The Federal Housing Authority (FHA) has the lowest down payment requirement of all loans (currently 3.5 percent of a purchase price), so it is no wonder it has gained in popularity. Applying for an FHA home-loan in Georgia is like applying for it most anywhere in the United States. FHA's guidelines, changes and the loan process is the same. FHA allows for higher loan amounts in some states where the cost of housing is high (such as Hawaii). To make an application for an FHA loan, you can choose to do so online, in person with your favorite loan agency, or even by phone.
Things You'll Need
- Last two years W-2 forms
- 30 days of pay stubs
- Two years tax returns if self employed
- Copies of banking statements (proving down-payment funds)
- Contract for purchase of home
- Copy of deed (if refinancing)
- Declarations page from homeowners policy (for refinance)
- List of all debts and monthly payments
- Copy of Social security cards of all parties
- Copy of drivers licenses of all parties
- Current credit report
Before applying for any mortgage, it is best to go online to Annualcreditreport.com and get all three of your credit reports. This is free once per year, but there is a small charge for scores. (Most banks require at least a 620 credit score to approve an FHA loan for a purchase or a "cash out" refinance loan. Some are now requiring a 640 credit score, however, that is the limits set by the bank who is funding the loan. FHA will turn down a loan request when the scores are in the low 500's). Check each report for duplications, errors and outdated information. Dispute these by calling the customer service number on page one of each report. Give the bureaus 30 days to respond, and your scores should increase.
Gather all of the loan documents listed above, placing them in a folder, and call your favorite lender who writes FHA loans to schedule an appointment. The lender may want to pre-quality you by phone before having you come in to complete the application process. This is helpful since it get the process started in a more efficient manner. Write down your questions and concerns, and be sure to get them all answered in this meeting.
Your lender will prepare for you a "good-faith estimate," which will give you all of the costs involved in closing the loan. If your credit, income and down payment funds are sufficient to qualify you for this loan, the lender will generate an FHA package which will require your signatures. Go ahead and sign and date these documents.
Have your lender run copies of the income and asset documents that you have brought to your meeting. When all documents are signed, the loan agent must scan and forward to the funding lender, which may not necessarily be the bank). When these documents have been viewed, you will receive a signature package to sign. Once that package is received, the loan officer will need to collect your funds for appraisal and the official credit report for the file. You will receive the totals needed so you will be ready to begin the loan process..
Tips & Warnings
- The funding lender must order the appraisal, and since the actual lender must generate and send out a loan package to you, this entire process takes a few more days than before this requirement. Real Estate agents should understand this, and extend "must close by" dates accordingly.
- Some counties in Georgia allow for higher loan amounts. These are areas where the residential real estate market are higher cost. (see reference below).
- Be sure to ask your lender what minimum credit score is required for an FHA loan through their bank.
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