FHA Mortgage Loans in Seattle
Seattle is an astounding place to live and people from all over the U.S. wish to own a home in this city. Seattle is not only renowned for its natural beauty but also for one of the fastest-growing tech hubs in the world. This amazing city, also known as Emerald city, has a plethora of outdoor activities and is home to a diverse music scene, and artistic culture. Seattle is a great place to live and if you’re going to buy a home in Seattle, you are going to have an amazing life there.
Once you find the right house to settle down in Seattle, you need to be smart while looking for mortgage loan options for purchasing that house. There are several types of mortgage loans and FHA loans are one of the most suitable options for an average American buyer, especially for first-timers. Getting an FHA loan in Seattle has many benefits over conventional mortgage loans. Let us have a look at those benefits along with some other necessary details regarding FHA loans.
Benefits of FHA Loans in Seattle
The term FHA stands for Federal Housing Administration and FHA loans are insured by the federal government. These types of loans are provided by the mortgage lenders but guaranteed by the FHA. Such a guarantee for Seattle FHA loans makes the loaning facility a bit easier for borrowers who may not qualify for conventional loans due to stricter terms.
One of the major benefits of an FHA loan in Seattle is that it requires a 3.5% down payment if your credit score is 580 or more. You can get FHA loan approval even with a credit score of 500 whereas such a credit score hinders your approval for conventional mortgage loans. For approval on FHA loans and to avail of these benefits, you have to fulfill certain criteria. Refer below for further detail regarding those requirements.
Requirements for FHA Loans in Seattle
To get approval on their applications for FHA loans in Seattle, borrowers must need to meet certain parameters. These criteria help the mortgage lenders to understand the financial credibility of the borrower, thus, determining the risks with the repayment of the loan amount. Also, borrowers with impeccable financial records get lower-rate mortgages.
Here are the things you should know about the requirements for getting FHA mortgage loans.
- Credit Score: A credit score signifies the financial behavior of an individual. As a borrower of FHA loans in the US, you need to have a credit score of 580 or above for a 3.5% down payment and in the range of 500 to 579 for a 10% down payment option.
As it can be observed, the higher the rating the better the chance of approval and terms of repayment for you. Therefore, if you have a bad credit score, it is highly recommended to raise it in the optimal range for maximum benefits through FHA loans.
- Income History : Income history tells the financial stability of the borrower. You should have verifiable proof of employment history for at least the last 2 years. Your steady income should be confirmable through federal tax returns and bank statements. You will have to submit 2 or 3 last tax returns documents and bank statements of the last 2 to 3 months.
- Debt-to-income ratio(DTI) : Debt-to-income (DTI) ratio signifies whether an FHA loan borrower will be able to repay the required amount regularly without any significant interruption. Mortgage lenders prefer borrowers having a DTI ratio of 40% or less. The lesser your DTI ratio, the better will be your chances of getting the loan.
Want FHA Loans in Washington Now?
As a home buyer in the Seattle area, you have quite a few FHA mortgage loan options available to you. At RightNowMortgageLoans, we have the most reputed team of mortgage brokers in Seattle to assist you with FHA-insured home loans. Consult us now and make your home-buying endeavor a lot easier.