Too many people believe they can never buy a house because their credit score is too low or a 20% downpayment is required. The U.S. government recognizes the importance of home ownership to people and the economy, so it offers the FHA loan. It is a federally insured loan for people with lower credit scores but can pay a 3.5% downpayment and meet the debt-to-income ratio limit. You do not have to apply with the government either. The government only backs the loan, and you can apply for an FHA loan in Monroe, LA,at a local bank, such as Century Next Bank.
Meeting Basic FHA Requirements
The FHA has four minimum requirements.
- Credit score – 580 or higher or 500 if you can pay a higher downpayment
- Downpayment – 3.5 percent or 10 percent if the credit score is 500-579
- Debt-to-Income (DTI) ratio – debt cannot be more than 43% of income
- Loan limits – loan amounts are capped at $472,030
Though these are minimum requirements, the bank has some ability to adapt them to circumstances. For example, the bank will work with borrowers on the DTI ratio limit because circumstances may allow a higher limit. You will need to pay an upfront and annual FHA mortgage insurance premium (MIP), but once again, the bank will work with you as to whether it is financed into the loan.
Consider All Options
You want to work with a mortgage specialist who carefully assesses your situation and determines the options. Century Next Bank may suggest that the FHA loan in Monroe, LA, is the best route for a loan that fits your budget and financial status. The pre-qualification process is an important step for identifying the path to home ownership.
Century Next Bank offers home loans, including conventional and FHA loans in Monroe, LA.
