The mortgage qualification may be confusing to borrowers.  Collecting documents, verifying financial information, and more may seem overwhelming.  The type of mortgage that you choose, will dictate the specific requirements and documentation required. This is why working with a skilled, experienced, knowledgeable loan officer is so important.  Depending on your financial situation, job status, and other factors, an FHA loan, backed by the Federal Housing Authority, may be the best option for you.  These loans were created by the government to provide affordable mortgages to homebuyers.

The Federal Housing Administration, FHA, provides insurance to protect lending institutions if you default on the loan. These mortgages can only be issued for single or multi-family homes for a primary residence. An FHA loan requires a minimum down payment of only 3.5% and the seller may contribute up to 6% of the sales price to assist towards closing costs and/or pre-paid expenses like insurance and taxes. FHA loans are also good for borrowers that may have limited credit.

Let’s take a closer look at these requirements.  In order to prove that you have a steady, adequate income you’ll need to provide pay stubs and tax returns.  Your debt-to-income has a couple of different benchmarks. Typically, your mortgage payment should not exceed 31% of your gross income.  Furthermore, your mortgage payment plus your other monthly debt (credit card bills, loan payments, car payments, etc.) should not exceed 43% of your gross income.  Properties must also meet HUD guidelines and be inspected by HUD-approved appraisers, amongst other requirements.

The most important part of the home-buying process is to find the mortgage that works best for you. This is where a trusted loan officer comes in. The expert staff at Standard Mortgage (NMLS#: 44912) is here to help. For over 90 years Standard Mortgage has been helping home buyers and homeowners.