Skip to main content
_FB_2018-Icons-finalized-cleaned-up_new_FB_2018-Icons-finalized-cleaned-up_newGroup 9
Back
Scroll to top

FHA Mortgage Loan Insurance

If you’re in the market for a new home, it’s quite likely that you have thought about acquiring mortgage loan insurance through the Federal Housing Administration (FHA). Established in 1934, the FHA has helped millions of people insure their properties. Over the years, especially following the economic crisis of 2008, the FHA has implemented requirements for potential homebuyers.

Loan Limits

To remain eligible for FHA loan insurance, consumers must fall within the loan limits. These limits are not only divided by state but are also doled out per county. If you’re curious as to what your state’s FHA loan limits are, you can refer to the Federal Housing Administration’s website.

Debt-to-Income Ratio

This ratio was set to ensure homebuyers do not purchase a property that they cannot afford. By using these calculations, it can be determined whether or not a person has the potential to meet the demands of owning a home.  The ratio is looked at in two different ways:

  • Mortgage payment expense to effective income = Total mortgage payment divided by gross monthly income. The maximum qualifying ratio is 31%.
  • Total fixed payment to effective income = Total mortgage payment added to monthly revolving and installment debt, which is then divided by gross monthly income. The maximum qualifying ratio is 43%.

Credit

FHA requires that a borrower have good credit standing. In order to receive approval, a lender analyzes the borrower’s past credit performance. Loan approval will likely be declined should the credit history reveal slow payments, poor financial decisions, and delinquent accounts.

Other issues are having no credit history, filing for Chapter 7 or Chapter 13 bankruptcy, making late payments, being subjected to foreclosure, and receiving collections, judgements, or federal debts.

Apply for an FHA Loan with First Bank

You have a friend at First Bank to better understand the loan requirements. We work with the Federal Housing Administration to offer FHA insurance mortgages. In order to quicken the process, you can apply online. Just be prepared with some financial information, such as income, assets, and expenses; you will also have to know the property’s information, like the estimated purchase price and down payment (if buying) or estimated property value and loan amount (if refinancing).

———
Sources:
http://www.fha.com/lending_limits
http://www.fha.com/fha_requirements_closing_costs
http://www.fha.com/fha_requirements_debt
http://www.fha.com/fha_requirements_credit

Trending Topics

Four Different Types of Services | Banking

A bank’s job is to provide customers with financial services that help people better manage their lives. As technology advances and competition increases, banks are offering different types of services to stay...

Small Business Startup Loans – South Carolina

Building a successful business takes passion, hard work, and dedication, but you shouldn’t have to do it all on your own. With First Bank’s small business startup loans, you can get the funds you need to build...

Best Stress-Free Checking Accounts in Jacksonville, NC

A bank’s objective is to relieve you of the stress associated with managing your money. But sometimes, people can feel like their bank is only adding more stress by making customers jump through hoops just to keep...

Personal Loan Rates – Salisbury NC

If you are looking for some of the best personal loan rates in Salisbury, NC, come to First Bank for small bank service with big bank options. Salisbury, North Carolina is rich in culture and history and has 10 National...

Credit Card Processing for Businesses

If you are a business owner, you probably know that accepting multiple forms of payment (cash, debit, credit, and checks) is important. But you may not know just how essential credit card processing is to the success of...

Need Online Payroll Services Nearby? Trust Your Local First Bank

Going green isn’t only good for the environment. If you’re a business owner, turning your business into an eco-friendly venture could help you save money and attract more customers. By cutting costs in certain...

Apply for a Personal Loan in Lillington, NC

If you’re looking to apply for a personal loan* in Lillington, NC, stop by the First Bank on South Main Street for competitive loan rates and flexible terms. Our banking experts will help you customize your personal...

Education Savings Account – North Carolina

College is expensive. The cost of tuition, housing, books, food, and transportation starts to add up. The cost of going to college has gone up by over 400% since the 1970s. The average college student’s debt is...

Mortgage Basics

Understanding mortgages can be difficult, which is why we’ve put together some information to guide you through the mortgage basics. You don’t need an advanced degree in economics to understand the...

Best Small Business Bank – Albemarle, NC

If you’re looking for the best small business bank in Albemarle, NC—the search stops with First Bank. As a local bank, First Bank has a reputation for being an instrumental part of small businesses. Our...