Buying your first home is an exciting time. You’ll likely have questions about everything from home inspections to mortgages. Scott DiGregorio works with first time home buyers in the Fort Meyers, Florida area, and can help you understand FHA loan income requirements and other key things about buying your first home.
What Is an FHA Loan?
This popular mortgage program offers loans to buyers who are not able to qualify for some other types of home loans. This is because the loans are insured by the Federal Housing Administration (FHA), essentially guaranteeing banks that their investments are safe.
FHA Loan Income Requirements: 4 Things to Know
1. Down Payment Requirements Are Easier
FHA loans have low down payment requirements. You only need to have 3.5% of your purchase price available for a downpayment, which makes these loans popular for many first-time home buyers. You can also receive downpayment funds as a gift.
2. Income Requirements Are Less Stringent
The FHA loan income requirements are also pretty generous. Guidelines recommend housing payments make up no more than 31% of your monthly income, but you may get approved for payments reaching up to 40% of gross income in some situations.
3. Debt Doesn’t Matter as Much
If you have other monthly debt form student or vehicle loans, credit cards, or other accounts, you may still qualify. FHA loan income requirements state that your total monthly debt payments (including the new housing payment) should not exceed 43% of your gross income. You may be able to get that ratio adjusted up to 50% in some cases.
4. Self-Employed Is Ok
If you are self-employed, you may be worried about qualifying for a mortgage loan. The FHA loan income requirements will need you to show just two years of stable self-employment income.
Take Steps to Achieve Your American Dream
If you are shopping for your first home in the Fort Meyers area, contact Scott DiGregorio to learn how an FHA loan could help you achieve your dream.