There’s a great deal of pride in owning the roof over your family’s head. As such, many people count on the ability to secure a mortgage loan to realize this dream. Unfortunately, lenders became skittish after the 2008 financial meltdown and tightened the borrower requirements.
As a result, many people don’t quite make the cut when making an application. However, that shouldn’t serve to kill your dreams of owning one. You can join an FHA loan program offered by firms such as Primary Residential Mortgage, Inc. and be on your merry way to the homeowner club.
Buy more than one home
If your finances can allow and you make the cut, you can secure an FHA loan that enables you to buy a complex with up to four houses. However, one key aspect that underlies the success of such an application is that you need to reside on the property.
The value of the property should be with the median value of homes in the region. However, if it falls above the basal limit, you can have the restriction lifted after consideration.
The loan limit varies between states, with special exemptions applying in states such as Honolulu, Hawaii where the cost of a two-unit property exceeds the standard loan limit of four-unit property.
Can carry a higher debt ratio
With a conventional loan, you need to keep the debt utilization below 30 percent. With FHA loans, you can go as high as 40 percent in the back-end debt to income ratio, and 31 percent in the front end. The front-end DTI account is for your monthly housing expense, while the back-end is the monthly debt obligation.
These ratios set the limits on your loan application to minimize the likelihood of default. Carrying too much debt might make it difficult for you to service your other debts and keep up to date with our mortgage payment.
Failing to qualify for a mortgage does not spell doom for your dreams of owning a home. You can explore FHA loans as a more affordable alternative and still realize your dream.