Securing an FHA Loan in Texas: A Step-by-Step Tips

If you're a first-time homebuyer in Texas, you may wonder how to get an FHA loan. FHA loans are popular among homebuyers because they have a lower credit score and down payment requirements than conventional loans.

However, the process of securing an FHA loan can be complex, and it's important to work with an experienced lender who can guide you through the process.

In this blog post, we'll provide a step-by-step guide on getting an FHA loan in Texas, including tips and best practices to ensure a successful loan application.

At Ebenezer Mortgage Solutions, we are committed to helping you achieve your homeownership goals and make the FHA loan process as smooth as possible.

How to apply for a Texas FHA loan

FHA loans are popular among home buyers because they have lower credit scores and down payment requirements than conventional loans.

However, the application process for an FHA mortgage loan can be complex and confusing, and it's important to understand the steps involved to ensure a successful loan application.

Whether you're a first-time homebuyer or a seasoned homeowner, we'll walk you through the process so you can confidently apply for your FHA loan. Here are the steps you need to follow to apply for an FHA loan in Texas.

Shop Several FHA-approved Lenders

Start by researching and comparing several FHA-approved lenders in Texas. This can help you find the best loan terms, interest rates, and fees that meet your needs.

Complete an FHA Loan Application

Once you've found a lender you like, you'll need to complete an FHA loan application. This will require you to provide personal and financial information, such as your name, Social Security number, employment history, and income.

Give the Lender Permission to Verify Your Credit Scores

Your lender will need to verify your credit scores to determine if you meet the minimum credit score requirements for an FHA loan. You'll need to give your lender permission to pull your credit reports from the three major credit bureaus.

Provide Two Years of Employment and Income History

You'll need to provide your lender with at least two years of employment and income history, including W-2s and tax returns, to demonstrate your ability to repay the loan.

Document Your Down Payment Source

You'll need to provide documentation to show where your down payment is coming from, whether it's from savings, a gift, or a grant.

Explain and Document Any Defaulted Federal Debt

If you have any defaulted federal debt, such as student loans or taxes owed, you'll need to explain the situation to your lender and provide documentation on the resolution of the debt.

By following these steps, you can apply for a Texas FHA loan with confidence and increase your chances of approval.

how-to-get-a-fha-loan-in-texas-inner-image

What is the FHA Loan?

A mortgage insured by the Federal Housing Administration (FHA) is known as an FHA loan. The FHA is a government agency that follows lending rules set by the U.S. Department of Housing and Urban Development (HUD).

When you take out an FHA loan, you'll need to pay for two types of mortgage insurance. This insurance protects your FHA-approved lender against losses if you stop making mortgage payments. By requiring mortgage insurance, the FHA enables lenders to offer more favorable loan terms to borrowers who might not qualify for conventional loans.

To obtain an FHA loan, it's not a requirement to be a first-time homebuyer, but you must intend to use the property as your primary residence for at least one year. Unlike some first-time homebuyer programs, there are no income limits when it comes to FHA loans. This is an attractive option for higher-income earners who might not qualify for conventional loans due to a minimum credit score requirement of 620.

By offering more lenient credit score requirements, the FHA makes it easier for a broader range of borrowers to purchase a home.
FHA loans are often an attractive option for homebuyers due to the following highlights:

These benefits make FHA loans a popular choice for homebuyers who might not meet the strict requirements for conventional mortgage loans. By providing more flexible loan terms, the FHA can help more people achieve their dream of homeownership.

FHA Loan Requirements in Texas

These are the basic FHA home loan requirements for this year. All of these must be met to be approved for an FHA loan.

If you are not positive about whether you meet these standards or have questions, a Texas FHA lender can help.

Contact Ebenezer Mortgage Solutions to Know How to Get a FHA Loan in Texas

If you're looking to buy a home in Texas, FHA loans can be an excellent option to help make your dream of homeownership a reality.

At Ebenezer Mortgage Solutions, we understand that the home-buying process can be daunting, but our team of experts is here to guide you.

