What are the qualifications for an FHA Loan?
For starters, you’ll need proof of income and employment, along with the preestablished means to cover a down payment and closing costs.
Your debt-to-income ratio (FHA loans require <43%) is all your monthly debt payments divided by your gross monthly income. Lenders use this number to predict your ability to manage monthly mortgage payments.
You’ll also likely need to provide a down payment on the home (FHA loans allow for down payments as low as 3.5% of the cost of the property.)
Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, dies or is unable to meet the contractual obligations of the mortgage. FHA borrowers may receive lower mortgage insurance rates than they would with other loan types.
As of 2019, that limit for most of the country is $484,350. That limit can go higher in counties where the housing costs tend to exceed the national average – up to $726,525 in some cases.