FHA loans are a popular loan option for many homebuyers – especially those who are purchasing a home for the first time or those who are short on funds for a down payment.
How To Apply For An FHA Loan In 5 Steps
Applying for an FHA loan is easy and can be accomplished in 5 simple steps. The FHA application form includes five pages that need to be filled in, followed by four pages of directions and details. However, there is a broader process than just the forms, and that’s what we will outline today.
Step 1: Determine The Amount You Can Spend
This first step is not necessarily a requirement for an FHA application, but it’s a crucial part of the homebuying process. Before homebuyers begin the pre-approval process and their loan application, they should asses their financial profile and determine how much they can comfortably spend on a mortgage payment.
An excellent place to start is your net monthly income and recurring debts. How much do you earn after taxes have been taken out each month? What percentage of that income goes toward paying off debts? How much do you have leftover for your housing costs? Using a mortgage calculator is a very helpful tool for buyers to use when planning their mortgage budget.
If you aren’t sure how much you can comfortably afford to spend on a mortgage payment, talking to a mortgage lender can help shed some light on what type of financing and housing payment works for you.
Step 2: Pick An FHA-Approved Mortgage Lender
If you’re looking to apply for an FHA-insured mortgage loan, you’ll need to find a bank or lender who is able to offer FHA loans and has competitive rates for their FHA loan products. JVM Lending is proud to offer FHA loans and help educate prospective buyers on the benefits of FHA loans and help them with the application process.
3. Get Pre-approved With A Mortgage Lender
Pre-approval is a financial pre-screening process, during which a bank or mortgage lender examines your income, assets, and debts. The goal of this is to determine:
- If you are the right candidate for an FHA loan, and
- The amount you’re able to borrow based on your income and debts.
Getting pre-approved has many benefits while house hunting. It allows you to refine your search to homes you can afford. In addition to that, sellers will be more likely to accept your offer if you provide a pre-approval letter.
Learn how you can prepare for your mortgage pre-approval here.
4. Make Offers & Get Purchase Agreement
After getting pre-approved by a reputable mortgage lender, homebuyers can make offers with their real estate agent. Once an offer has been accepted, buyers can work on filling out their FHA loan application once they receive a finalized purchase agreement/sales contract. The purchase agreement/sales contract typically discloses the property information and additional details regarding the sale of the property that are necessary for a completed loan application. If you get lost or confused along the way, JVM’s Mortgage Analysts are available 7 days a week for any questions or concerns.
5. Close & Fund FHA Loan
You have now been pre-approved. You’ve found the perfect home, made a purchase offer, which the seller accepted, and have been working with your lender on completing your loan application. Now it’s time to close and fund your loan. When clients close a loan with JVM Lending, they’ll be working with a Closing Specialists who will help buyers resolve any conditions on their application and package their loan for underwriting to review and eventually fund.
Questions? Ask JVM Lending
If you are considering using an FHA loan for a future home purchase and have questions about the FHA loan application, contact our team! JVM Lending’s Mortgage Analysts are available 7 days a week by phone at 855-855-4491 or by email at [email protected] to help answer any questions or alleviate any concerns you might have about the FHA loan application and the homebuying process.