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Monday 10 February 2014

Information You Will Need When Applying For California FHA Home Loans

By Jayne Rutledge


If you are a California resident with family you can apply for California FHA home loans, allowing you to buy your own home. Your income is one of the criteria used to determine your eligibility and the amount of money you can borrow. The income amount required to qualify can differ from one county to another and it is advisable to check if you meet the required level before you start your loan application to avoid disappointment.

Credit scoring is used to help determine the borrowers eligibility and is calculated using their income and payments over the previous one to two year period. The FICO method of credit scoring is used, with an acceptable score for an FHA home loan being between 580 and 620. However, it should be noted that many of the larger mortgage companies will require applicants to score 740 or over. Borrowers with less than the required score will find it difficult to obtain a loan from a reliable source.

When you submit your loan application you need to be in a position to provide verification of your income over the previous two years. You should also be prepared for the lender to check into your debts and payment schedule over the previous year. Late payments or defaults on any other debts you have had within the previous year are likely to adversely affect your application.

Your source of income does not necessarily have to be from employment. Providing your income meets the level required and is regular and ongoing, for example a pension or trust fund, you may still be eligible for an FHA loan. You should always discuss your eligibility with a certified loan adviser before starting the application process.

The value of your chosen property must not exceed the income level set by the county if you are applying for a loan in California. In addition the mortgage payment each month should be less than thirty percent of your gross monthly income. As the income level varies from one county to another in California it is important to check your county limits before applying.

Anyone with a regular income that can meet the criteria for a home loan should have no problem getting one. Even if they have previously been declared bankrupt, they can apply two years after they have cleared all their debts. Providing the borrower meets the criteria they can apply.

The application process is fairly straightforward. The application form requesting all the relevant income and financial details can be completed and submitted online. A loan officer will contact you to confirm the details on your application. He or she will liaise with lenders; deal with the administration and processing of your loan offer.

The loan officer will discuss the terms and conditions of the California FHA home loans that are available. They will confirm the amount that can be borrowed, the repayment terms and any other associated costs. Once the borrowers decides to proceed the loan officer will ensure that the underwriter reviews the loan and issues the closing statement.




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