5 Steps To Qualify For An FHA Home Loan

Many people are confused about the requirements of qualifying for an FHA mortgage. Let's review some of those requirements here.

1. You must live in the house that you buy. This isn't usually an issue, but you can't use an FHA loan to purchase an investment property. Your intention with the house needs to be for living, and it needs to become your primary place of residence as soon as the deal closes.

2. The property does not need to be inspected. This is a common mistake. Most potential homebuyers believe that an FHA mortgage requires a home inspection. Not so. However, home inspections are highly, highly recommended. You really should never purchase a home that hasn't been thoroughly inspected.

3. Your mortgage amount must be lower than the maximum allowed mortgage amount for your area. This amount is determined by county. Research your local FHA maximum.

4. You need to be able to prove a steady, stable employment history. You need to have spent at least a year at your current job, preferably more. If you have a choppy or non-standard work experience, you'll need to be able to demonstrate adequate and consistent proof of income. Even this may not be enough, though. The best bet is simply to have a secure job background. If you own a business, be prepared to show income statements.

5. You'll need to be able to front 3.5% of the total loan amount in the form of a down payment. This is extremely low, which is what makes FHA loans so attractive. If you have extremely poor credit, however, you'll need to front at least 10% of the loan as a down payment.

There are additional details as well, but these are the basics and this list is certainly enough to get you started. Seek more thorough assistance from a mortgage professional.