How to Qualify for an FHA Loan

Series Summary

Like all debt instruments, a loan involves the redistribution of financial assets over time, between the lender and the borrower. The borrower initially receives an amount of money from the lender, which they pay back in regular installments to the lender. This service is generally provided at a cost, referred to as interest on the debt. Acting as a provider of loans is one of the principal tasks for financial institutions. In this free video series, a financial specialist provides information on home equity lines of credit and home loans. Find out how to qualify for an FHA loan, when to refinance for a home equity line of credit and what banks are freezing residential home equity lines of credit. Learn about home loans, comparing home equity lines of credit and determining the rate for a home equity line of credit. Make better financial decisions with help from these free videos.

Video Transcript

"With the great prices on homes and the housing market today, I get asked by my customers constantly, what's the best way to get into a property. My name is Matthew McKillen, I'm with Innovative Financial Group and people have asked me, how do I qualify for an FHA loan. First off, an FHA loan is a government backed loan that's been very popular in the last couple of years because it still allows a client to get into a property with as little as only 3% down. Generally when they go to qualify you for an FHA loan, they look at a couple of different factors. One is they do take a look at your credit file, they want to see how you've paid your other debts in the past. They can also use non-traditional credit which means everything from paying on insurance to rental history, things that don't actually report to the bureau to qualify you. The second thing they like to look at is your ability to repay the loan. They're going to take a look at your income, all sources from within the household and sometimes they'll even allow cosigners or other family members to help qualify you financially for the mortgage. So basically when you're qualifying for an FHA loan, you need to have the 3% down payment, they like to see a as agreed credit file on the debts you paid on in the past and thirdly, they like to take a look that you can afford the loan you're taking by proving your ability to repay. Thanks again, my name is Matt McKillen, I'm with Innovative Financial Group."