An FHA loan is a type of home loan that’s insured by the Federal Housing Administration (FHA). These types of loans are particularly popular with first-time homebuyers, as they only require a minimum down payment of 3.5 percent and a minimum credit score of 580. If you have little savings or a poor credit rating, using an FHA loan can help you secure a home regardless.
Just like other home loans, FHA loans are issued through mortgage lenders like banks or credit unions. Since the FHA insures the loan, it protects the lender, allowing them to offer more favorable loan terms. If you’re interested in getting an FHA loan, you’re probably wondering how to go about applying. Below, we’ll outline the basic steps you can use to get started.
Choose a Lender
The first thing you’ll want to do is start researching lenders when you’re going to apply for an FHA loan. There are many mortgage lenders out there, from big banks to local credit unions to online lenders. Some institutions are also easier to work with and apply to, which you may want to factor into your consideration when you apply for an FHA loan. For example, think about whether you prefer to work face-to-face or whether you’d primarily like to conduct things online.
Gather Basic Information When You Apply for an FHA Loan
The next step is to start gathering some basic information. This is the information about yourself that you’ll need to complete the loan application. By gathering the essential documents now, you’ll make the loan application process a lot easier and faster. Some common documents you’ll likely need include:
- Several years of tax returns
- Your employment W2 tax document
- Bank statements from the past few months
- Some recent paycheck stubs
- Employer information
- A profit and loss statement if you’re self-employed
- Investment and retirement account statements
In addition to these documents, the loan application will want some other basic information. For example, you’ll likely need a copy of your driver’s license or other state-approved ID, information about the property you intend to buy and your down payment amount. It may take some time to compile all this information and the related documents so start early, that way you have everything you need when it comes time to apply.
Complete the Loan Application
The next step is to complete your chosen lender’s loan application. Depending on the lender, this may involve completing the entire process online or talking with a loan officer in person or over the phone. Either way, the lender is typically available to answer any questions you may have about the application process. Use the information you gathered to complete the loan application then submit it to the lender.
If you plan on comparing different lenders, it’s a good idea to complete all loan applications within a 45-day window. That way, all of the credit check requests will show up as a single inquiry and won’t impact your credit score too much. Lenders issue a credit check before providing you with loan rate information but as long as you submit your loan applications around the same period, it shouldn’t impact your credit score.
Evaluate the Loan Estimate When You Apply for an FHA Loan
After you submit your information to the lender, you should receive a loan estimate shortly after that. Take the time to consider the loan offer carefully and ensure the terms are something you can comfortably afford. Signing an FHA loan is a big commitment and one you shouldn’t enter into lightly. Consider your financial situation now and also what you expect it to be in the future.
Sign the Loan
Once you find a loan that you’re comfortable with, it’s then time to sign the loan. Again, the lender will help you with the process. After you sign the loan, you’ll have the funds transferred to you and you can use them to buy your next home. Congratulations! You’re now one major step closer to moving into the home of your dreams.
Get an FHA Loan Today Through Rock Mortgage
If you’re looking for an FHA loan provider in the Houston area that makes things easy, look no further than Rock Mortgage. We offer some of the best rates around and require low down payments, making our loans ideal for first-time homebuyers or those who may not be approved for a more traditional loan. With our mortgage experts, you’ll get the home loan you need at an affordable rate in a short amount of time. To get started, simply contact us today and we’ll begin to walk you through the process.
How To Apply for an FHA Loan | Rock Mortgage — Houston, Texas