FHA Loan Requirements Texas 2021: Basic Things You must Know
If you live in Texas and have bad credit, there is no other mortgage better than an FHA loan program. The Federal Housing Administration is a branch of the Housing and Urban Development, and it is a popular alternative among first-time homebuyers. After the heavy blow of the pandemic, almost every borrower is in a shaky state. When you have already faced rejection for conventional loans, the relaxed guidelines of the FHA loans can alleviate your pain.
So, what is the first thing you should do? Yes, you need to get down with the FHA loan requirements Texas. The mortgages are not designed for first-time homebuyers only. Moreover, the loan program is available for anyone who has bad credit and low income. With small down payments available, the FHA loans help overcome the home-buying challenges.
The article further explains the essential mortgage requirements that almost every FHA lender follows. If you can achieve these criteria, you can kick-off preparation the right way. So, let’s go through the FHA loan requirements in Texas.
FHA DTI Guidelines
Every mortgage lender checks your DTI ratio, and the FHA-approved lenders are no exception. The debt-to-income ratio indicates the percentage of income before tax that you pay out on monthly mortgage payments (such as student loans, credit cards, and other debts). You can find a debt-to-income ratio calculator and understand where you are. The FHA loans need 50% or less for the DTI ratio. So, keep an eye on the ratio. Many factors influence the debt-to-income ratio, remember.
FHA Property Guidelines
Borrowers often overlook the property requirements before qualifying for an FHA mortgage. There are a few things you must remember regarding the property you can choose. For instance, you can only take a home loan for a primary residence. Also, you should move in within 2 months of closing. You cannot buy an investment property with an FHA loan. You must hold the title for the property, or the name of a trust is also permissible.
FHA Credit Score Guidelines
The FHA loan requirements Texas are not stringent when it comes to credit scores. If you carry at least 500 credit scores, you can choose a 10% down payment. If your credit score is above 580, you can get a 3.5% down payment. Anyone with credit scores lower than 500 cannot apply for an FHA loan. Also, the lenders go through your credit history and see your financial situation for the last 12 months.
In the end, you should keep the FHA loan limits in mind. The limit is not the same in every county. Also, remember that the Federal Housing Administration only insures your lender. So, the requirements are set by the lenders. There is a high chance that you might find a different debt-to-income ratio or credit score requirement in Texas. It is always better to work with a local lender and shop around for finding more than one loan officer. So, compare the FHA loan requirements offered by each lender before the final decision.