For the first time home buyer mortgage Minnesota recommends knowing about FHA loans. These are loans from the Federal Housing Administration that are somewhat easier to get even after the subprime meltdown happened a couple years ago. When a first time home buyer mortgage Minnesota applicant seeks out a FHA loan they find that the FHA is pretty lenient on credit issues and a credit score of only 620 should work to secure one. Typically, other loans require a credit score of 720 or higher.
Did you know you can get a FHA loan even if you’ve had a previous bankruptcy? It’ll take two years after the discharge date, but it is possible. So what could prevent you from getting a FHA loan? If you have had any federal liens, you’re out of luck. Federal liens might include tax liens or defaults on student loans, for example.
Keep in mind that FHA loans have competitive rates, offering lower rates than, say, a traditional 30-year fixed loan. And for the first time home buyer mortgage Minnesota is happy to report that you don’t need to put down 20 percent at closing plus closing costs. With FHA loans, you need to only pay 3 percent of the loan at closing– very reasonable.
Do you have a high debt-to-income ratio? The FHA allows for that; they’re generally quite lenient about their loans. If you feel you can afford payments, the FHA will allow a 50 percent debt-to-income ratio. To determine that number, add up your debt, include the proposed new mortgage payment, and then divide it by your monthly income total in order to get your percentage.
A first time home buyer mortgage Minnesota applicant should definitely consider a FHA loan. You just have to meet their credit requirements, have the 3 percent down payment, and be engaged in steady employment if you want your loan to be approved. The overall application process is quite notably easier than a conventional loan.