What is an FHA Loan?
FHA Loans in New York Help First-Time Home buyers
FHA loans in New York are not just for prospective home buyers with low incomes. These home loans, backed by the United States federal government, are designed to help secure suitable financing for families who would otherwise be unable to secure mortgages in New York. Total loan amount must be 29 percent of less of monthly income.
The primary selling point of FHA mortgages in New York is the low required down payment. Families can buy a home with a down payment that is as little as 3.5 percent of the total purchase price. The government does not provide the loan funds bur merely guarantees them if the borrower defaults on the mortgage. Another main advantage to FHA loans in New York is that credit criteria is not as strict as conventional financing, allowing those with poor credit to apply for loans when reasonable explanations are provided. A minimum credit score of 580 is required. Individuals who have declared bankruptcy can apply for mortgages in New York under the FHA program in as little as two years after a chapter 7 bankruptcy or a minimum of one year repayment with a Chapter 13 bankruptcy. Borrowers also need to be current on all credit cards and other loans to qualify. Exceptions may be made for those who have filed bankruptcy due to health problems.
Documents needed for FHA loans in New York include income verification that includes two years of tax returns and recent pay stubs, statements from bank savings and other financial instruments like 401K accounts, mutual funds, etc., recent credit card statements and/or utility bill payments and proof of rental payments along with the landlord’s contact information. Personal information, such as copy of drivers’ licenses, Social Security cards, and if applicable, green cards, divorce and alimony papers and similar documents may also be required.
FHA loans and Bankruptcy
Loans offered by the Federal Housing Administration make it possible for people who have limited options for home financing to become owners. As with any type of lending situation, there are specific qualifications that applicants must meet. If you can comply with those standards, there is an excellent chance that your application for an FHA loan will be approved.
What are the Basic Qualifications?
New York residents who want are looking into the potential of an FHA loan must be able to provide a minimum down payment in order for the application to be processed. The applicant must also have a credit rating that is within the current standards imposed by the FHA. Fortunately, those standards are somewhat more flexible than those required by other types of lenders, so your chances for being able to comply with the lender’s criteria is very good.
What if I’ve Been Through a Bankruptcy?
Bankruptcy does not automatically disqualify you from being eligible for an FHA loan. Assuming certain circumstances apply, it is still possible to be approved.
The type of bankruptcy action will have some influence on the lenders who will be willing to extend a loan through the FHA program. Be prepared to provide a couple of credit references that you have established since the bankruptcy. Those accounts must be up to date at the time of the application. It is also important to note that some lenders will require that a certain amount of time has passed since the bankruptcy action began or since it was settled in full.
How Much Can I Borrow?
The amount of the FHA loan will depend on your income level. The process involves calculating the percentage of your monthly gross income that is dedicated to housing costs each month. Current FHA loan standards require that the percentage be under a certain amount in order to qualify for the program.
Contact us to see if you qualify for an FHA Mortgage. Email us or call us at (800)842-2910.