FHA Home Loans Fairbanks, Alaska 

A lender that has been approved by the Federal Housing Administration (FHA) may offer a loan that is guaranteed by FHA mortgage insurance. Lenders are safeguarded from losses through FHA mortgage insurance. They have in the past allowed Americans with lower incomes to borrow money and purchase homes that they otherwise would not have been able to.

FHA loans come with a number of advantages over conventional loans. They are a good option for people who would not be qualified for conventional loans because of their more lenient credit and income requirements. A smaller down payment is needed for FHA loans, usually 3.5% of the home’s cost. It might be simpler for first-time homebuyers to purchase homes.

FHA loans have larger debt-to-income ratios and less severe requirements for the types of residences that may be purchased. Lenders can relax knowing they will be paid if a borrower defaults on the loan because the Federal Housing Administration backs FHA loans.

What Is The Process For An FHA Loan?

To be eligible for an FHA loan, a potential homeowner must fulfill a number of standards.

Credit

To qualify for the 3.5% low down payment option, borrowers must have a credit score of at least 580. Being approved for an FHA loan is often one of the easier processes due to the low down payment needed and the less-than-perfect credit that is acceptable.

Candidates with FICO scores under 580 might still be qualified for an FHA loan, but they’ll need to put down a minimum of 10% and meet any other criteria that might be necessary.

Income

In general, there are fewer conditions to meet in order to qualify for an FHA loan than there are for a conventional loan. The upper limits for debt to income are 31% and 43%. According to this, the housing payments should account for 31% of the gross monthly income, while the monthly loan payment should be 43% of the monthly income. However, these standards allow for higher ratios of up to 56.9% with compensatory variables.

Assets

An FHA loan requires a minimum 3.5% down payment as part of the collateral requirements. The borrower is also required to keep a minimum amount of reserves. These reserves typically consist of one month’s worth of principal, interest, taxes, insurance, and, if necessary, homeowners association dues. The reserves cannot be gifts, seller concessions, or lender credits; they must originate from the borrower’s own resources.

Assets must have been sourced or seasoned for 60 days in order to be considered. Unsourced cash deposits are not acceptable as a borrower’s asset.

It’s important to note that asset requirements will be expressed in terms of PITI (Principal, Interest, Taxes, and Insurance), which means you’ll need enough money to pay for a specific number of months’ worth of mortgage payments, including principal, interest, taxes, homeowners insurance, mortgage insurance, and HOA dues, if applicable.

Required Documents For An FHA Loan

Several supporting documents are needed after submitting a loan application. The following records, which may not be all of the following, are required by the lender:

Personal identification documents (such as a driver’s license, state-issued identification, a passport, etc.); a recent 30-day pay stub; and a social security card
W2s from the previous two years; bank statements from the last two months; most current account statement from a retirement plan; signed tax returns from the previous two years, if self-employed; and, if relevant, a divorce decree and child support orders.
Utilize Capital Home Mortgage to submit an FHA loan application.

We at Capital Home Mortgage are aware of how challenging it may be to obtain a mortgage. It is our responsibility to keep you from going through something similar. Call our Alaska Loan Officers at (907) 531-5048 to start your application.