| Can I exceed the ratio? |
You may qualify to exceed if you have: - A large down payment
- A demonstrated ability to pay more toward you housing expenses
- Substantial cash reserves
- Net worth enough to repay the mortgage regardless of income
- Evidence of acceptable credit history or limited credit use
- Less-than-maximum mortgage terms
- Funds provided by an organization
- A decrease in monthly housing expenses
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| How large a down payment do I need with an FHA loan? |
| You must have a down payment of at least 3% of the purchase price of the home. Most affordable loan programs offered by private lenders require between a 3%- 5% down payment, with a minimum of 3% coming directly from the borrower's own funds. |
| What can I use to pay the down payment and closing costs of an FHA loan? |
| Besides your own funds, you may use cash gifts or money from a private savings club. If you can do certain repairs and improvements yourself, your labor may be used as part of a down payment (called "sweat equity"). If you are doing a lease purchase, paying extra rent to the seller may also be considered the same as accumulating cash. |
| How does my credit history impact my ability to qualify? |
The FHA is generally more flexible than conventional lenders in its qualifying guidelines. In fact, the FHA allows you to re-establish credit if: - two years have passed since a bankruptcy has been discharged all judgments have been paid
- any outstanding tax liens have been satisfied or appropriate arrangements have been made to establish a repayment plan with the IRS or state Department of Revenue three years have passed since a foreclosure or a deed-in-lieu has been resolved.
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| Can I qualify for an FHA loan without a credit history? |
| Yes. If you prefer to pay debts in cash or are too young to have established credit, there are other ways to prove your eligibility. Talk to your lender for details. |
