How to Successfully Apply for an FHA Mortgage
But what about the not-so-obvious issues?
One caveat; when we talk about “successfully applying” for your loan, we do not mean to imply your loan will automatically be approved if you take the advice below. But you won’t run into situations where you have a half-finished loan application that must be saved for later or started all over again because you lacked some crucial items.
Applying for an FHA Home Loan: Check Your Credit
Didn’t we just say in the paragraph above to check your credit? Believe it or not, this advice is not redundant.
In this context, we mean you should review your credit accounts to ensure you have not applied for another line of credit or expanded credit limits before your mortgage loan application.
The rule of thumb is not to apply for other credit when applying for your home loan. Depending on circumstances you may find it smarter to wait a few months more before applying if you applied for new credit recently.
Successfully Applying for an FHA Mortgage: Check Your Employment History
If you are new to the workforce, start a different type of work, or switch from being an employee to being a contractor, you may find that a minimum amount of time on the new job (two years is typical) is required.
That does NOT mean you must wait two years after a lateral job move or a promotion. But if you switch to a new line of work, you may need to put a minimum amount of time in before the lender will approve your mortgage. Self-employed borrowers, new contractors, and recent graduates may find this is a factor.
Gather Your Documents Before You Start Filling Out Online Forms
Expect to need the last two years of your income tax filings, and an additional year (typically) if you are self-employed or work as a contractor. If you own your own business you may be required to provide two years of profit-and-loss statements.
Without the tax and business information where applicable, your application may be delayed. If you feel ready to commit to an application, have tax docs and W2s from the last two years or their equivalents.
Also, be sure to have information on any additional savings, investments, stocks, or bonds that may count as personal assets for loan approval. Those with investments or cash reserves may be able to leverage those assets for a better deal, depending on circumstances.
Yes, this is FHA loans 101-type advice, but some people forget that some lenders won’t work with your circumstances while others will. If you encounter some lenders who can’t offer you a good deal in your circumstances, keep trying.
There is a lot of competition for your home loan and some lenders may be more forgiving than others.
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Choose Your Mortgage Lender Carefully
Getting Started With Your FHA Loan Application
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