Posted On 21 Feb 2019
Hey this is Hadi Bahadori with Home Smart Evergreen Realty. This article is gonna teach you eight steps of what you need to do to buy a home using an FHA loan. It’s gonna give you a guidelines, it’s gonna give you all kinds of things, what documentation you’re gonna need and how the whole home buying process works with an FHA loan! Step number one – FHA is not an actual loan.
FHA stands for Federal Housing Administration and what it does is it ensures the loan so that people with a small of down payment can buy the home. Otherwise, without the insurance the risk would be too great – nobody can buy a home in that in that situation. Step number two as low as a five hundred FICO score you can buy from five hundred to five seventy-nine – ten percent down From five eighty and above we’re looking at only three and a half percent down. Gone are the myths of the twenty percent down to buy a house.
You can buy your own house with as little as three and a half percent down with an FHA loa. Step number three – here’s a question people always ask me Hadi, I have a bankruptcy well with an FHA loan two years must have elapsed from the time it was discharged till the time you can buy. Hadi, I have a foreclosure – I had a short sale. Three years must have elapsed from the day of the short sale or foreclosure and you could buy your own home again. Step number four here’s the debt ratio – if you make ten thousand dollars a month and I’m not saying if you make 10 grand but I’m just giving it to you for even number purposes – you can go to forty-seven percent of that forty-seven hundred dollars for qualification purposes for the house. fifty-seven percent when we take the total house payment and the car payment and the student loans child support alimony credit cards all the debts put together – fifty-seven percent so take your monthly income before taxes fifty-seven percent will include your debt forty-seven percent will be the house payment it must require and here both those criteria.
Step number five – income requirements, well in most cases you must have a two-year history of working in the same field in the same industry example if you just started a job working for Federal Express delivering packages and you started doing that today well if you don’t have a history in delivery for the last two years you’re gonna have to wait two years going forward if you worked for ups for the last two years or the post office or something in the same type of industry then as long as you have that two year history we’re good even though you’ve just started the new job. Now if you’re self-employed what we’re probably gonna do is we’re gonna average your income over two years that’s your net income that’s what after you write everything off all your expenses and if you just have a job and maybe your salary very simple but if you’re hourly, we’re gonna calculate you hourly and we’re gonna average your overtime over two years so we can look into things in a number of different ways.
We’re experts at figuring this out. Now once in a while people say to me, Chris I’ve only been doing this six months and I ask did you get an education in this field maybe a college degree maybe a certificate program maybe you went to a year of training to become a radiologist or a radio technician that type of thing well we can use that in lieu of the two years experience so there’s a lot of tech tips tricks trades little things we can do but you need to show me what it is so I can help you qualify for that loan.
Step number six – Documentation. We must prove everything must be forensically proven on paper – how much do you make – how much have you made for the past two years. So the documentation I’m going to start with I’m going to tell you we’re gonna need two years w-2s from your job we’re gonna need two years federal taxes once in a while we won’t need them but we will require getting them in case we’re going to need one month’s pay stubs so if you’ve been on the job for 10 years or you’ve been on the job for two months I need the last month’s pay stubs and this is for all borrowers so if there are a husband and wife both working need it for both we also need two months bank statements for any accounts that you might have savings account retirement account check an account all the different banks or credit unions or whatever type of money accounts we need two months worth and we need all pages.
If a page says this page is intentionally left blank I need that page. It sounds silly I know, but those are the guidelines also need your driver’s license and social security card this is super important in today’s day and age of you know what we have to deal with and the Patriot Act but it’s federal law we have to get those documents now once in a while if somebody’s had a bankruptcy in the past we need the bankruptcy papers if you’ve been divorced we need the divorce papers we need some extra documentation and that’s a case-by-case basis we’ll let you know what they are based on your individual circumstance so the paperwork is super important if we ask for 10 things and we get nine it’s kind of the same as having zero we need them all. Step number seven I’m gonna teach you what the loan process is and how that works what I like to do is get you first of all not pre-approved most lenders out there – they do these pre- approvals and well they’re only worth the paper that they’ve written on what I like to do is gather all documentation I actually send it to the underwriter the underwriter is the person who approves or denies the file I send all the paperwork as if we already have a property we’re ready to go I send you a credit I send you bank statements I send you everything that it takes and I let the underwriter say yes you’re approved we need this additional documentation which is very common but when you make an offer you’re gonna do it from a position of strength so we get you pre-approved and now what’s gonna happen is you’re gonna go with a realtor if you don’t have a realtor I know all the best most experienced realtors in the industry I’ll give you a great realtor now you’re gonna go with the realtor in your price range he’s gonna show you houses condominiums whatever you’re looking for in your individual circumstance and if you find that one or two properties that you say hey this is the one what happens is they the realtor is gonna write an offer and submit it to the agent who did the listing and I’m gonna assist them with helping to get your offer accepted in today’s day and age there are seven to ten offers for every property on the market because there’s a shortage of houses and this is driving the prices up so time is of the essence you want to get this going now here’s what happens they’re gonna review the offers they want to see which property and which offer is going to make the most sense for them obviously they’re gonna look at which one’s gonna pay us the most money they’re gonna look at which one is most likely to close that’s super important because sometimes there are offers that are not very good not very strong borrowers so they’re gonna evaluate all these things that’s where I get involved I call them up and tell them this is Chris the mortgage pro and I have a slam-dunk deal ready to go that is not pre-approved it’s already approved that will raise your offer near the top of the list if not to the top so that’s a very big deal once the offer is accepted what happens is we’re going to start with the loan process there’s disclosures and paperwork we’re in a very bureaucratic age in the mortgage industry and the whole mortgage industry is are gonna require you to sign paper about this thing thankfully we can do it electronically today you could just click on your computer or on your phone and accept those disclosures the next thing we’re gonna do is we’re gonna order title we’re gonna open escrow and we are going to order the appraisal we handle all of that so you don’t have to and again the underwriter is going to look at the appraisal they’re gonna look at the title they’re gonna look at escrow see if everything is acceptable is there any additional paperwork that we need from you the borrower has any changed and when we put all that together and they issue what’s called a clear to close that’s when we start doing the happy dance we’re excited everything’s going good we start the closing proceedings there’s gonna be a paper that’s gonna be emailed to you call the closing disclosure and that’s where it has the final numbers because everything must match to the penny and you’re gonna sign this closing disclosure and three days later you’re allowed to sign the loan documents and usually either sometimes that day or usually the next day of the day after we close the loan it funds the loan we wire the money to pay it off and then the escrow and title company work together to record the loan the when’s once it’s recorded the property is now finally a hundred percent it’s your property you’re a homeowner and the next thing that happens is the realtor is gonna be all excited to come and present you with the keys so you can open the door to your own home at that point we have fired your landlord that’s a big deal step number eight is really simple call me up just call me text me email me whatever it takes call one of my assistants We’ll get you the numbers really simple we sit down we go through the process if you want and you don’t have time and time is of the essence here’s what you can do you go to my website www.FireYourLandlord.info We’re going to Fire Your Landlord!
As found on Youtube