How to buy a home with an FHA loan.

Are you one of the millions of people who dream of owning your own home? The FHA has helped people like you every year purchase homes with an FHA insured mortgage loan. Many people are mistaken in thinking that you have to be a first time buyer in order to qualify for an FHA secure loan. This is not true. Any person who meets the general qualifications for an FHA loan can be approved.

An FHA loan is not money to purchase a home that comes directly from the government. Instead the FHA insures the money so that the lender has a safety net in the case that the borrower defaults on the loan and they have to foreclose. The lender does not want the property they want their money so the FHA buys out the mortgage from the lender and then sells the home to recapture that money. This ensures that the lender gets their money back in the case that a loan goes bad.

Finding out what qualifications you do need is the first step in getting an FHA loan to purchase the home you need. In order to get an FHA secured home loan you must meet the following qualifications:

• Have a steady job or source of income. An FHA loan is like conventional loans in that you need to have a steady income in order for them to be assured that you are going to be able to make your monthly mortgage payment. This is why the FHA is looking for people who not only have steady income, but who have a secure job with two to three years of experience working at the same place of business. Without a steady source of income you can not qualify for an FHA loan.
• Have a verifiable income source. Not only do you have to have a steady job for at least two years, you have to prove it. Verifying your income can include documents like tax returns, bank statements, and letters from employers and accountants.
• Your credit score must be good. The FHA understands small credit issues, and does not expect perfect credit. However, you have to have some degree of good credit to show that you pay your bills on time and settle your debts. If the FHA allowed loans to be given to people with bad credit history there would be a higher chance of these people to lose their homes, and that is what the FHA wants to avoid.
• Your debt-to-income ratio is low. This means that you do not have a lot of debt accumulated. You could have great credit, but if all of your credit cards are maxed and you have two large car payments and these expenses take up a huge portion of your monthly income then you may be turned down for an FHA loan. The FHA does not secure loans for people who have overextended themselves financially and need to catch up on some of their debt before they can afford a house.
• Have a down payment. The FHA wants to help people who may not have the resources to save much money for a down payment. This is why they only require a 3% down payment to purchase a home. This means that if you were purchasing a $100,000 home you would only need $3,000 for the down payment. This allows many people to become homeowners with little or no saving to do.
• Can you afford the other costs that come with purchasing a home? There are many maintenance cots that are associated with purchasing a home, and you need to be able to make enough money to pay these fixed and variable fees.

If you have just read this information and believe that you qualify for a FHA secured mortgage loan or you want to find out about FHA refinancing, then you should contact an FHA approved lender. They will put you through the preliminary approval process and tell you what you need to do to purchase a home of your own with an FHA loan. For more information on FHA loans go to http://www.fha.gov/buyer/index.cfm