Before entering any loan agreements to buy that house you want from the Paradise Valley homes for sale, it’s important to have the knowledge about your rights and the requirements set by the Federal Housing Authority (FHA).
Here are the rights of mortgage borrowers that you should be aware of:
- It’s your right to know the total cost of the loan. This includes the points, interest rate, and other expenses.
- It’s your right to look around for the best loan and compare the offers of various mortgage lenders and brokers.
- It’s your right to be aware of the fees that cannot be refunded if ever you decide to cancel the agreement.
- It’s your right to request a Good Faith Estimate of all the settlement charges and loan before agreeing to the deal and paying any fees.
- It’s your right to learn how much you and the lender pay the mortgage broker for your loan.
- It’s your right to ask for an explanation from your mortgage broker about what he/she will do for you.
- It’s your right to receive a credit decision not based on your age, color, race, religion, sex, national origin, or marital status.
- It’s your right to inquire about loan terms and charges that you don’t fully understand.
- It’s your right to be aware of the reason if ever your loan application was rejected.
The following are the FHA requirements that you need to meet:
- You need to have a credit score of more than 550 and you should not have any current late payments. You also need to prove that you have paid on time without judgments or collections within two years.
- If you have passed an application for an FHA loan, you need to give a proof of a minimum deposit that ranges from 3% to 5%. If you fail to meet this requirement, you’ll be denied.
- Aside from the down payment, you need to have liquid assets that are equal to two months worth of mortgage payments. You have to prove this through bank statements.
- You can’t exceed 40% of your income in debt including credit card payments, car payments, student loans, and other debts that recur monthly.
- The FHA has loan limits that are subject to changes. However, buyers who plan on purchasing homes that are over $300,000 are generally ineligible for the program.
- If you don’t have liquid assets required by the FHA, you may get a minimum down payment from a close family member as a gift.
Knowing your rights, as well as the requirements set by the FHA can help you in making your decision when it comes to loan applications before you buy that Paradise Valley real estate that you want.
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