Placentia FHA Loan FAQ
What is an FHA Loan? An FHA loan is a real estate mortgage. The mortgage is insured by FHA, but it is the lenders who actually process, underwrite, and fund the loan. Lenders must underwrite to FHA guidelines and standards if the loan is to be insurable.
Do I have to live in home I purchase? Yes. The FHA requires that live in the home you purchase as your primary residence. FHA is not for investment property loans.
Is getting an FHA loan difficult? Several years ago the process if getting an FHA loan was more complicated than conventional financing. However, there have been many changes over the past few years that have streamlined the process. At the same time, there have been many changes to conventional financing that have made it more difficult. It is now no more difficult to get an FHA loan than a Conventional loan.
Is FHA only for First Time Buyers? No. FHA is available for move up buyers as well. Placentia move up buyers are taking advantage of FHA.
What is the minumum Down Payment Requirement? FHA requires 3.5% down payment. The down payment can be a gift or even come from a 401K.
Can I have a co-signer help me qualify for an FHA loan? Yes. This is a big advantage for FHA loans. The co-signer needs to be a relative, but does not need to live in the property.
What Types of properties are eligible for FHA financing? 1, 2, 3 and 4 unit properties are all eligible, as long as you will live in at least one of the units. Also, approved condo projects are eligible, as are PUD’s (Planned Unit Developments).
How much can I borrower? In Placentia, the FHA loan limits is $729,750. FHA loan limits are vary from county to county. Orange County and Los Angeles County have a limit of $729,750. Riverside and San Bernardino are limited to $417,000. In Placentia, FHA loans over $417,000 are considered “high balance”. Home buyers have been taking advantage of the Placentia High Balance FHA loan limits.
What is the first step in seeing if I qualify for an FHA loan? The first step is to contact a local, Placentia FHA lender, who will be able to discuss your loan options and prepare customized loan scenarios based on your qualifications. The next step is to get PreApproved for your FHA loan, which is a quick and easy process.
How long does the process take? An FHA loan can be closed in 30 days. The initial loan application is typically done during the PreApproval stage before you’ve even found a home, which will help to ensure a smooth process. It is important for Placentia homebuyers to understand the FHA process before beginning escrow.
What items are needed for PreApproval? Generally, you will need to provide 2 years tax returns (all schedules), 2 years W2’s, paystubs for the most recent 30 days, bank statements for the most recent 2 months (all pages), and clear copies of your drivers license and social security cards. Self employed borrowers will also need to provide 1099’s, a year to date Profit and Loss, and 2 years corporate or partnership tax returns.
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