FHA still remains a popular mortgage program for Michigan home buyers. Low 3.5% down payment, secure fix interest rates, and quick closings are just a few benefits the program offers. You might be wondering exactly how you go about get prequalified for an FHA mortgage?
First, it’s important to understand exactly what a “prequalification” actually is in FHA mortgage terms. An FHA prequalification means that under the information provided to your loan specialist, you generally meet the guidelines that are set for FHA loans.
At this stage, none of the information you provided is documented or verified. You may or may not have made a formal FHA application, you just want to know whether or not you can obtain an FHA loan in Michigan and if so, approximately how much can you borrow.
To prequalify for an FHA loan, you will first speak with a loan advisor either on the phone, online or face to face. The mortgage specialist will ask you a few general questions to get an idea about your current situation, your goals, your income and the amount of funds you will have when it comes time to close on your new Michigan home.
The loan officer will ask for your:
Household Gross Monthly Income
This is the amount of total household income from all borrowers that will be on the FHA loan. If you will be the only person on the loan, then only your income will be used. And remember, this is the monthly gross income, the income before any withholdings are deducted.
Employment
Along with how much you make each month, your FHA loan officer will want to know the nature of your job, what you do there and how long you’ve been at your current employer. FHA loans ask for approximately two years of current, full-time employment unless you are a recent college grad. If you have part-time income in addition to your regular job, be prepared to provide two years’ worth of part-time income from that job as well.
Savings
Your FHA loan officer will also pre-qualify you based upon the amount of funds needed to close on an FHA loan plus allow for additional closing costs that may be associated with the new FHA loan. This amount doesn’t necessarily mean how much money you have in your bank accounts today, but how much you will plan on having when it comes time to close on your new home.
To prequalify for an FHA loan here in Michigan, all it takes is a little time and answering a few questions. Once you have determined that you’re ready to make the move and apply for an FHA loan, your loan officer will then begin the documentation process that will complete the FHA loan approval process. This will include actual copies of your tax returns, W2’s, bank statements, etc. To learn more, please call us above with questions, or just submit the Quick Call Form on this page.
Home buyers should also keep in mind many locations in MI are still eligible for the 100% USDA loan. Home buyers can compare USDA and FHA loans here.