FHA Mortgage Lending Advice
The FHA Mortgage Lending Blog was created by approved FHA lenders, processors and DE underwriters with experience in an effort to provide an online guide for FHA mortgage loan programs that include, refinance, purchase, cash out, streamline and home rehabilitation. Our FHA lending experts publish articles and reports that provide tips for FHA loans online. Our finance staff developed this website for anyone interested in FHA news and government home loans. Whether you want specific details on FHA loan programs or simply want to see the current FHA rates, this financing portal covers the entire lending spectrum. We have become one of the top marketplaces for FHA lenders who provide government mortgage programs sponsored by the Department of Housing and Urban Development.
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Our FHA lenders concentrate on providing consumers and mortgage professionals with the latest news and highlights for lending niches from a loan origination perspective. Our FHA lending blog has received numerous mortgage news awards in 2007 and 2008.
FHA loan qualifications begin with an FHA mortgage lender who will evaluate your debt to income ratio which is simply dividing your monthly expenses by your monthly income. With traditional mortgages, (ie. conforming home loans), lenders will typically allow a 28% of your gross monthly income on housing costs such as mortgage interest, principal, property taxes and home insurance. Conventional mortgage guidelines will usually enable you to shave a debt to income ratio of 36%.
The FHA streamline become an extremely popular loan program in 2010 because it is the only refinance loan that enables borrowers to state their income without providing documentation like paystubs or W2’s. The streamline refinance is also well liked because in most cases, no equity is required because the appraisal is typically waived.
With FHA mortgage guidelines, the typical ratios are 31/43, but DE underwriters have the authority to approve borrowers with higher debt ratios if they have significant compensating factors. This is a major benefit first time homebuyers can find with FHA home loans because the guidelines are more flexible allowing applicants to get better and more aggressive financing than with conforming or mortgage loans.
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Credit scores have never been part of the FHA lending equation, but now it appears the default rates have forced HUD to implement new criteria for low fico borrowers who have a history of bad credit. FHA loan programs will still approve borrowers with bad credit, but in some cases they may require a higher down-payment on a purchase or more equity if refinancing. Regardless, FHA remains committed to financing American borrowers in 2011, just as they did when the government created the Federal Housing Administration in 1934.