FHA Eligibility Calculator - Avoid Common Mistakes

home buying tips | mortgage help | how to refinance

What if an FHA eligibility calculator could accurately determine how much you could borrow? Just think of the time it would save.



Forget about mortgage pre-approval! Who would need it? But hold on there a second to consider this trusted adage!

"The doctor who treats himself has a fool for a patient."

It's difficult to be objective when it comes to your own mortgage qualification just like the self-diagnosing doctor who thought he needed brain surgery only to find out a new pair of glasses were indicated.

So do yourself a favor. Read the following article to find an alternative solution to self-diagnosing how much money you are qualified to borrow.

Special Alert -- The Worst Mistake To Determining FHA Maximum Loan

FHA mortgage loans are rising in popularity. Boasting low down payments and the security of fixed rates minus threatening prepayment penalties, FHA is a home buyer's dream loan.

You might not realize it but the Federal Housing Administration, doesn't offer mortgages directly to borrowers for buying a house or refinancing. But FHA does insure approved lenders against losses.

To this end, mortgage professionals approved to offer FHA home loans are backed by the Federal Housing Administration in the event borrowers default on monthly house payments.

Sidebar: A Common Misconception

A common misconception, FHA mortgage insurance does not insure homeowners against job loss, illness or other casualties. For that type of coverage, homeowners should consult an insurance professional.

Getting back to the original idea of an FHA eligibility calculator, let's discuss how lenders determine the maximum mortgage you are qualified to borrow. Several factors are taken into account.

FHA Eligibility Calculator: Housing-To-Income Ratio

The housing-to-income ratio is a simple calculation comparing your income before taxes to your monthly house payment, including property taxes and home owner's insurance. You will make the bank happy if you don't spend more than about 30% of your gross income on your mortgage payment.

FHA Eligibility Calculator: Debt-To-Income Ratio

The debt-to-income ratio accounts for your mortgage payment plus other non-housing expenses. Credit card and car payments, student loans and child support for example are added to monthly housing payments. FHA likes to see this second ratio equal to or less than approximately 40% of your gross monthly income.

FHA Eligibility Calculator: Down Payment And Credit

FHA places much importance on your ability to save a down payment along with the strength of your credit scores and established credit history.

FHA Eligibility Calculator: Exceptions To Guidelines

Now that you have learned a few pointers on eligibility, please do not make the common error of diagnosing yourself like the doctor who was sure he needed brain surgery when only a new pair of glasses were indicated.

For both refinancing and buying a house, FHA guidelines can take surprising twists and turns. For example, it's crucial to know when higher debt ratios are acceptable due to less than 10 payments remaining on a car loan. Or how to determine acceptable sources of down payments.

So instead of self-calculating your eligibility, look for an FHA lender you can trust. Begin by asking friends for specific names of mortgage professionals. Secondly, consult those you know in the real estate industry who often have the best contacts in lending.

As I always like to say, it is your mortgage and you deserve the best.

---

Article No.145 by Kate Ford, real estate insider and author of Ask Kate. If you enjoyed this article, you will like Home Buying Hints - The Path To Homeownership also.




Four Turbo Tips To Boost Homeownership

  1. Your lender is looking at your credit report. Shouldn't you be too? Get your Free Credit Report and Score - It's free and available in seconds.
  2. Refinancing? Buying a home? When money is tight and you need a loan that won't drain your savings, FHA makes it easy to qualify for a mortgage.
  3. Tired of debt controlling your life? Begin online debt reduction from the convenience of your home.
  4. Can you modify your own home loan? The answer is yes. But answer these 5 easy questions about mortgage modification before you decide.


Prime Real Estate Articles Tip No.52

Home Mortgage Application | Monthly Income Information


Next you will be asked for your monthly income. It is common for mortgage applicants to offer annual compensation or lump in overtime and bonuses with salaries.

But the home mortgage application requires a break down of monthly income into the following categories: base income, overtime, bonuses, commissions, dividends, interest, net rental income and other income.

Your mortgage professional will analyze your paystubs and tax documents to verify your income but you should still point out any sources of income that can be easily overlooked.

Take the guided tour with Kate's unique tips for filling out your home mortgage application...

View FNMA 1003





Search Prime-Real-Estate-Articles.com

Come on over here for Expert Mortgage Help and take a look!

Back to the home page of Prime-Real-Estate-Articles from FHA Eligibility Calculator


Breathe life back into your 2010 New Year's resolution. Here's how...

Get Online Debt Relief Now


Kate's Article
Announcements
For Busy People


Email

Name

Then


Your email address is
secure. You may
unsubscribe at any time.

Moving? Make your move a Smart Move! Learn how to organize and cut the clutter from start to finish...

A S.M.A.R.T. Move: Organize Your Move From Start To Finish - Moving E-Book Combo Organize Your Move!


Advertising Policy



Getting the mortgage help you need...





Find Anyone Today!


Subscribe

Search This Site

  1. Enter your query
  2. Click search
  3. Presto! Results!
Custom Search





Home | Blog | About | Sitemap | Contact | Privacy Policy | Terms of Use | Disclaimer | Advertising Policy

Prime Real Estate Articles | Copyright© 2008-2010 | All Rights Reserved | No Reproduction Without Permission
A family of informational websites independent of real estate companies and mortgage institutions

You are about to ask for money - Your hopes and dreams ride on a stranger's decision - Visit Get-Your-Best-Mortgage-Rate.com