If you want to purchase a home with a low down payment and easy qualification standards in Cape Coral or elsewhere in Florida, an FHA mortgage is your ticket to making it happen.
What is an FHA Mortgage?
An FHA mortgage is insured by the Federal Housing Administration (FHA). By insuring your loan, the FHA helps you to apply successfully for a competitive loan even if your credit score is not perfect.
3.5% Down and Other Great Benefits of FHA Mortgages in FL
If you are eligible for an FHA loan in Florida, these are the benefits which await you:
- FHA mortgages are some of the most competitive types of loans when it comes to keeping down payments as affordable as possible. You might be able to purchase a home putting only 3.5% down with an FHA loan.
- Your closing costs, like your down payment can be affordable with an FHA loan. The seller may pay up to the entirety of your closing costs with this type of loan.
- Qualification requirements for FHA mortgages are not as strict as they are for conventional loans featuring similar rates and terms. So, if you are worried about an imperfect credit score or DTI ratio holding you back, this might be the ideal product for you.
- FHA mortgages are available with fixed or adjustable interest rates as per your needs.
- With an FHA mortgage, you can buy a home, refinance one, repair one or build one.
How Do You Qualify for an FHA Home Loan in Florida?
You will need to meet these basic requirements to qualify for an FHA mortgage in Florida:
- To qualify to put 10% down on a home with an FHA loan, your credit score needs to be no lower than 500. To qualify to buy a home with just 3.5% down, you need a credit score of 580 or higher.
- Your debt-to-income ratio should be no higher than 57% to qualify for this type of mortgage (a looser requirement than the more typical 43% for other types of mortgages).
- Just as you would if you were applying for another type of loan, you need to document two years of steady employment in one line of work or industry.
- You may only apply for an FHA mortgage to buy or build a primary residence, not a second home.
- You must not be delinquent on student loans or money owed to the SBA, DOJ, HUD, or any federal agency.
- Outside of certain qualifying circumstances, you can normally only have a single FHA loan at a time.
- You may successfully apply for an FHA loan in Florida whether you are a first-time homebuyer or not.
- Neither bankruptcy nor foreclosure will stop you from qualifying after the required waiting period (two years for bankruptcy, three years for foreclosure).
- The home you want to buy must pass an FHA inspection for you to buy it with a regular FHA mortgage. If, however, it does not, an FHA 203k loan may meet your needs.
