Locate a lender that will originate an FHA loan. When you call different lenders and mortgage brokers for rates, ask specifically if they are willing to take on FHA loans. Most will, of course, so you will need to shop around for the best rate. Bear in mind that HUD/FHA does not actually create the loan; instead, they insure the loan against default. Because this offers an immediate security for the lender, many are willing to take on the responsibility of originating an FHA-insured loan.
2
Provide the lender with all requested information regarding income, financial history. Any loans comes with some risk, so the lender must take the time to review the financial background of the individual or individuals who are applying for the loan. You will need to have copies of your tax return from the previous year, your pay stub for the last couple of months, and a credit report. Lenders cannot discriminate against you based on income, because an FHA-insured loan has no income limitations. This being said, the lender will still need to research your financial information before approving the loan. Most important, the FHA and the lender require a solid debt-to-income ratio, meaning that the debt you will incur on the loan will not supersede your ability to pay.
3
Pay the mortgage insurance premium of 2 percent. This fee will be required during the loan process, and you will pay it to the lender, which will then submit it to the FHA. This fee represents a mortgage insurance fee -- 2 percent of the total loan--that the FHA requires before giving the final approval on the loan. The FHA will be responsible for the loan if you are required to default on it, so you pay the upfront fee of 2 percent, in addition to a monthly mortgage insurance payment, to the FHA. Note that this fee is built into the mortgage that you pay to the lender; the lender is responsible for submitting the monthly fee, as well as the initial 2 percent fee, to the FHA.
K. Lorette HUD
Locate a lender that will originate an FHA loan. When you call different lenders and mortgage brokers for rates, ask specifically if they are willing to take on FHA loans. Most will, of course, so you will need to shop around for the best rate. Bear in mind that HUD/FHA does not actually create the loan; instead, they insure the loan against default. Because this offers an immediate security for the lender, many are willing to take on the responsibility of originating an FHA-insured loan.
2
Provide the lender with all requested information regarding income, financial history. Any loans comes with some risk, so the lender must take the time to review the financial background of the individual or individuals who are applying for the loan. You will need to have copies of your tax return from the previous year, your pay stub for the last couple of months, and a credit report. Lenders cannot discriminate against you based on income, because an FHA-insured loan has no income limitations. This being said, the lender will still need to research your financial information before approving the loan. Most important, the FHA and the lender require a solid debt-to-income ratio, meaning that the debt you will incur on the loan will not supersede your ability to pay.
3
Pay the mortgage insurance premium of 2 percent. This fee will be required during the loan process, and you will pay it to the lender, which will then submit it to the FHA. This fee represents a mortgage insurance fee -- 2 percent of the total loan--that the FHA requires before giving the final approval on the loan. The FHA will be responsible for the loan if you are required to default on it, so you pay the upfront fee of 2 percent, in addition to a monthly mortgage insurance payment, to the FHA. Note that this fee is built into the mortgage that you pay to the lender; the lender is responsible for submitting the monthly fee, as well as the initial 2 percent fee, to the FHA.
K. Lorette HUD