Your Question: How Can I Qualify for an FHA Loan?
Professor Tate Answers:
It's best that you prepare the following personal information in advance.
- Social Security numbers
- Names and location of your employers (past two years)
- Approximate value of all personal property
Show proof of your current residency by presenting the following documents:
- Address to your place of residence (past two years)
- Complete information for other real estate you own
Lenders need to gauge the risk that you bring in a borrow, and to objectify do this, you will be asked to give documentation of your income and savings vis-a-vis any existing loans. They might ask for your:
- Gross monthly salary at your current job(s)
- Pertinent information for all checking and savings accounts
- Pertinent information for all open loans
- Current check stubs and your W-2 forms (past two years)
- Personal tax returns (past two years), current income statement and business balance sheet for self-employed individuals
- Certificate of Eligibility and DD-214 (for veterans only)
If you have 3.5% downpayment for your mortgage, you would need a credit score of 580.
If you have a credit score from 500 to 579, a 10% downpayment is needed.
Clearance from the Credit Alert Interactive Verification Reporting System (CAIVRS)
To mitigate the risks from the government and lender’s sides, the CAIVRS or Credit Alert Interactive Verification Reporting System keeps track of the people that have defaulted from their government loans and other federal debts. You need to secure clearance from this system before you have avail of the FHA loan.
You asked, now you know!
-Professor Reel S. Tate