As an FHA-approved lender, we specialize in helping borrowers secure FHA loans with flexible credit score requirements, low down payment options, and attractive interest rates.

Our experienced mortgage brokers can provide all the information you need about applying for an FHA loan in Texas, including the specific documentation and requirements needed to qualify.

Whether you're a first-time homebuyer or a seasoned homeowner, we're here to provide personalized assistance to help you navigate the application process and answer any questions.

We take pride in our commitment to making the home-buying process as seamless and stress-free as possible for our clients.

If you're ready to take the first step towards homeownership in Texas, don't hesitate to contact Ebenezer Mortgage Solutions today at (813) 284-4027.

Our team of professionals is here to help you every step of the way.

3 Questions to Ask Yourself Before Choosing an FHA Loan

 

Choosing an FHA Loan

 

So you're a first-time homebuyer who's considering applying for an FHA loan. You know some of the benefits, but the real question is: “Is FHA the right home loan for me?”

 

So to help you decide whether an FHA loan is the right mortgage for you, here are three questions that you need to ask yourself.

 

1. Is your credit score lower than 620? 

 

A conventional mortgage requires a credit score of at least 620. If your score is below that, you can use an FHA loan to purchase your home and then refinance to a conventional loan once you meet the requirements needed. The credit score required for an FHA loan can be as low as 500, giving you options when your credit is less than ideal.

 

If your score is above 620, then a conventional loan may be a better choice. The higher your credit score is, the lower your interest rate might become.

 

2. Do you have a rough credit history? 

 

Do you have late payments or errors on your credit history within the past 12 months, or did you file for a Chapter 7 bankruptcy within the last four years?

 

If yes, then an FHA loan might be what you need. You are eligible for an FHA loan two years after declaring bankruptcy, assuming that you have improved your credit score and did not acquire additional debts within those two years.

 

If you don't have any of these credit issues, then a conventional loan may be better for you.

 

3. Is your debt-to-income ratio higher than 43%?

 

If so, then an FHA loan is a great option. FHA loans allow for more flexibility with up to 50% DTI ratio.

 

If not, then a conventional loan may better serve your needs.

 

Depending on your situation and financial needs, an FHA loan might be the right choice for you. But keep in mind that it's not the only option there is.

 

Ready to buy your first home?

A mortgage broker can help you understand and give you access to multiple loan programs that will suit you best. Speak with a mortgage broker by calling Ebenezer Mortgage Solutions today at (813) 284 - 4027.

 

How to Apply for a Mortgage: 4 Steps Every First-time Homebuyer Should Know

Applying for a mortgage can be daunting, especially if it's your first time. There are many components that you need to consider, including how much you can afford, what type of loan you can get, and how to actually go about applying for the mortgage. This blog will walk you through the steps in applying for a mortgage and help you get started.

 

1. Check Your Credit

 

First-time homebuyers often avoid checking their credit out of fear. No one wants to know how much money they owe or whether or not they'd be considered a good financial risk. But even though it's not fun to look at your credit report, it's important to understand what's in there.

 

There are resources that can help you check your credit. One of these is AnnualCreditReport.com, where you can get a free copy of your credit report from each of the three credit reporting agencies once every 12 months.

 

Once you have your credit report, you'll want to check it for errors such as outdated or fraudulent information. If you find an error, immediately dispute it with the credit bureau that made the report.

 

Another thing that you need to check is your credit score. A credit score might be the most important number you should know because it can significantly affect your mortgage options. Generally, lenders would approve someone with at least a 620 credit score.

 

There are also options for those who have lower scores. But if you want to have better opportunities available to you, you might want to check out these tips on how to improve it.

 

2. Prepare Documents for Application

 

Once you have your credit health in shape, it's time to start preparing the documents you'll need.

