Applying for an FHA home takes time. You need to plan, budget, examine your credit, and save money for the fees and expenses associated with an FHA mortgage.
If you’re new to the home buying process, a great way to begin is to get an idea of how much home you can afford with your present income, debts and financial obligations.
Remember that the amount of the loan you might qualify for and the amount of mortgage payment you can actually afford may be two different things altogether.
How much is your monthly mortgage payment? That depends on a variety of factors including your down payment, interest rates, the term of your loan and other factors.
Another step in preparing for an FHA home loan is to anticipate fees and expenses associated with the home buying process. You may be required to pay for appraisals as well as compliance inspections should the appraisal turn up things that need to be corrected or repaired as a condition of the loan.
There may also be pest inspections, hazard insurance and other expenses to budget for, and borrowers should definitely set aside money for a separate home inspection, which is quite different than an appraisal.
The FHA loan down payment is another area borrowers will need to prepare for–the down payment is mandatory (a minimum of 3.5%) and other fees and expenses may not be used toward the down payment. All borrowers are required to document the sources of their down payment funds–you can’t use cash advances from credit cards, payday loans, or other “non-collateralized” types of loans to make your down payment.
If you have questions about this or are looking at getting an FHA Home Loan, contact our office in Joplin, MO today and we’ll be happy to speak with you.