FHA Loan Requirements Texas: 4 Things That You Should Know

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A lot of Americans dream of owning a starter home, either to shelter the growing families or as an early investment for the future. But home is the most expensive thing that most of us will even purchase. So, saving the money to purchase your very first one can be challenging. This is where an FHA loan can assist you.

Insured by the Federal Housing Administration and offered by the FHA-approved lenders, FHA loan can open the door for people who otherwise could not afford to purchase a home. It is because these loans have relaxed requirements than other home loan programs. Let’s have a look at the FHA loan requirements Texas:

  1. You need to come with at least 3.5% down payment

One of the first and foremost requirements that you need to fulfill to get approval for an FHA home loan program is to come with a down payment. Unlike traditional home loan programs that require a 20% down payment to get a home loan approval, an FHA loan has a lenient requirement. You can get this loan approval with a 3.5% down payment. But you should keep this in mind that it is the minimum requirement and the down payment requirement varies from a lender to another one. So, you should try to save as much as possible and come with a decent down payment.

  1. You need to follow FHA debt-to-income guidelines

Regardless of the type of mortgage you get, mortgage lenders pay attention to your debt-to-income ratio. Also known as DTI, the debt-to-income ratio measures the percentage of your pre-tax income that you spend on monthly debt payments, along with the mortgage, student loans, credit cards, and other obligations. If you find it difficult to understand, you can use a debt-to-income ratio calculator to know about this. Generally, you need a DTI of 50% or less than that. However, this percentage can vary based on other factors. So, you should ask your lender about this before applying for an FHA loan.

  1. You should abide by the income requirements

With an FHA loan, there is no minimum or maximum salary that you can earn to ensure the loan approval. But there are some of the things that you need to abide by. And one of the most important of that you should have at least two established credit accounts. Besides, you should not have delinquent federal debt or judgments, tax-related or otherwise, or debt associated with past FHA-insured mortgages. You could have an account for cash gifts that help you with the down payment. These gifts need to be verified in signed, writing and dated by the donor.

  1. Documentation is a must for you

You need to come with the general documents to get approval for this loan program. In order to prove your citizenship in the U.S., you need to show proof of a Social Security number. Besides, you should show original pay stubs, W-2 forms, or valid tax returns as necessary. There can other requirements too. You should ask your lender about this before applying for a home loan.

So, work on to fulfill the requirements for an FHA loan and then apply for an FHA-approved lender.

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