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FHA Mortgage


Maryland FHA Mortgage

Maryland FHA Mortgage - Learning Center.

Maryland FHA mortgage and Maryland FHA refinance home loans are insured by HUD and are available to help promote home ownership. FHA mortgages are home loans insured by HUD. The FHA mortgage is designed to encourage home ownership by promoting banks to lend and having the government insure the loan. Most FHA loans only require a 3.5% down payment on purchases and allow for up to 85% cash out on refinances. There is usually a insurance premium attached to the loan. Income, credit and asset requirements are set by general guidelines and also by the actual lending institution. You can learn more at FHA’s/HUD’s Q&A on FHA mortgages on their website.

Understanding a Maryland FHA Home Loan.

When you want to utilize an FHA home loan to purchase a purchase there a certain steps you should follow.

Understanding your income when using a FHA home loan:
Borrowers should have an established income for two years. If job change has occurred recently then the current employment information and the previous employment information should be provided. It is usually best if the new employment is in a similar profession as the previous employment. Also there should be little lag time between both employments. Two months worth of pay stubs should be saved prior to applying for the loan. The VA borrower should also have the previous two year's of W2's. If self employed then 1099 and a Profit and Loss statement from an accountant is recommend to help prove income.

Understanding your reserves when using a FHA home loan:
It is standard to hav a minimum of two months of reserves. Larger amounts of reserves will assist in the approval process. If required, a standard reserve is a minimum of two months of the purposed PITI (Principle-Interest-Taxes-Insurance) and any HOA or Condo fees. Meaning, this should be accessible cash and it should be ‘seasoned’ in some form. Seasoning means it should not be cash, it should have been in checking, savings or other traceable accounts like 401k and money markets.

Understanding your credit when using a FHA home loan:
 Regularly, two years of credit history is recommended with 3 open and active credit lines in good standing. Credit scoring is used in determining credit approval. Although there is no minimum score set is the automated underwriting system accepts the loan a score of 620 or better would be recommended and scores over 660 are considered within the range that the majority of FHA assistance programs would allow to be a baseline score.

Understanding the property requirement when using a FHA home loan:

The property must be appraised by a FHA approved appraiser and meet FHA requirements. The loan limits vary dependent on the property locations.

Common documents needed when utilizing a Maryland FHA Mortgage loan.

Original pay stubs for the previous month - but you should save at least the last 3 months.
Copies of your W2 for the last 2 years - be sure you have them for all borrowers on the loan.
For refinances - Copy of homeowners insurance - if you use a specific agent you should have their contact information available for the lender.
Copies of asset information - such as proof of money for closing costs  (if needed), 3 months worth of statements from your savings & checking accounts and investment records for mutual funds, stocks, bonds or other liquid investments.

Here are some simple steps to follow for first time Maryland home buyers:

  1. Gather the necessary documents (listed above  ‘Common Documents’)
  2. Search out the Maryland FHA loan limits in your area.
  3. Get general idea, based on income and debts, for what you may qualify for using the How Much Can I afford mortgage calculator.
  4. Now you are ready to get your first time home buyer advice direct from a loan officer. Take all the information you have and consider getting a credit report. Then request a rate quote.

Maryland 2017 FHA Home loan limit broken down by Maryland Counties and Cities.

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