Purchasing a home is one of life’s major landmarks for some; it is even a dream come true for others. FHA loans are designed for low to moderate income borrowers who are unable to make a large down payment. FHA loans allow the borrower to borrow up to 97% of the value of the home. The 3% down payment requirement can come from a gift or a grant, which makes FHA loans popular with first time buyers.
When you begin to seriously consider purchasing a new home it is important that you follow some simple steps to make sure that the process runs smoothly. The first thing you should do is an analysis of your debt to income ratio. This important step will let you know what type of home you can afford based on your monthly income and expenses.
The next important step in purchasing a new home is to get pre-approved for a home loan. The peace of mind that comes with knowing that your mortgage loan and credit reports have been approved will allow you to shop for your new home with confidence. When you find a home and are ready to make an offer, the fact that you have already been pre-approved for your loan amount will give the seller confidence in you as a buyer!
Here’s the new 2013 FHA Limit’s on what you can Borrow for a Home in Your State: