An FHA loan is a specially designed home loan program for first-time homebuyers or the ones who have not owned a home in the last three years. Backed by the Federal Housing Administration and offered by the FHA-approved lender, this loan has lenient requirements and so, one of the sought-after choices for most homebuyers. One can get approval for this with as low as a 3.5% down payment and a 500 credit score.
But to get approval, you need to opt for one of the best FHA lenders in Houston. Wondering how to find the right one? Well, asking these questions can help you pick the right one –
1. How experienced are you with these loans?
Lenders who offer fundings for FHA loans need to be pre-approved. However, even among those, you should find the one, who has adequate experience in this field. Specific nuances, like minimum property standards, are a vital factor here. Working with an experienced FHA mortgage lender also helps get through the process faster. Moreover, some FHA-approved lenders participate in down payment assistance (DPA) programs that are specific to your state. Ask lenders whether they participate in any and check if you can qualify.
2. Which FHA home loan best fits me?
There are diverse FHA home loans to choose from, including FHA purchase loans, FHA cash-out refinance loans and more. So, after you share your information and goals with mortgage lenders, one of the primary questions that you should ask them is which FHA home loan will be the best fit for you. A good FHA mortgage lender will make you familiar with the FHA home loan options and give you a recommendation.
3. How does a rate lock work?
A rate lock freezes your mortgage interest rate until the loan closes. Rate lock policies vary by lenders, so, you should ask about this. Generally, it is offered after the initial loan application has been approved, however, before the underwriting process, during which a lender verifies the income and assets of a perspective buyer. This is when you should ask if there is a fee about available rate lock periods. Generally, lenders will lock your rate for 30 to 60 days. However, this period sometimes is shorter or longer, based on the FHA-approved lender.
4. What is the loan estimate?
Ask for several loan estimates from diverse lenders so you can compare and choose the loan that is right for you. It is a document that tells you important details about a mortgage loan you have requested. Ensure that certain details on the loan estimate are correct. Besides, it should reflect what you discussed with the lender, including the amount you are borrowing and whether your rate is locked. If an aspect of the loan estimate looks different from what you expected, ask the lender to explain this.
Once you get the answers to all these questions and are satisfied with these, apply for an FHA loan, and get close to fulfilling your dream of homeownership.
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