Since not always everyone qualifies for a conventional home loan in Laredo, there are other ways to take care of this situation. Those first time home buyers who are unqualified for a conventional home loan, they have FHA loans as the best option. But since FHA loan is a loan like any other loan and one to qualify for these loans, they must first meet all the requirements needed. The requirements for FHA loans in Laredo are; First of all the borrower must meet his/her score both FICO score and credit score. One’s FICO score is used by the lender to asses credit risk and to decide whether to extend the credit or not. Most lenders who give FHA loans use a FICO score of 580. Similarly, one’s credit score is used by the lender as a determinant for credit risk and credit extension. Also other factors to be considered for a FHA loan IN Laredo on credit are bankruptcy history, tax liens, foreclosures and judgments. Another requirement considered to qualify for a Laredo FHA first time home loan is one’s employment history. It requires that one must have been verifiably employed for two years before the application of the loan. However, in some instances, especially if one has remained in the same line of work or industry, it is acceptable to have changed jobs. Unlike other requirements, employment requirement is not so strict. It only needs you to show evidence of two years history of reliable employment. The third requirement for FHA loans is one’s Debt-To-Income ratio. This is the ratio of the amount of income you get against the amount you pay for the debts. Since it is not good to get income then almost all of it is spend on paying back the debts, most lenders consider this factor before approving the loan. Most loan lenders prefer a Debt-to-income ratio of 43% maximum and this includes one’s new mortgage payment and any auto loans, credit cards and of course, other debts found on credit. The comparison between your mortgage amount and your monthly income should be a maximum amount of 29%. The last requirement for FHA loan qualification requirement is your property. Before one qualifies for a FHA loan, his/her property is assess and determined whether it meets the minimum property standards. So an FHA loan borrower’s property must meet these minimum property standards for him/ her to be considered for this loan. These minimum property standards comprises basic standards of living to ensure a safe and healthy living home and to ensure that the FHA/HUD that the home has a good chance of being resold due to proving a quality living space if the home were to be foreclosed. Like any other loan, the FHA loan has both advantages and disadvantages. The advantages are that, it has low down payment, and loan assumability. The advantages are that there is mortgage insurance that is so costly because FHA loans mortgage insurance on all loans are paid two times.
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