Planning Ahead for Your New FHA Loan
Consider three basic things: your FICO scores, how much down payment might be required on the home, and how much loan you can afford.
The FICO score issue is a major one. Even if a borrower is only interested in pre-qualifying for an FHA mortgage, the FICO score question will be asked. You’ll want to know what the three major credit reporting agencies have listed for your score--you may find that there is a different FICO score number for each agency. (In such cases, the lender may choose the middle score.)
FICO scores and credit history are important. You want to see the same information your loan officer will before it comes time to have your creditworthiness judged on the basis of that information. There are three basic issues with your credit report; make sure your report is up to date, error-free, and that you don’t have any issues with identity fraud.
When it comes to the amount of your down payment, there are online tools that can help.
If you have a basic price range for the kind of home you want to purchase, the amount of your down payment can be a simple as using an online mortgage calculator to estimate how much your new loan could be and taking the required minimum 3.5% down payment from that number.
When you have a general estimate of the down payment you need it will be much easier to start planning, saving up for this down payment as well budgeting for closing costs, appraisal fees, home inspection fees, and other costs.
How Much Home Loan Can You Afford?
Finding out is a lot like figuring out your down payment but there are some variables to consider. Consider using an online mortgage loan calculator for this process, too, but figuring out the estimated loan amount and estimated monthly mortgage payment requires you to have additional information: a potential interest rate, the amount of property taxes, insurance, etc.
An online mortgage calculator can be a very helpful and useful tool, but keep in mind that the numbers you get from these tools are estimates only. Your loan officer will give you more details including a Good Faith Estimate of the loan at the appropriate time. Knowing ahead of time how much to expect is good, but the final dollar amounts will be calculated by your loan officer.
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