What You Need To Know When Applying For California FHA Home Loans

By Jayne Rutledge


If you are a California resident with family you can apply for California FHA home loans, allowing you to buy your own home. Your income is one of the criteria used to determine your eligibility and the amount of money you can borrow. The income amount required to qualify can differ from one county to another and it is advisable to check if you meet the required level before you start your loan application to avoid disappointment.

Credit scoring is an important element of the process and requires full disclosure of all your financial income and outgoings over the previous 12-24 months. Your credit score is calculated using the FICO scheme and should be between 580 and 620 if you are to be considered eligible for an FHA home loan. You may find that many of the larger mortgage lenders require a score over 740, which can make it difficult to find reputable lenders if your score is lower.

Applicants need to supply details of their income for the two years prior to their application. They will also have to provide detailed accounts of all their income and debt payments. Their FHA loan application can be turned down if there are late payments or defaults in their financial history for the previous year.

Income which the borrower has received over the last year does not have to be from regular employment. Anyone who is retired and receives a pension or regular income from investments may qualify for a home loan. A certified loan adviser is the best source of information and advice on the application process and eligibility criteria.

The value of your chosen property must not exceed the income level set by the county if you are applying for a loan in California. In addition the mortgage payment each month should be less than thirty percent of your gross monthly income. As the income level varies from one county to another in California it is important to check your county limits before applying.

Anyone who have been declared a bankrupt must wait for a minimum two years after they have finished paying off their debts before they can apply for a home loan. After that period if they meet the income criteria and can show they have regular money coming in their bankruptcy is ignored. They are treated the same as all other applicants.

The process of applying for an FHA home loan is simple. Applicants can complete and submit their form on the FHA website. The form requires the individual to provide full disclosure and details of all income and outgoings. The loan officer allocated to review the application will contact the borrower to confirm details and options. The loan officer will identify suitable lenders and follow through on the administration and processing of any loan offer.

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.




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