There are many types of home loans and each one has its own set of requirements. Reach out to your lender for the detailed list of requirements and which loans might work for your family. In the meantime, here are the basics to get you started.
FHA Loan Requirements
These mortgages, backed by the Federal Housing Administration, have the easiest qualification process. The FHA insures the mortgage, so approved lenders can typically give borrowers advantageous rates. Because of this, lenders are willing to give risky borrowers a chance thanks to the 90 percent loan coverage rate by the FHA. This is a great option for first-time buyers.
VA Loan Requirements
Mortgages obtained through Veterans Affairs (VA) help active-duty military personnel, veterans and reservists. The VA guarantees a portion of the loan so that lenders give more favorable terms to military personnel. A certificate of eligibility serves as proof of your qualification for a VA mortgage by simply verifying your military service. Specific ID and documents are required, but you can apply online, by mail or through a lender which make this a favorable option.
USDA-Guaranteed Loan Requirements
The USDA has a loan guarantee program that backs 90 percent of the loan amount for eligible homes, which are usually modest houses in rural areas or approved suburban areas. USDA mortgage loans require a decent credit score of 640 to get automatic approval. Homebuyers with lower scores may be eligible for a manually underwritten loan.
Credit Matters
Your credit history is very important to lenders, no matter what type of mortgage you qualify for. It may take additional finagling to get home loan applications with bad credit barrowers approved. However, if you can improve your payment history and pay down at least some of your debt, you’ll have a much better chance of obtaining a mortgage you can afford. Your Mortgage Investors Group agent will be happy to help you understand the different loans that you may qualify for.