 

When applying for a mortgage, you'll need to submit several documents. Some of them will be required, while others may be needed only on a case-by-case basis. Still, it's a good idea to have all of the documents you can on hand to avoid unnecessary delays in the approval process. Here are some of the documents you'll need for your mortgage application:

  • Proof of Income from the past 2 years (e.g., pay stubs, W-2)
  • Bank statements and other assets
  • Tax returns
  • Gift letter, if applicable
  • Credit history

 

3. Get Pre-approved

 

Before you can go shopping for a home, you'll need to get pre-approved. Pre-approval happens when a bank or lender gives you a letter stating that they've reviewed your financial information and you're likely to be approved for a certain amount of money.

 

The pre-approval process can be time-consuming and tedious, but it will give you a good idea of how much of a mortgage you can afford and what you can buy. You can even use that amount as leverage when making an offer.

 

4. Work With a Mortgage Broker

 

Mortgage brokers are an essential part of the homebuying process, but first-time homebuyers often overlook them.

 

A mortgage broker can offer several advantages to a homebuyer when it comes to the application process. Here are some of the things a mortgage broker can do for you:

  • Works with multiple lenders and has better access to different loan offers
  • Help you get the best mortgage for your situation
  • Can get your paperwork in order
  • Eases communication between lenders and borrowers
  • Saves you time, effort, and money
  • Can take care of the entire mortgage application process, from start to finish

 

In today's competitive real estate market, it's crucial to have a mortgage broker on your side who can help you get the home you want.

 

Let us help you!

 

At Ebenezer Mortgage Solutions, we'll be happy to guide you step-by-step through the mortgage application process and answer any questions you may have along the way. Call us today at (813) 284 - 4027.

 

4 Questions to Ask Yourself Before Buying Your First Home

Buying your first home is a major step in your life. You may have been dreaming about this moment for many years. So, when the time finally comes, you are probably anxious to get it done.

 

However, emotions associated with purchasing a house can be very overwhelming. As a result, people tend to go overboard and make bad decisions because of the excitement. So to help you know what to expect and make a sound decision, here are four important questions you need to ask yourself before buying your first home.

 

1. Can I afford it? 

 

Buying your first home is one of the biggest decisions you'll ever make and might impact your finances for some time.

 

Many factors come into play when buying a house. This includes income, interest rates, and the type of mortgage you get. Unfortunately, although you can opt for a fixed interest rate, your income, the economy, and other circumstances might change. So even if you can afford a more expensive house today, it might not be the same in the future.

 

So how can you know how much house you can afford?

 

One rule of thumb is the 28/36 rule. This rule states that your total housing expenses should not exceed 28% of your gross monthly income. And your total debt should not be more than 36% of your gross monthly income.

 

Knowing and sticking to these numbers would not only let you know how much house you can afford. It also ensures that you have enough for monthly repayments and other expenses such as tuition, medical, or entertainment.

 

2. How long am I staying? 

 

Another factor you need to consider when buying a house is the time you'll spend living in it. Generally, it'll take five to seven years to break even on the cost of owning and purchasing a home. So if you're not planning to stay long-term in a house, you might want to reconsider your choices.

 

3. Does it have the amenities and features I want?

 

A house is not a home if it's a place where you don't feel safe and comfortable. So when buying a home, make sure that it's a place you actually like. Some of the features and amenities most homebuyers consider include:

  • Location - Is it close to schools, parks, or shopping centers? How far is it from your workplace? Is it close to traffic or other noise? How near is the neighbor's house to your window? Does it have a view? Consider the location of your home very carefully. Once you buy your home, you can change your house, but not your location.
  • Neighborhood - Is the neighborhood safe for you or your kids to walk and play around? Do people keep their yards clean and tidy? Are the houses being built up, or are they rundown?
  • Size and Layout - Consider the size and layout of your home. Is the kitchen big enough for you to move around? Is there enough space for your furniture? Does it suit your lifestyle?
  • Bedrooms and Bathrooms -  If you have a big family or plan to grow your family in the future, you would want to consider the number of bedrooms and baths. Make sure that everyone can have their own space and privacy.
  • Maintenance - Having a broken HVAC is not only harmful to your health but also your pockets. So ensure that the air conditioning, heating, and plumbing systems are working well. If not, will you be able to afford to have it fixed?

