Residents in California who want to buy a family home may be eligible to apply for one off California FHA home loans. Income is one of the main criteria used to decide if the applicant is eligible and also how much they can afford to borrow. As each county in California is responsible for setting their own income levels applicants should check with the appropriate authorities what that level is before they start the application process.
Credit scoring is used to help determine the borrowers eligibility and is calculated using their income and payments over the previous one to two year period. The FICO method of credit scoring is used, with an acceptable score for an FHA home loan being between 580 and 620. However, it should be noted that many of the larger mortgage companies will require applicants to score 740 or over. Borrowers with less than the required score will find it difficult to obtain a loan from a reliable source.
When you submit your loan application you need to be in a position to provide verification of your income over the previous two years. You should also be prepared for the lender to check into your debts and payment schedule over the previous year. Late payments or defaults on any other debts you have had within the previous year are likely to adversely affect your application.
Income that has been generated on a regular basis from pensions, investments or other sources as well as employment can be included in the income level calculation provided there is an expectation that they will continue in the future. Providing the income is regular the individual may still qualify for a loan. A qualified loan adviser can provide customized advice based on individual circumstances.
The rules on loans in the California area state that the value of the property must not be more than the income level set by the county. Nor should the monthly mortgage costs be more than 30 percent of the borrowers gross income. Borrowers should seek advice from their loan officer on the income levels which apply in their geographical area.
If you have been bankrupt or had defaults on other debts you will still be able to apply for an FHA home loan. You will have to wait for two years from the last payment has been made to clear your debts before you can apply. Providing you have a regular income and meet the income level criteria you should have no problems with your application.
The loan officer will contact the applicant once they have completed and submitted the application form online. The form requires the applicant to provide their financial history and is easy to complete. Once the loan officer has reviewed the application they will contact lenders to obtain suitable loan offers and work with the applicant to identify the best option for them.
The loan officer will discuss the terms and conditions of the California FHA home loans that are available. They will confirm the amount that can be borrowed, the repayment terms and any other associated costs. Once the borrowers decides to proceed the loan officer will ensure that the underwriter reviews the loan and issues the closing statement.
