| Can I exceed the ratio? |
You may qualify to exceed if you have:
- A large down payment
- A demonstrated ability to pay more toward you housing expenses
- Substantial cash reserves
- Net worth enough to repay the mortgage regardless of income
- Evidence of acceptable credit history or limited credit use
- Less-than-maximum mortgage terms
- Funds provided by an organization
- A decrease in monthly housing expenses
|
| How large a down payment do I need
with an FHA loan? |
| You must have a down payment of at
least 3% of the purchase price of the home. Most affordable loan programs
offered by private lenders require between a 3%- 5% down payment, with a
minimum of 3% coming directly from the borrower's own funds. |
| What can I use to pay the down
payment and closing costs of an FHA loan? |
| Besides your own funds, you may use
cash gifts or money from a private savings club. If you can do certain
repairs and improvements yourself, your labor may be used as part of a
down payment (called "sweat equity"). If you are doing a lease
purchase, paying extra rent to the seller may also be considered the same
as accumulating cash. |
| How does my credit history impact
my ability to qualify? |
The FHA is generally more flexible than
conventional lenders in its qualifying guidelines. In fact, the FHA allows
you to re-establish credit if:
- two years have passed since a bankruptcy has been discharged all
judgments have been paid
- any outstanding tax liens have been satisfied or appropriate
arrangements have been made to establish a repayment plan with the IRS
or state Department of Revenue three years have passed since a
foreclosure or a deed-in-lieu has been resolved.
|
| Can I qualify for an FHA loan
without a credit history? |
| Yes. If you prefer to pay debts in cash
or are too young to have established credit, there are other ways to prove
your eligibility. Talk to your lender for details. |
