Purchasing a home can be a daunting process, especially if your financial situation poses a risk. Fortunately, you can take advantage of an FHA loan if you have a low credit score or carry a debt. If you’re looking for a mortgage loan that meets your specific needs, here’s what you should know about this option.

What Is an FHA Loan?

Insured by the Federal Housing Administration (FHA), an FHA loan is a mortgage ideal for many first-time homebuyers. The credit requirements for this loan are more flexible and considerably less restrictive than the average home loan, making it an attractive option for people in certain financial situations. With an FHA loan, you can take advantage of reduced down payment requirements. The minimum required credit score is also lower, opening the applicant field to people who may not quality for conventional loans. Often, closing costs can be combined with the loan for the buyer’s financial convenience.

Who Qualifies for It?

There are several requirements you must meet before being approved for an FHA loan. While you must have a minimum credit score of at least 500, a lender, be it a bank or a credit union, may require a greater score. Many lenders prefer to assist in getting your middle credit score higher prior to submitting your mtg application so the loan process is less difficult over-all.  Your debt-to-income ratio, meanwhile, must also be under 50. This means the total that you owe to lenders overall can’t be 50% more than what you earn before taxes. The property itself must also meet the FHA’s requirements, too. It must be appraised to ensure its safety and that it’s worth the amount that you’re planning to pay. Finally, the lender you choose will assess your income and credit information. 

If you’re interested in applying for an FHA loan, turn to The Mortgage Guys in Fairlawn, OH. They offer a range of mortgage services to help you secure a fair and sensible loan as you prepare to purchase your new home. Visit the website to learn more about their options for home loans, or call (330) 869-6344 to speak with Jeff.