“Want to get approved for FHA loan in 90 days?”
First off, the best way to get a mortgage with little money down is qualifying for an FHA insured loan from the Federal Housing Administration (FHA). Especially, if you are a first time home buyer hoping to score a low downpayment to purchase a home.
This type of mortgage loan allows the borrower to qualify with a credit score as low as 580. Generally, the down payment for FHA is only 3.5% even with a 580 credit score. There is a security safety requirement for obtaining this type of mortgage loan, all FHA loans require the borrower to pay mortgage insurance premiums. A benefit that gives the lender extra security in case the borrower defaults on the mortgage loan.
“FHA loan is a win-win for the borrower and lender.”
The payments are still affordable, even with having to pay mortgage insurance premiums. Where the loan is backed by the government covering the lender in case the borrower defaults down the road.
While you don’t exactly need perfect credit to qualify for an FHA loan, there are still credit issues you need to resolve before applying to qualify. The fact that the borrower can have a low credit score of 580, the federal government backs the loan with approved lenders by helping to reduce the risk of mortgage default.
Get Approved For FHA Loan In 90 Days
Follow these steps to get approved for an FHA loan in 90 days.
First, pull your credit reports from Annual Credit Report – It’s 100% FREE! Federal law requires each of the three nationwide consumer credit reporting companies – Equifax, Experian, and TransUnion – to give you a free credit report every 12 months if you ask for it. They also make it easy to accomplish many credit-related tasks right from your computer.
- Credit reports may affect your mortgage rates, credit card approvals, apartment requests, or even your job application.
Before you get your credit reports, you will answer a few more questions. These questions are meant to be hard. You may even need your records to answer them. They are used to ensure that nobody but you can get your credit information.
If you can, print your credit reports so you can look at them later.
Second, signup for CreditCheck Total to find out your credit scores and monitor your Experian®, TransUnion® & Equifax® credit reports.
Good credit can save you thousands of dollars each year at better interest rates. Find out if the information reported from the three Credit Bureaus is accurate and up-to-date.
Third, determine what your credit scores are for all three credit bureaus. You should aspire to have a 580 or above with all three credit reporting agencies.
Having a 580 or above will allow you to put down just 3.5% on the purchase of a home. If you have less than a 580, your credit score still can’t be below 500.
If your credit score is below 500, this will require you to put down 10% on the purchase of a home. However, keep in mind that most borrowers are rarely approved for FHA loans with scores below 580.
In order to qualify for an FHA loan with a 500 credit score, your LTV can be at 90 percent and it would also require a 10% down payment. Again, most borrowers are only approved with a 580 credit score.
Fix Credit To Qualify For FHA Loan
Most people are shocked to learn that they can fix their credit and qualify for an FHA loan in as little as 90 days.
If you pulled your credit report and found that your scores were lower than 580, you need some work before applying for an FHA loan.
Credit Disputer Secrets: DIY Credit Auditor Training Guide is the best solution to improve your credit score fast!
FHA Loan Limits
- $294,515 in low-cost areas.
- $679,650 in high-cost areas.
FHA Loan Requirments
- Must be owner occupied – Borrower must live in the property and not purchasing as a rental property.
- 2 years of verifiable employment.
- 2 years of verifiable tax returns – w2’s.
- Max DTI ratio of 41 percent.
Some great factors of qualifying for an FHA loan is that the down payment of 3.5% can be a gift with a 580 credit score. The borrower can also choose between 15 or 30 years fixed rate or adjustable rate term.
One excellent benefit is that FHA loans allow down payment assistance programs and grants to pay the 3.5% down payment with a 580 credit score.
Which the seller can also pay up to 6% of the closing cost for the borrower!