Tips for Getting Approved for an FHA Loan

If you are a first-time home buyer and are interested in obtaining an FHA loan, consider some of the things that can help turn your dream into a reality. Here are some pointers to keep in mind:

Pay Off Your Old Debts

While you do not need to have perfect credit, you at least want to make sure that you do not have a lot of unpaid debt sitting in collections somewhere. Debt that is in collections could cause you to be denied the FHA loan until those debts are settled. Therefore, you need to spend some time and money getting all of those debts dealt with, even if it means that you will pay some of them off through a settlement agreement. As long as they are showing paid on your credit report when you apply for the FHA loan, that is all that matters.

Improve Your Credit Score

If you have found that your credit score is extremely low, you will want to do everything you can to work on that. One of the best things to do is to make sure that you are paying all your bills on time every month. The better your payment history looks, the more your credit score will increase. Sure, the FHA loan program is meant to help first time home buyers that might have less than perfect credit, but your score will be important when lenders consider how much of a down payment you need.

Get a Down Payment

The nice thing about FHA loans is that they do not require as much of a down payment, even if you have a poor credit score. You might only need 3.5 percent as a down payment. However, if your credit score is less than 580, you might need as much as 10 percent for a down payment. Even though that is a higher percentage, it is still a lot less than is usually required for a conventional loan.

All you have to do now is get all your ducks in a row, and once that is done you should be ready to move forward with the FHA loan application process. The sooner you get the application submitted, the sooner you will finally be a homeowner for the very first time. With so much to look forward to, you do not want to wait any longer. If you are looking for fha loans anaheim ca contact a local lender today.