 

4. Am I prepared for the out-of-pocket expenses?

 

Down payment is not the only price you'll pay when buying a home. There are other out-of-pocket expenses that you have to prepare for. These out-of-pocket expenses are usually 2-5% of the purchase price. They include the application fee, homeowner's insurance, property tax, and more. Additionally, you might also need to prepare some cash for a home inspection.

 

Do you need more help?

 

Homebuying is a huge investment. So make sure to consider all these questions before deciding on purchasing your first home. To know more about what's in play when buying a house, you can ask the mortgage broker at Ebenezer Mortgage Solutions. Schedule an appointment by calling (813) 284 - 4027 today.

 

New FHA Home Loan Requirements 2021

An FHA loan is one of the best options for homebuyers with limited funds and imperfect credit scores. Although this loan program is more achievable for most, there are certain conditions that borrowers should prepare to meet. In this article, we're going into detail about the FHA loan requirements in 2021.

What Are FHA Home Loans?

FHA home loans are government-backed mortgages insured by the Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD). These loans have more flexible requirements, making it easier for first-time homebuyers and those who do not meet conventional loan requirements to qualify.

 

FHA and HUD are not the ones who issue the loans. They simply guarantee payments if the borrower defaults on the loan. These agencies make it less risky for lenders, allowing FHA loans to be more versatile than other loan programs.

 

FHA loans have two loan term options: 15 and 30 years. A borrower can use these loans to purchase single or multiple-family homes. Additionally, the downpayment you need for an FHA loan is either 3.5% or 10%, depending on your FICO credit score.

COVID Changes

Although the FHA has lenient standards for the loan, the lenders have the freedom to change these standards to make it less risky for them.

 

For example, FHA loans allow credit scores as low as 500, but most lenders now require minimum credit scores of 640. Before, you could purchase a home with a job offer even if you were not working there yet. But due to the pandemic, most lenders now want to see proof that you are currently employed or have an ongoing source of income.

 

The FHA market has become more competitive now than before. And because of this, we recommend that homebuyers shop around to get the best deal. At Ebenezer Mortgage Solutions, you don't have to go to each lender one-by-one—we can do that for you.

FHA Loan Requirements 2021

 

Down Payment and Credit Score

 

The down payment that you'll be giving in an FHA loan depends significantly on your credit score. With a lower credit score, you will be required to make a down payment of 10% of the purchase price. If your credit score is higher than 600, you may be able to make a down payment of 3.5%.

 

Debt-to-Income Ratio

The debt-to-income (DTI) ratio is one of the determining factors for the approval of your loan application. It measures the amount of your monthly debt expenses against your monthly gross income. A lower DTI means that you have enough income to pay your monthly debt, making you more attractive to lenders.

 

For the FHA loan, the maximum front-end DTI, which only includes the mortgage payments, is 31%. While the back-end DTI, which consists of all debt payments, is 43%.

 

Loan Limits

 

Due to changes in home prices, the FHA loan limit varies each year. As of 2021, the FHA loan limit for a single-family home is $356,362 for low-cost areas and $822,375 for high-cost areas.

 

Mortgage Insurance Premium

 

FHA loans have lenient requirements, making it easier for borrowers to get into homeownership. But it is because of this leniency that lenders want to protect themselves more against defaults. They do this in the form of mortgage insurance premiums (MIP).

 

As an FHA loan borrower, you'll have to pay for both upfront and annual MIP. Upfront MIP (UFMIP) is 1.75% of your loan amount. You are not going to pay for this amount upon closing. UFMIP will be wrapped into your loan. For example, if you have a $400k loan, with a UFMIP, this will increase to $407k. The annual MIP will be .85% of the loan amount but can range from .45% to 1.05%, depending on your down payment and loan terms.

