First time home buyer, FHA loan or other Mortgage lenders?

Posted on Oct 3, 2012 in FHA Information

Question by David: Do they verify income for HARP refinance?
Under the new HARP rules, erectile ambulance I qualify and have been current on my mortgage. But my income is typically lower than what most banks would typically qualify for a mortgage. In other words a high debt-to-income ratio.

Best answer:

Answer by Darren
Generally no. A bank may ask for that information in an application but your ability to repay is judged based on the payment history, If you have been on time in the last 12 months, Fannie Mae and Freddy Mac consider you able to repay.

The exception is if your monthly payment were to increase by 20% then you would need a 45% or less debt to income ratio.

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Question by Sunshine: First time home buyer, patient FHA loan or other Mortgage lenders?
Looking at buying a house soon (hopefully) but I’m wondering if I should look at getting a FHA loan? Looks like a better deal as far as getting into a house but if I get pre-approved for a FHA loan do I have to buy a HUD home or FHA approved home? How does that work? My credit is around 714 and I will have about $ 3000-5000 to put down and pay closing by the end of september if that helps.

Best answer:

Answer by Mom
FHA with low down payment can be used for any home. You will pay a monthly PMI payment that does not go toward principle, order escrow or interest.
Conventional is 20% down. If you have no problem flushing 100 or 200 a month down the toilet then go FHA

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One Comment

  1. Please ignore the poster by the name of MOM, she consistantly posts incorrect mortgage information and will eventually get sued for doing so without a license.

    Yes, you can do an FHA mortgage; no it does not have to be a HUD home. FHA requires 3.5% down, but with your credit rating you may want to consider a conventional mortgage. You can get a conventional mortgage with 5% down, you don’t need 20% as “Mom” states. A conventional mortgage is usually the better option if you qualify as the PMI is lower. FHA mortgage have “MIP” not PMI and there is a difference. The FHA MIP is more expensive, has to stay there for at least 5 years and also has an additional 1% up front fee.

    Have a qualified loan officer show you both programs side by side and please don’t take advice from unlicensed people, they can steer you in the wrong direction and cost you money.