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FHA Guidelines: Mortgage, Inspection, Underwriting And Appraisals
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Published: March 19, 2007
Buying a new home can be one of the most important events of a lifetime. It's often hard for first time buyers or people with less than great credit to buy a house of their own. That's why the Federal Housing Administration established affordable home loans for just such an occasion. By using a Federal Housing Administration of FHA loan, thousands of potential home buyers get the help they need in order to succeed.
FHA loans are for everyone. Almost anyone can apply for the loans, although they are most often used to help first time buyers or ones with poor credit. Underwriters don't look at credit scores to determine if someone can use their loan. This helps a lot of people with lower than average credit. The mortgage guidelines for credit and past financial status are very clear about bankruptcy, though. If the borrower has had a bankruptcy within the last two years, they may not qualify for a loan.
The amount of money that someone can qualify for is based on their total income. Mortgage guidelines require that loans don't exceed 30% of the buyer's gross income. If several people are buying the house together, such as a married couple, both incomes will be taken into account. This helps ensure that the buyer will be able to pay off their FHA loan and afford the house that they're interested in buying.
FHA loans also require that the house in question receives an appraisal. Appraisals are standard in the home buying business and can help determine how much the house should be worth. Appraisal guidelines require appraisals to be completed before the buyer can qualify for the loan. Not only does this help determine the worth of the house, but it also makes sure that the buyer is getting a fair price.
Appraisal guidelines don't specify who should pay for the appraisal. Most often it's paid for by the buyer, but can sometimes be paid for by the seller as well. Make sure to use a certified appraiser for this job.
House inspections are similar to appraisals, except that inspections are much more thorough. Although much of the same things can be learned in an appraisal, inspections are required in order to qualify for a loan. Inspection guidelines state that the health and condition of a home must be studied.
Depending on the outcome of the inspection, a home seller may end up having to fix certain things in the home. Everything that is found to be unsafe must be fixed in order to pass the FHA inspection guidelines. Home inspectors look over the home thoroughly, from roof to foundation. They check how insulated the walls are and whether the water piping is safe. This is an important aspect of FHA loans because it can make or break the selling of the house.
Underwriting guidelines require that all aspects of the loan must be met before the prospective buyer can qualify. A FHA underwriter will work with the buyer to sort out all of the qualifications that must be met. Although there are a lot of underwriting guidelines, they are fairly simple and easy to qualify for. The mortgage, appraisal, and inspection guidelines all need to be met in order to receive the FHA loan.
The great thing about Federal Housing Administration loans is that they have fairly easy qualifying requirements. Even people with poor credit can use a loan. This helps even low income families to find a house to live in.
Sources:
FHA – Serving the Homeowner. FHA.com. 1997-2007. 16 Mar. 2007
<http://www.fha.com/fha_loans.cfm>.
Prequalify for an FHA Loan. FHA.com. 1997-2007. 16 Mar. 2007
<http://www.fha.com/prequalify.cfm>.
Tytler, Steve. “Home Inspection Guidelines are Simple.” HeraldNet. 7 Aug. 2005. The Daily Herald Co. 16 Mar. 2007.
<http://www.heraldnet.com/stories/05/08/07/10 0bus_tytler001.cfm>.
Weintraub, Elizabeth. “FHA Loans - FHA Loans Bounce Back in Favor.” About: Home Buying/Selling. 2007. About, Inc. 2007. 16 Mar. 2007
<http://homebuying.about.com/od/financingadvi ce/qt/FHALoansAreBack.htm?terms=fha+underwriting%2
FHA loans are for everyone. Almost anyone can apply for the loans, although they are most often used to help first time buyers or ones with poor credit. Underwriters don't look at credit scores to determine if someone can use their loan. This helps a lot of people with lower than average credit. The mortgage guidelines for credit and past financial status are very clear about bankruptcy, though. If the borrower has had a bankruptcy within the last two years, they may not qualify for a loan.
The amount of money that someone can qualify for is based on their total income. Mortgage guidelines require that loans don't exceed 30% of the buyer's gross income. If several people are buying the house together, such as a married couple, both incomes will be taken into account. This helps ensure that the buyer will be able to pay off their FHA loan and afford the house that they're interested in buying.
FHA loans also require that the house in question receives an appraisal. Appraisals are standard in the home buying business and can help determine how much the house should be worth. Appraisal guidelines require appraisals to be completed before the buyer can qualify for the loan. Not only does this help determine the worth of the house, but it also makes sure that the buyer is getting a fair price.
Appraisal guidelines don't specify who should pay for the appraisal. Most often it's paid for by the buyer, but can sometimes be paid for by the seller as well. Make sure to use a certified appraiser for this job.
House inspections are similar to appraisals, except that inspections are much more thorough. Although much of the same things can be learned in an appraisal, inspections are required in order to qualify for a loan. Inspection guidelines state that the health and condition of a home must be studied.
Depending on the outcome of the inspection, a home seller may end up having to fix certain things in the home. Everything that is found to be unsafe must be fixed in order to pass the FHA inspection guidelines. Home inspectors look over the home thoroughly, from roof to foundation. They check how insulated the walls are and whether the water piping is safe. This is an important aspect of FHA loans because it can make or break the selling of the house.
Underwriting guidelines require that all aspects of the loan must be met before the prospective buyer can qualify. A FHA underwriter will work with the buyer to sort out all of the qualifications that must be met. Although there are a lot of underwriting guidelines, they are fairly simple and easy to qualify for. The mortgage, appraisal, and inspection guidelines all need to be met in order to receive the FHA loan.
The great thing about Federal Housing Administration loans is that they have fairly easy qualifying requirements. Even people with poor credit can use a loan. This helps even low income families to find a house to live in.
Sources:
FHA – Serving the Homeowner. FHA.com. 1997-2007. 16 Mar. 2007
<http://www.fha.com/fha_loans.cfm>.
Prequalify for an FHA Loan. FHA.com. 1997-2007. 16 Mar. 2007
<http://www.fha.com/prequalify.cfm>.
Tytler, Steve. “Home Inspection Guidelines are Simple.” HeraldNet. 7 Aug. 2005. The Daily Herald Co. 16 Mar. 2007.
<http://www.heraldnet.com/stories/05/08/07/10 0bus_tytler001.cfm>.
Weintraub, Elizabeth. “FHA Loans - FHA Loans Bounce Back in Favor.” About: Home Buying/Selling. 2007. About, Inc. 2007. 16 Mar. 2007
<http://homebuying.about.com/od/financingadvi ce/qt/FHALoansAreBack.htm?terms=fha+underwriting%2
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