Are you thinking of shifting to your own house because the rent is increasing, the neighborhood is not safe, you need more space, or the amenities and facilities around your home is not quite right? Well, all these reasons are quite true and justified for wanting to buy a new house of your own. So, have you got the requisite funds one needs to finance their house? It is extremely important to have the finances ready because the prices of real estate is constantly rising and that sort of huge amount for the house is not going to be easy to achieve. Nobody wants to spend all their earnings on a house and it is certainly not wise because if there is an emergency you will not have the cash ready as it will already be invested.
Then, what should you do? There are some easy and smart solutions. Opt for the home mortgage programs and get yourself a house as early as possible. You can repay the loan with low interests every month. All you have to do is put down a certain amount as down payment according to the requirement for the type of home loan you are buying. If you are not sure about the sort of first time home buyer loans you must avail, you can always resort to the real estate lending sites which can provide you with effective guidance in this regard. One of the best solutions would be the FHA loans. Along with the dos, you should also keep the don’ts in mind while applying for these kinds of loan options. Here, we have put together a few things which might go wrong with your FHA loan application. Take a look.
1. Lack of Right Credit Scores
Although the FHA loans are quite flexible with the credit score requirement, you might face an issue with this. When it comes to the FHA loans for bad credit, you must have a credit score of 530 if you are willing to pay a down payment of 10%. And if you want to pay a little lesser amount of down payment, then you should have a credit score of 580 or more. There are provisions for people with a credit score less than 500 as well. But despites such great facilities that this loan program offers, your credit score might fall short. Therefore, try to keep your debt to income ratio high, avoid making purchases on credit, and always pay outstanding debts at the earliest. This will keep your credit record better.
2. Wrong Source of Down Payment
Being a home loan aspirant, there are certain things that you should know. To begin with, regardless of the amount you are borrowing, you must pay a certain share of down payment. But with certain kinds of home loans, you have to be prepared to face restrictions on the source of down payment. You must realize that if the source is wrong, then the loan might not be approved. With FHA loans, you can get a little flexibility because these allow your savings, a gift from family or friends, or even the government grants. But if you have any other source for the down payment, it might not be accepted. Discuss the matter with a senior loan office before taking a step ahead.
So, without any delay, now that you know about the things you have to be cautious about, start looking for a good home loans for high debt ratios.
Author Bio: Joan Gallardo, a senior loan officer, here writes on 2 things that could go wrong in your application for the FHA loans for bad credit. Read his blogs to know more about the home loans for high debt ratios.