Qualifying For an FHA Mortgage

There are different qualifying criteria for different types of each mortgage product. It is important that you know the important criteria for the mortgage product you select. Of a conventional mortgage, jumbo mortgage, super-jumbo mortgage, the FHA mortgage is the easiest for which one can qualify.

Just because it is the easiest mortgage to qualify as a borrower does not mean that the underwriting guidelines are easy and it is very important to know exactly what the important points are for underwriting an FHA mortgage.

Here are some of the basic parameters that can keep you from being qualified for an FHA mortgage:

  • Stable Employment. First and foremost, you need to  show two years of employment with the same company. This is a hard and fast  rule. Unstable employment or changes in your income are a red flag for any type  of mortgage, and an FHA loan is no different.
  • Consistent Income. In conjunction with steady  employment, you need to show consistent income. This could be a sticky point for  commissioned sales people or mothers who have returned to work after having a  baby if they chose to return part time. Circumstances can explain some  situations away regarding this one.
  • Credit Report in Good Standing. No recent  delinquencies should be on your credit. As a rule, more than two 30 day late  records in the past two years will more than likely disqualify you for  consideration.
  • No Bankruptcy. Much like the credit report item above,  there can be no bankruptcies in the past two years.
  • No Foreclosures. Foreclosures do  not necessarily disqualify you, but they should not be less than three years  old. If you have an older foreclosure, then the other requirements will need to  be spot on, especially your credit, which will need to be immaculate.
  • Maximum Mortgage Payment. The mortgage payment cannot exceed 30% of your total monthly gross income. That  means that if you make $3,000 per month, your payment should not exceed $900.  This is more of a guideline, as you may be able to prove that your income may  drastically increase in the next three to five years. For example, if you are  finishing medical school or law school, your present income is not truly  representative of your projected income five years down the road.

As you can see it’s very important even for an FHA mortgage to have “all of your ducks in a row” to qualify for an FHA mortgage loan.



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