 

Unlike Conventional loans' private mortgage insurance (PMI), MPI will not automatically fall off at 20% down payment or 80% equity. It's required by lenders regardless of the amount of your down payment. MPI will remain for the whole life of the loan or for 11 years if you pay 10% or more down payment.

 

Employment

 

Although there is no minimum or maximum salary requirement for an FHA loan, the borrower must have a 2-year history of a stable income.

 

Property Requirements

 

Other than borrower qualification, the property you want must meet certain requirements before you qualify for an FHA mortgage. First, it cannot be an investment property; it must be your principal residence for at least a year. After living there for a year, you can then sell it or rent it out if you want to.

 

The property must also pass FHA's minimum property standard and HUD-approved inspection. And according to the Property Flip Rule, you can't purchase a property if the seller owned it for less than 90 days.

 

What If You Don't Meet FHA Requirements?

If you don't meet the FHA requirements right now, you might want to consider doing the following:

  • Pay your bills and credit cards on time, as this will help improve your credit score.
  • Lower your DTI ratio by paying off some of your debts. Also, remember to check your credit report for errors.
  • Increase your cash reserves. Although this might be easier said than done, especially now due to the pandemic, you can start by spending less than you can afford.
  • As mentioned above, shop around for lenders. The FHA market is competitive, and lenders have different approaches to their loan requirements.

 

Need help in applying for an FHA loan or looking for suitable lenders?

 

Ebenezer Mortgage Solutions can help you. With our extensive network of lenders and experience in the mortgage industry, we can make the home buying process easier for you.

 

Call our mortgage broker today at (813) 284-4027, and let's start getting you into the home of your dreams.

FHA Loan for Homebuyers and How Does it Works

FHA loan is a government-backed mortgage program that is targeted to low to moderate-income borrowers. The homebuying process might be difficult and confusing, especially for most first-time homebuyers. But whether you are still choosing a mortgage program or if you're already set on buying your new home through an FHA loan, this guide is for you. It will help you understand how an FHA loan works and how you can apply for it.

FHA Loan Requirements

Before applying for any type of loan you must be sure that you’re eligible for the program. The eligibility criteria for FHA loans are the following:

  • Minimum 3.5% down payment
  • A credit score of at least 500
  • 10% down payment if your credit score is less than 580
  • DTI of 50% or lower
  • Loan limit of $331, 760 (As of 2020)
  • Only primary residence properties are allowed

Documentations Needed for FHA Loans

Once you’re certain that an FHA loan is for you, start gathering the necessary papers. Most lenders will ask for these documents:

  • Pay stubs for the last two months
  • Tax returns for the last two years
  • W-2 statements for the last two years
  • Bank statements for the last two months
  • Proof of employment for the same employer for at least two years

Any other documents applicable in your case will be requested by the lender separately.

How to Apply for FHA Loan

  1. Get Prequalified. It is advisable to get prequalified for a loan first. It will let you know how much you can borrow and what interest rates you’re eligible for.
  2. Get Preapproved. Once you’re done with the prequalification process and choose the lender with the best loan terms, you can apply for a loan preapproval. Make sure your credit score is in a good state. During a preapproval, the lender verifies all your personal and financial information. Not like in prequalification where you will receive just an estimate based on the information you've provided.
  3. Shop For a House. Then, you can contact a real estate agent and start shopping for a house. Take your time with this step. The more houses you see and the more sellers you contact, the better.
  4. Get the House Assessed. Once you find your dream home, it must undergo a professional appraisal and home inspection. This will help your lender decide whether they should lend you the money to buy it.
  5. Close the Deal. The last step before moving in is closing the deal. Keep in mind that FHA loans allow your seller to pay for the closing costs. You can try discussing this with them beforehand when you make the offer. Then, you can sign the papers, receive the keys, and the house is all yours.

Are you looking for an FHA mortgage?

Now that you know a little more about FHA loans, the next thing to consider is where to find the best lender or the best mortgage deal. Our mortgage brokers can help you with that.

Call us at 813-284-4027 and let us do the hard parts of the homebuying process.