FHA LOANS IN FLORIDA

FHA loans in Florida are offered to low and moderate income residents. This is a mortgage issued by an FHA approved lender who is insured by the federal housing administration. They are the choice of a big number of people because they require a low minimum down payment and if the credit score is not so high then it is not a problem because it can be as low as 580. Many conventional loans have higher requirements. 



With a credit score of 580, a borrower can enjoy a loan with a down payment of 3.5 percent. However, it is worth noting that this numbers vary because different lenders have their own requirements for FHA loans and do not have to follow the requirements set for FHA loans after all it’s their own money they are trading and risking with so no offence in doing so. Many lenders do not accept credit scores of less than 620, but others can go as low as 500. However, the lower the credit score, the higher the down payment so as to cover up for the required amount and boost the confidence of the lender. 500 score is awarded a 10 percent down payment.

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The disadvantage with loans with borrowers having less than 580 credit score are difficult and in many instances never get to close. It is therefore advisable for one to work on the score before doing the application. This is achievable by following instructions; pay your bills in time, do not make a new credit application and also pay all balances from previous card balances. Credit enquiries and new accounts cater for 10 percent of your total FICO credit score.  It is always important to know that your score is not more important than what you have on your credit. It is surprisingly true that one with a score of 580 may qualify and another one with 620 score is denied.

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It is more important for the lender to ascertain why your credit score is low than the score itself. The score rises or falls due to several factors. The good thing is that it can be played with before the application to make it more pleasant to their eyes and win their confidence.

FHA CREDIT GUIDELINES FOR 2019

  • In the past 12 months, there should be no mortgage late payments.

  • In the past 12 months, there should be one or no late payment.

  • Unpaid collection accounts should not exist.

  • Limited collection accounts.

It is possible to get an FHA mortgage loan which is insured with no history or credit score. It has been the tradition of many lenders that they would require two lines of credit at least. But borrowers without credit score can still qualify by use of non-traditional credit lines such as insurance payments, cell phone bills and evidence of loan payment. Getting an FHA loan after bankruptcy, short sale or foreclosure is possible but this has to two years after discharge of chapter 13 or chapter 7 bankruptcy. 

FLORIDA HOME EQUITY LOANS


LOAN TYPE BANKRUPTCY WAITING PERIOD

  • FHA loan- chapter  7, 24 months and chapter 13, 12 months

  • USDA loan- chapter 7, 36 months and chapter 13, 12 months

  • VA loan- chapter 7, 24 months, and chapter 13, 12 months.

  • Conventional loan- after discharge date for chapter 13 and 7- 2 years.

For FHA loans, borrowers with foreclosures must wait for up to 3 years so as to qualify. 


WAITING PERIOD FOR SHORT SALE OR FORECLOSURE BY LOAN TYPE

  • FHA loan- 36 months.

  • Conventional loan- 7 years.

  • VA loan- 24 months

  • USDA loan- 36 months.


 FHA back-to-work program enables borrowers to qualify for FHA loan after a foreclosure or bankruptcy. Being terminated from work, medical reasons or income reduction that causes a 25 percent decrease in household income are the reasons determining if one would be accepted in the program.

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ALL LOAN TYPES MINIMUM CREDIT SCORE

  • FHA loans- credit score of 500 with 10 percent down or 580 credit score with 3.5 percent down.

  • USDA loans credit score of 640

  • Conventional loans- credit score of 620

  • VA loans- some lenders can accept 500 but many of them need 620 credit score.

  • 203k loans- credit score of 640 

  • Conventional 97 loan- credit score of 680

The reason why the FHA loans are increasing in popularity among first-time home buyers is due to low savings and lower credit scores. 

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ADVANTAGES OF FHA LOANS

  • Requires low credit score.

  • Low interest rates

  • 3.5 percent down payment.

  • Easier to qualify

  • Fixed and adjustable rate loan options.

  • Guidelines on high debt-to-income ratio. 


DISADVANTAGES OF FHA LOANS

  • Insurance for the mortgage is required.

  • Low loan limits.

  • High MIP fees.

Conventional loans do not demand for mortgage insurance but FHA loans go together with insurance regardless of how much was given as a down payment. Mortgage insurance is affected by down payment and there are two kinds of mortgage insurance. These are mortgage insurance premium and up-front MIP (this one requires 1.75 percent as fee)

When applying for this loan, one should make an effort to get as many quotes as possible from different lenders for comparison purposes. Credit history is very important too. Do everything to make it look good beforehand. Most lenders consider the recent credit rather than the old accounts.

Conventional Loan Requirements in Florida