Buying a house is an achievement that almost everyone looks forward to. The process is a lot easier with many different types of loans to choose from. An FHA loan is one of the most common types to choose from, and it is backed by the Federal Housing Administration. It is basically designed to help individuals who are first-time home buyers or those with lower credit scores get approved for a mortgage. If you are reading this post, you must wonder how long it takes to get an FHA loan.
Overall, getting approval for an FHA loan can take a month or two. Generally, an FHA loan is a process that is easier than a conventional loan process. However, FHA loans could require additional documentation to see if you, as a borrower, meet all the requirements of getting the loan. Again, you should know that there are FHA loan limits that vary and depend on your location or state you’re buying in. This article will discuss the process of getting an FHA loan and what needs to be done to get approval.
Consider Your Credit Score
Your credit score is the most important factor to take into consideration when trying to get an FHA loan. This is because FHA is very strict with specific requirements when it comes to your credit score. Borrowers are required to have a score of at least 580 to qualify for the lowest down payment, and if you have a higher credit score, you’ll be able to get better-priced interest rates resulting in lower monthly mortgage payments.
Find an FHA Approved Lender
This is another crucial step in getting an FHA loan. Not all lenders offer FHA home loans; therefore, you must do proper research and find a lender who offers FHA loans or work with a broker to help guide you through the process. Once you find them, they will help inform you of all the requirements and documentation needed to get approved.
Mortgage rates and insurance requirements are among the main differences between FHA and Conventional loans. FHA mortgage insurance premiums (UFMIP) and monthly mortgage insurance premiums (MIP) are both required in the process, and these are designed to protect the lender in case you as the borrower default.
The MIP is part of the monthly mortgage payment, while the UFMIP is an upfront cost financed into the loan. Also, note that the insurance cost varies depending on the loan amount and length of the loan term.
Documentation and Underwriting
The next step is to provide all the necessary supporting documentation for the data you provided in your loan application. These papers include things like bank statements and tax returns.
You must also be a borrower with a debt-to-income ratio of less than 43%, a steady income, and a strong employment history. You should also have proof of your assets, liabilities, and credit report.
Final Approval
After providing the lender with all the necessary documents and meeting the FHA loan requirements, your applications will be submitted for final approval. In this stage, the FHA lender will review your financial information and credit score to see if you qualify for the FHA loan. If all the documents provided are in order and you qualify for the loan, the lender will approve your application, and you’ll be able to move forward with the process of getting the loan and finding your dream house.
This entire process can be fast if you have an existing FHA loan and just need to refinance it. An FHA loan can be refinanced through the Federal Housing Finance Agency (FHFA), and the process can take approximately 30 days.
Closing
Closing is the final stage in the process of getting an FHA loan. Here you sign the loan documents and pay any closing costs. This closing process may take a few days, but sometimes longer if there are any delays during the process.
Conclusion
The process of getting an FHA loan on average, takes 30 to 60 days, depending on several factors. This loan aims to help first-time home buyers with lower credit scores get approval for a mortgage. During the process, it is important for you to understand the FHA loan requirements, find the right FHA-approved lender, and be ready to pay the mortgage insurance premium
Why choose Smart Money Hawaii to help you get your FHA loan?
The best choice you can make is to hire a professional to handle all the hard work for you because obtaining an FHA loan is a time-consuming and confusing process. A professional with experience and knowledge in handling such circumstances will guide you through the process and make it easier for you.
Because we at Smart Money Hawaii recognize that every client is unique, we provide personalized services to each and every one of our customers. To assist you in achieving your objectives, we take the time to comprehend your unique needs. We can evaluate which loan type will work best for your situation, whether it be an FHA loan, USDA loan, Conventional loan, or a VA loan. Take the guesswork out of the equation and have one of our experienced loan originators figure it out for you.
Our team of professionals can answer any questions you may have about the application for an FHA loan. To begin the process of obtaining your FHA loan, get in touch with us right away for a free consultation.