Lots of people want to buy a house, but they think that affording one will be impossible. Traditional bank lenders don’t just want you to have money in your bank account to make a down payment, they want to know that you have minimal debt and a steady source of money flowing in. Thankfully, there are Federal Housing Administration (FHA) loans which most people are able to qualify for.

You can use an FHA loan calculator to figure out what price bracket of homes you can shop for once you determine how high of a monthly mortgage payment you can make. Loan calculators aren’t just used to determine the total sales price that can be afforded, they are good for helping home buyers to stay within their budgets.

Why You Should Start Working with a Budget Before Buying a Home

People make a lot of effort to clean up their credit histories, save money diligently, and rid themselves of poor spending habits in anticipation of getting a home loan application approved. After all, putting forth your best effort will help you to get your loan application approved and potentially enable you to purchase a home that is slightly more expensive than you considered getting the okay on.

The thing about budgeting is that it takes discipline, and unfortunately, there are lots of new home buyers who get excited about buying furniture, remodeling and improving their homes to their detriment. You won’t want to start blowing your budget just because you want your new home to look nice because you could soon see yourself falling behind on loan payments.  Help avoid falling into the track of not maintaining a budget by learning how to follow your savings plan in a strict and dedicated manner.

What Goes Into The FHA Home Loan Qualification Process?

Home loans from the Federal Housing Commission are meant to help stabilize and stimulate the housing market. For instance, rural areas tend to have more residents with lower income levels and spotty credit ratings, so they don’t have great luck when trying for traditional loans. FHA loans have lowered credit rating requirements and enable applicants to qualify for down payment assistance from additional sources. All in all, people who are able to get their FHA loan applications approved don’t generally have to go through a lot of red tape.

Yes, financial records are analyzed, debt to income ratio is calculated and last but not least, minimum down payments are necessary to qualify, but once FHA loans are approved, home buyers can close on the homes that they want to purchase rather quickly. So, if you have a job or a business that is viable, you only need to have a credit score of 580 points to qualify. With the minimum credit score requirement satisfied, proof of income documentation and at least 3 to 10% down, you will definitely find a house that can be purchased.

What To Know Before You Go To Closing

After getting an FHA loan approved, making an offer and having the seller accept it, it can be just a couple of weeks before you are sitting down at closing. This is the time that sellers and buyers sign all contracts related to the sale of a home. Closing is considered to be final in all but a few very specific circumstances. The first thing that you want to do before you get to closing is find a real estate lawyer who can draft up the sales contract in a way that keeps you and the seller protected.

Figure out which provisions are most important to you and work with your attorney to resolve any issues that arise well before your closing date comes up. Simply put, you shouldn’t buy a home unless the seller meets all of the requirements that your sales contract lays out. If there are any things that have not been satisfied, the price of the home can be lowered or the seller can be obligated in writing to satisfy all warranties within a certain amount of time. Although you don’t want to wait to buy your home and get to closing, you definitely don’t want to have to make expensive repairs and improvements if the seller made promises to you and your real estate attorney.

How to Find Out Which Homes Are Available Under FHA Rules

FHA insured loans don’t place many restrictions on the kind of homes that can be purchased, but there are a few that you should familiarize yourself with in advance. For the most part, you can only buy what qualifies as a single family home under FHA rules, but that doesn’t meant that you only can consider purchasing single occupancy dwellings. In fact, FHA insured loans have been used for duplexes and even homes that house up to four families for years.

You will need to prove that your income is high enough to pay the mortgage note fully, but multi-family dwellings are good for helping you to seek immediate financial relief. FHA loans can be used to buy condos but you might not have an easy time locating units that are approved. In general, single detached homes are the best types of home to shop for with this type of mortgage product.

Can You Get an FHA Loan More Than Once?

Some people might believe that they can only qualify for an FHA insured loan only once in their lifetimes, but there’s nothing to stop them from buying all of their homes with FHA approved mortgages. Of course, most of the time you will need to have the first FHA insured loan that you take off fully satisfied before you are able to qualify for another one.

One exception to this rule includes needing to suddenly relocate for your home and requiring housing for you and your family. If your job has moved and you won’t be able to retain it unless you relocate, it would be possible for you take out an additional FHA insured loan. You could also be required to sell your first FHA home as soon as possible, but you might have other options that allow you to retain both open loans.

There are many financial experts that you can talk to about getting FHA loan approval easier than a traditional home. Home buyers who only have a couple of years of history on their credit reports frequently go the FHA insured loan route so that they don’t need to explain why they don’t have better credit ratings. If you need help getting down payment assistance, qualifying for an FHA loan will also put you in a better position. Lastly, FHA loans are great for people who have never attempted to get home loan approval as the process is clear cut and not complex.