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Are you planning to submit an application to fha texas to be used as a capital for your business? Well, you need to meet their requirements.
Applying for a loan application to a fha texas is like applying for a job. Every FHA lender has requirements for the borrowers that should be met. These requirements helped lenders ensure they will approve the borrowers who are capable of paying debt installment on time. Here are ways on how to be qualified to get a loan.
Table of Contents
Check if You are Eligible
This requirement is the most basic. It includes:
- Good credit score
- Have at least 3.5% down payment on the existing loan
- Capable of repaying the mortgage on time.
You Have a Stable Job
Lenders want to ensure they approved applicants have a source of income to repay their debt. Most lending companies approved applicants who have worked to a company for a year or two in the same field or employer.
Established a Good Credit Score
As much as possible, borrowers should have at least 580-640 FISCO score. In the eyes of lenders, these scores mean a lot. It represents you are trustworthy and credible.
You Must Have a Good Credit History
This requirement is the most crucial factor to get approved for the loan. The FHA lending companies want to ensure you will pay on time.
Benefits of FHA Loan
Currently, FHA loan is the most lenient loan program because it only requires a 3.5% down payment to qualify for an FHA-insured mortgage for borrowers with a mid-FICO score of 580 and above. Conventional loans, on the other hand, require at least a 620 mid-FICO. Although FHA requires you to aim 580 FICO score, it is advisable to try to pull credit scores up to at least a 640.
Another best feature of FHA is its downpayment that can be paid by any of a family member as a gift. To be qualified, the donor needs to provide the source of the money that will be used as a “Gift Fund” to the borrower.
Reasons why loan application disapproved
Not all applicants can be granted to get loan requests because of some reasons. The good news is, these issues can be avoided.
Series of debt issues related to income
This issue brings a bad impression to any lenders. When you apply for a loan, you should expect the lender will check your debt-to-income ratio (DTI). They want to know how much money you earn each month, and they will base their decision if they approve your application or not. Moreover, most of them require applicants to have total debts, not higher than 43% of their gross monthly income.
The solution is simple. Reduce your debt load by paying it on time.
Income is not enough to pay the debt
It is a common problem among FHA borrowers. If the lenders find your salary is not enough to complete the payment, you probably will not get the desired loan.
There are two solutions to this issue:
Increase your income or
Decrease the amount you are trying to borrow.
Too low credit score
Having a too low credit score is a major “turn-off” to lenders. The rating reflects what kind of borrower you are.
Request a copy of your credit report from the agencies through AnnualCreditReport.com. Check if there are errors in the reports because they can drag down your score. If there any errors, have them corrected.