Florida FHA Loan
Florida is known as the Sunshine State and a haven for buying and finding really good real estate property. The fact for most home buyers is that when you need a home, you will require a home loan -- who best to work with than a mortgage company that can offer the FHA loan programs. When we talk about a Florida FHA loan, there is an FHA loan limit applicable in different counties; these change to keep up with market conditions.
When applying for a Florida FHA loan, one of the first things an underwriter will look for is that the borrower has demonstrated a good repayment history for all debts within the last 12 months. The credit history basically outlines your willingness to pay back your Florida FHA loan. This really is one of the key ingredients to obtaining approval. Other major factors include your income, employment stability, and debt ratios. FHA loans are backed by HUD, which provides additional security to mortgage lenders in the case of default on a loan. As these loans come with additional security, most Florida lenders are more willing to offer borrowers very low interest rate FHA loans.
If your credit history -- in spite of sufficient income -- keeps on reflecting late payments and delinquent credit accounts, then approving your loan may be impossible without sufficient documentation and explanation. Here's a brief synopsis of various credit underwriting guidelines for an FHA home loan:
- Credit History: As a borrower, you will need to have a minimum of 4 trade lines. If they are not reflected on your credit report, we can use alternative credit such as phone bills, utilities, and rent.
- Credit Obligations: An installment loan like a student loan or a car loan, which has less than 10 months remaining, does not have to be included for a FL FHA home loan qualification. The things that can be considered will include large debts (this is independent of the number of months left). If you have an open revolving account that doesn't show any balance, then an "estimated assumed monthly payment" may be included for each open revolving account as part of your back-end debt ratios for qualification.
- Bankruptcy (Chapter 7): Florida FHA requires a minimum of 2 years since the time of discharge of the bankruptcy. You will have to attach an explanation of the bankruptcy along with your bankruptcy discharge documentation. You will also need to show you have re-established credit without any late payments. Alternative credit can be used as part of your new trade lines. In some instances, under our FHA credit flex program, we can consider a bankruptcy discharged as little as 12 months ago.
- Bankruptcy (Chapter 13): FL FHA will consider you for an FHA loan if you are still paying on a Chapter 13 bankruptcy, provided all of your payments have been made to the court satisfactorily within the previous 1 year and you have written approval from the trustee.
- Foreclosures: You need to make sure when you are applying for the Florida FHA loan that you do not have any pending foreclosure on your property, any late payments, or any foreclosures within the last three years. If you have had a foreclosure on a property that you financed using the FHA loan program, you will not be eligible for another FHA loan.
- Federal Debt: Before you apply for a FL FHA mortgage, make sure that you don't have any defaults on other federal debts. A federal debt can include a past FHA Loans, VA mortgages, SBA loans, and student loans.
Qualifying For A Florida FHA Loan
In a nut shell, it's typically easier to qualify for an FHA home loan in Florida than it is to qualify for conventional loans with like kind terms and conditions. The FHA loans are underwritten and funded by a FL mortgage lender. Some of the benefits of a Florida Federal Housing Administration home loan are:
- FHA loans offer tax-deductible interest
- You can acquire equity over a certain period of time
- The closing costs on the FHA loans are regulated
- There are no set income limits
- The credit criteria for qualification is lenient compared to other loans
- They are fully assumable
- Absolutely never a prepayment penalty
- And there are many more benefits too!