| If you are thinking about buying a home or refinancing | | | | borrower’s overall credit history, not just the credit |
| your mortgage, you may have been dished up some | | | | score, which is a minimum of 580. A previous |
| details regarding an FHA mortgage, and while FHA | | | | bankruptcy only needs to be discharged for two |
| mortgage underwriters need to digest a full course of | | | | years, and only three years after a foreclosure. Good |
| FHA loan guidelines, you may just want the meat and | | | | credit explanations will be required. |
| potatoes, so here are some menu highlights. | | | | · Flexible Qualifying Debt Ratios |
| · Low Down Payment Purchase | | | | The total mortgage payment including property taxes |
| An FHA mortgage can provide financing to buy a | | | | and insurance should be a maximum of 29% of gross |
| home with a down payment as low as 3.5%. If | | | | income before deducting taxes, and a maximum of |
| necessary, FHA will allow certain down payment | | | | 41% of gross income for the mortgage payment plus |
| assistance, such as gift funds from a relative. | | | | all other monthly debt payments. These FHA |
| · Cash Out Refinance Mortgage | | | | mortgage debt ratios can be higher with compensating |
| FHA mortgages allow up to 95% loan to value on a | | | | factors, such as, good cash reserves, job stability, or |
| cash out refinance, which is substantially more than | | | | a good credit history. If necessary, a non-occupant |
| conventional refinancing, and more than most home | | | | co-borrower can be added to the mortgage to help |
| equity loan programs. There are some restrictions | | | | qualify. |
| regarding the seasoning time of ownership and the | | | | One other point to keep in mind, an FHA mortgage |
| home valuation. Cash out is limited to 85% for loans | | | | requires an insurance premium of 1.5% at closing, which |
| over $417,000, and if mortgage payments were late in | | | | can be added onto the loan amount, plus, a monthly |
| the last year. | | | | insurance premium of .5% added onto the payment. |
| · Flexible Credit Guidelines | | | | Condos do not require the up-front premium, only the |
| FHA mortgage guidelines take into consideration a | | | | monthly amount. |