Pennsylvania FHA Mortgages
With the economy a bit slower than average, many people might not even consider that it's a great time to buy a house. However, it's definitely a buyer's market right now, with lots of homes on the market and sellers who are motivated to reduce closing costs, lower their asking price, or make other concessions for the right buyer. If you can afford it, you won't regret buying now, but how can you tell if you're ready?
Why Go FHA?
You've probably heard all sorts of horror stories about the credit scores necessary to buy a home, the large amounts of cash you need for a down payment, and the further financial investment involved in coming up with $6,000 to $8,000 in closing costs. However, a Pennsylvania FHA loan can help with all of these issues. In stark contrast to traditional loan programs, Pennsylvania FHA loans are specially designed to provide buyers who might not otherwise qualify for a home with a chance to purchase one. Subpar credit scores are acceptable, and even borrowers who previously declared bankruptcy can qualify for an FHA loan. Down payment requirements are reasonable, with at least 3.5% required (which means that if you purchased a $200,000 house, your down payment would be $6,000 instead of the $40,000 required by most banks) and closing costs can be rolled into the loan.
Qualifying for a Pennsylvannia Loan
Qualification for a Pennsylvania FHA loan is a straight forward process, and the requirements are not stringent. In general, to qualify, you must:
- Have a steady or increasing income for the last two years.
- Have made less than two late payments for all your debt in the last two years. Each late payment should be less than thirty days late.
- Have not declared bankruptcy in the last two years.
- Have not had a foreclosure in the past three years.
- Be prepared for a new mortgage payment from the Pennsylvania FHA program which is approximately 30% of your gross income.