Thursday, February 6, 2014

What You Need To Know When Applying For California FHA Home Loans

By Jayne Rutledge


Residents in California who want to buy a family home may be eligible to apply for one off California FHA home loans. Income is one of the main criteria used to decide if the applicant is eligible and also how much they can afford to borrow. As each county in California is responsible for setting their own income levels applicants should check with the appropriate authorities what that level is before they start the application process.

Applicants will find that they are required to be completely open about their financial circumstances over the previous two years. The information is used to determine the applicants credit score which needs to be somewhere in the range of 580 to 620 to qualify for an FHA home loan. However, applicants should not be too complacent as many of the mortgage companies will look for scores of 740 or more, which can make it harder to find a reliable lender.

At the time of applying borrowers must be able to offer proof of their income over the previous two year period. The applicant must be prepared to provide full disclosure on all their income and debts for the last year. If they have had late or missed payments on any of their debts in that period it can preclude them from receiving a loan.

Your source of income does not necessarily have to be from employment. Providing your income meets the level required and is regular and ongoing, for example a pension or trust fund, you may still be eligible for an FHA loan. You should always discuss your eligibility with a certified loan adviser before starting the application process.

Applicants should always check with their loan officer to find out what the income level in their area is set at. This information is important when it comes to choosing property as the value of the property must be the same or less than the income level. Any mortgage costs each month must be less than 30 percent of the owners gross income for the month.

Anyone who have been declared a bankrupt must wait for a minimum two years after they have finished paying off their debts before they can apply for a home loan. After that period if they meet the income criteria and can show they have regular money coming in their bankruptcy is ignored. They are treated the same as all other applicants.

The loan officer will contact the applicant once they have completed and submitted the application form online. The form requires the applicant to provide their financial history and is easy to complete. Once the loan officer has reviewed the application they will contact lenders to obtain suitable loan offers and work with the applicant to identify the best option for them.

The loan officer will outline the terms and conditions of the loan offer for the applicant. They will specify the repayments, interest charges and any other charges incurred during the process. A loan officer will process the loan offer to the underwriter for reviewing and issuing the final loan paperwork for signing before the funds for the California FHA home loans are released to the borrower.




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