For anyone thinking of getting an affordable FHA loan, Colorado experts recommend that you learn as much as possible about the process of searching for a reliable lender and about the various requirements associated with obtaining a loan. Even though FHA loans are affordable mortgage loans that have very few restrictions compared to other types of loans, there are still a few eligibility factors involved.
Understanding FHA Loan Requirements
Compared to the requirements of conventional mortgage loans, an FHA loan will be a lot easier to obtain. First of all, you only need a credit score of 620 and higher in order to qualify. The full extent of this requirement, however, is to have fewer than two 30-day and at most one 60-day late payment in the past 12 months.
Even though most lenders will require a 620 credit score, this isn’t the minimum you can qualify for an FHA loan. Some lenders will also accept the minimum score of 580, and many of their other requirements are also far less demanding.
Another important fact about FHA loans is that they’re only available for primary occupancy. This means you have to actually intend to live in the home you’ll buy with your new mortgage.
There is also a small down payment you’ll have to support, however, it’s much smaller than what you’d normally need to provide when considering other types of mortgage loans. FHA loans can typically provide you with about 95% of the total amount you’ll need to buy a new home. Them inimum down payment required is 3.5%.
Finally, if you filed for bankruptcy in the past 3 years, or if your bankruptcy discharge rate is within a period of 2 years before you try to get an FHA loan, you will have to wait it out and apply at a later date.
Find a Reliable Lender to Support You
A good lender is the most important asset you can obtain in the search for an FHA loan Colorado homeowners would love to have. Most loan offers will depend heavily on the lenders, their imposed restrictions, their fees and their interest rates. So you’ll always win when you can find a lender who will be willing and able to help you out.
Communication is, therefore, of paramount importance. You have to first do a background check on any lender you want to work together with, and find out if they can give you the customer support and assistance you require. Colorado review sites where borrowers can post their honest opinions about the lenders they’ve had dealings with are your best choice for that.
Also, you will definitely want a lender who is trustworthy. Beware of lending institutions that sugarcoat their loan offers, and make sure you won’t have to pay a lot more than you might think, or that the lender will be fair in dealing with any financial difficulties you might come across during the term of the loan.
Finally, it is, of course, essential that you try to get the ideal offer that best suits your financial situation. The interest rate, fees and insurance costs should all be considered, and you may also need to make sure the lender has flexible offers when it comes to the mortgage payoff schedule.