. Most lenders require that your currently debts be no more than a certain percentage of your total income, usually 45%. Given the audience they are intended for, FHA loans allow for more leeway, with an acceptable debt limit of up to 57% of your income. However, you should still take your FHA loan payments into account alongside these debts when determining how affordable it really is.

Do I Qualify for an FHA Loan?

Beyond what has been discussed so far, there are a few other requirements you need to keep in mind:

  • Credit Score of at least 620
  • 3.5% down payment
  • You need proof of steady employment (including pays stubs, W-2s, etc.) and must provide two years of employment history
  •  You’ll also need an FHA appraisal
  • There is a two year waiting period if you’ve declared bankruptcy, and four years following a foreclosure
  • The home you’re buying must be used as your primary residence

With all of that said, there are more complexities than what can easily be described. That’s why you should discuss FHA loan requirements with a trusted lender like Davis Mortgage LTD. We will do everything we can to provide you with an FHA loan. Reach out to us today for more information or to schedule an appointment.

Charles Davis

NMLS: 299652

Overview

FHA Loans

FHA mortgage loans are issued by federally qualified lenders and insured by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development. FHA loans are an attractive option, especially for first-time homeowners:

  • Generally easier to qualify for than conventional loans.
  • Lower down payment requirements.
  • Lower closing costs than conventional loans.

The Federal Housing Administration created the FHA home loan for low-income buyers, as well as credit-challenged buyers. Only lenders approved by and meeting the standards established by the FHA are permitted to lend FHA loans to borrowers, and all such loans are insured by the FHA.

Because they are aimed at low-income borrowers, the terms of FHA loans are more forgiving and the requirements for borrowers are lower, they are a popular choice with first-time buyers as well as those with less-than-ideal credit. Thus, when you’re shopping for a mortgage it’s recommended to see if you qualify for an FHA loan first.

Benefits of an FHA Loan

Benfits of an FHA Loan

– Lower down payment and credit score requirements. It’s not uncommon for lenders to advertise different loans as having lower down payments, but none compare to an FHA loan: just 3.5% of a home’s purchase price is all you need to put down for the loan, a significantly lower amount than what is considered standard. What makes this particularly attractive is that you can qualify with an FHA loan in New Mexico for as low as 620. It should be noted, however, that individual lenders can still require a a higher score to mitigate risk, so please don’t view that as an absolute truth.

– Better Interest Rates

Interest rates on an FHA home loan are reflective of who they are intended for. What this means is that interest rates are lower across the board, further helping those with low income or low credit scores. Paying less each month will help keep money in your pocket for other expenses or just savings in general.

– Debt-Friendly

If you’ve ever applied for a home loan or mortgage before, you’ve likely encountered the problem of debt ratio. Most lenders require that your currently debts be no more than a certain percentage of your total income, usually 45%. Given the audience they are intended for, FHA loans allow for more leeway, with an acceptable debt limit of up to 57% of your income. However, you should still take your FHA loan payments into account alongside these debts when determining how affordable it really is.

Do I Qualify for an FHA Loan?

Beyond what has been discussed so far, there are a few other requirements you need to keep in mind:

  • Credit Score of at least 620
  • 3.5% down payment
  • You need proof of steady employment (including pays stubs, W-2s, etc.) and must provide two years of employment history
  •  You’ll also need an FHA appraisal
  • There is a two year waiting period if you’ve declared bankruptcy, and four years following a foreclosure
  • The home you’re buying must be used as your primary residence

With all of that said, there are more complexities than what can easily be described. That’s why you should discuss FHA loan requirements with a trusted lender like Davis Mortgage LTD. We will do everything we can to provide you with an FHA loan. Reach out to us today for more information or to schedule an appointment.

Charles Davis

NMLS: 299652

Testimonials

  • I recently worked with Charles at Vision Mortgage to purchase my first home. Charles was knowledgeable and worked with me to ensure that I got the best loan possible. He was very interactive and was always available to answer any questions that I had. I would definitely work with Charles again!

    Ranae Linton
  • I've worked with Charles on multiple occasions over the years for financing; both purchases and refinancing. His experience and integrity are unparalleled. I was particularly impressed with his breadth of knowledge of what's become a very arcane loan underwriting environment and his responsive, straightforward feedback about potential challenges if any when contemplating a transaction. His relationship and rapport with the lenders, title company and realtors helped ensure smooth transactions and made the process quite simple. The title company and realtors seemed to sigh relief when they learned he was our lender. I think that says it all. He's got my unequivocal recommendation; a true professional full of integrity and he's a pleasure to work with.

    Kevin Bassalleck
  • My husband and I have gone to Charles Davis twice now. Charles is wonderful to work with. He made our first home purchase seamless, answered any questions we had without hesitation and worked so hard for us. He was knowledgeable about our VA home loan and wanted to get us the best deal possible. We went to him for our refinance and it was again a wonderful experience. I recommend Charles to all my friends and family!

    Joile Rodriguez
  • I recently purchased my first home through Charlie and he was fantastic! You hear horror stories of the whole home buying experience but didn’t have one iota of that whatsoever. I used my VA home loan for this purchase and Charlie was extremely helpful and knowledgeable about the VA procedures and was continually updating us with information about every step of the process. I’ve been thinking about investment properties recently and will not hesitate to use Vision for all my future ventures and needs. I’ve already referred two family members to them and they’ve been treated with the same courtesy and professionalism I experienced!

    Angelo Baca
  • I worked with Charles to purchase my home in 2014 and again to refinance this year. On both occasions, I was impressed with their professionalism and knowledge. Every step in the process was explained and my (numerous) questions were answered promptly, patiently, and accurately. I would recommend Charles to anyone, but especially to Veterans looking for someone with specialized knowledge of VA loans and the refinance options available with these loans.

    Kymberleigh Dougherty
  • I recently worked with Charles to purchase my first home. Charles was knowledgeable and worked with me to ensure that I got the best loan possible. He was very interactive and was always available to answer any questions that I had. I would definitely work with Charles again.

    Rane Linton
  • We worked with Charles to buy our home and when we refinanced. He was always very patient and professional. He responded very quickly to any questions we had and he knew about all the VA options for buying/refinancing. I would recommend Charles to anyone

    Evan Lundberg
  • Charles is very knowledgeable, and great to work with. I have used them twice now, and will definitely use them again in the future. They are the best in the biz.

    Dave Auge
  • Charles Davis was unbelievably patient, thorough, and honest in leading us through the mortgage process. They are extremely knowledgeable, professional and very enjoyable to work with. I highly recommend them and have referred many family members and friends.

    Brandon Sehlmeyer
  • Over the past 15 Years, I’ve used Charles Davis for all my home purchases and have been extremely pleased. Charlie’s service cannot be beat, period! Last time I was sitting at the closing table the title agent commented on my interest rate and how low it was comparably. I recommend everyone to Davis Mortgage Ltd.... Charles just helped my 84-Year-old grandmother into a new condo and she was very impressed... not too common for her!

    John Denson
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