FHA loans have flexible credit and income requirements to help people who might not otherwise be able to qualify for a mortgage achieve their dream of homeownership.
Unlike traditional mortgages, FHA Loans allow 100% gift funds for your down payment and closing costs – and down payment assistance programs are available
With a traditional mortgage, you need a traditional down payment of as much as 20%. You can qualify for an FHA Loan with a down payment as low as 3.5%.
FHA Loans offer low interest rates to help you afford your payments and get into the home of your dreams
To qualify for an FHA loan, you will need proof of employment, a FICO score of 500 or higher, a down payment of at least 3.5%, and a debt-to-income ratio of less than 43%. You’ll also be required to purchase mortgage insurance.
A down payment is an up front payment towards the cost of a home. Typically, the more you're able to put down, the lower your interest rate and monthly payment.
Why would you get a lower interest rate? When you put more money down, you're taking some of the risk from the lender. It is your cash investment in your home and the lender can reciprocate by giving you potentially lower mortgage interest rates.
Typically, to get the lower mortgage rates, you will need down payment of at least 20 percent of the home's purchase price.
It is possible to purchase a home with a down payment of 15 percent, 10 percent, or even less. FHA mortgages and VA loans are government backed that may be available to qualified home buyers with little or no down payment. With these loan programs, you may be required to pay for mortgage insurance, which is an additional monthly expense to your mortgage payment.
The mortgage loan process mostly consists of mortgage paperwork; providing documents to show how much you earn, where you've lived, monthly debts and account balances.
Most of the information can either be provided in person or on your application. There are a number of additional documents you may need to provide - it will depend on where you are in the loan approval process.
Mortgage prequalification is an assessment of whether your debt-to-income ratio fits mortgage guidelines and provides an estimate of the amount you may be able to borrow. A prequalification letter can also be given to your real estate agent to show you are a serious home buyer. Prequalification is optional, but it's a helpful step in the process of buying a house..
Mortgage prequalification is free and doesn't require a commitment from you or the bank or credit union.
It is convenient to get prequalified and can help you in the mortgage process. Here's what you'll need to provide for a mortgage prequalification:
You can apply for pre-approval at any time, regardless of whether you've completed the prequalification process. You'll complete a full mortgage loan application, which will include the following information.
This is a partial list as varying information and documentation can be requested during the closing process. Your mortgage specialist can tell you about any additional requirements.
Employment & Income History
A list of any new monthly debts not listed on your credit report (auto loans, student loans, mortgage loans, credit cards, etc.), including creditor name, address, account number, minimum monthly payment amount and outstanding balance on each account.
Additional documents may be required at your mortgage closing. Your real estate agent and mortgage loan officer will let you know which documents will be needed when you close on your new home and they'll work closely with you at each step of the mortgage loan process.
Your credit score, or FICO score, is a number that reflects your financial responsibility and helps lenders decide if you're a credit risk or not. Your score is based on - but not part of - your credit report. It's generated at the time of the request, then included with the report.
The five factors that determine your Credit Score are:
Learn more about what determines your credit score and how your score is interpreted.
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Loan approval is subject to credit approval and program guidelines. Interest rate and program terms are subject to change without notice. Mortgage, Home Equity and Credit products are offered through PrimeWay Federal Credit Union. Deposit products are offered through PrimeWay Federal Credit Union.
To guarantee a rate, you must submit an application to PrimeWay and receive confirmation from a mortgage loan officer that your rate is locked. Application can be made by calling 713-799-6200, by applying online, or by meeting with a mortgage specialist.
Interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regard to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.