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Buying a home is an important financial decision and there are many questions that FHA loan applicants have in the planning stages of the loan. Fortunately, there are simple answers to many common questions about buying a home with an FHA loan.

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Questions and Answers About FHA Mortgages for 2017

Questions and Answers About FHA Mortgages for 2017
January 10, 2017 - Buying a home is an important financial decision and there are many questions that FHA loan applicants have in the planning stages of the loan. Fortunately, there are simple answers to many common questions about buying a home with an FHA loan. Here is a small list of important questions and their answers:

How do I plan for my FHA purchase loan?

If you want to become truly ready to fill out the paperwork for an FHA loan, give yourself enough time. Home loan applicants should start getting ready at least 12 months before actually filling out an application, and with good reason. It takes time to check and verify your credit reports with the three major credit reporting agencies, if you discover things that need to be corrected on those reports you’ll likely need additional time to work those issues out.

What else can require a year to prepare for the loan? Time to make a budget and save up enough money to make your required down payment. There are other expenses to save for: closing costs, home inspections, and Up Front Mortgage Insurance Premiums. You can get help in the planning stage by contact the FHA directly at their toll-free number (1-800 CALL FHA). Ask for a referral to a local, HUD-approved housing counselor who can help you in pre-purchase planning stage of your loan.

How much do I need to save in order to make my down payment?

Unfortunately there’s no one set answer to this-much depends on a number of variables including the price of the home. However, there are tools to help you arrive at an approximate dollar amount (which should only be viewed as a rough estimate). You can use an online mortgage calculator to calculate this approximate amount and start saving.

Are there other expenses I should anticipate?

Other home loan related expenses include appraisal fees, closing costs, discount points, and compliance inspection fees where required that will be part of your closing costs. Depending on your loan, the lender may permit certain fees to be included in the loan amount-this is true of discount points on some types of FHA refinance loans, for example. These are issues that may affect your loan and monthly payments depending on whether you choose to finance certain costs or pay them up front. In some cases, paying at closing time may be preferable to adding that expense into the loan.

What other paperwork will I need to provide the lender?

Borrowers are commonly asked to give copies (not originals) of tax records, pay stubs, proof of income, etc. Lenders will need additional documentation for legal issues (a pending divorce for example) or existing divorce or child support agreements if the borrower chooses to have child support included as income. Are you applying as a self employed person? Business documentation such as profit and loss statements may be required. Assume that any income you wish to have included in your debt to income ratio will need to be reviewed by the lender and will require proper documentation.

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