FHA Loan Requirements for Debt Obligations is a post from: FHA,VA and Conventional Home Loans in all 50 States
When any borrower applies for a FHA loan in California their credit will be checked and all debt obligations that show up on their credit report will factor into their debt-to-income ratios needed to qualify for a FHA loan. FHA home loan requirements require FHA borrowers to fall under a certain debt-to-income ratios to qualify for a FHA loan. All the debts below are counted in your FHA debt-to-income ratio (DTI). To calculate DTI take all your debts (including your new home payment) and divide them into your income. The very maximum FHA loan guidelines all is 45.9% ratio of your total housing payment to income and 55.9% of your total debt + housing payment to income.
Here are some examples of the most common debt obligations counted in FHA guidelines:
- Alimony and child support
- Auto loans
- Housing payments (Mortgage + taxes + insurance)
- Student loans scheduled to begin within 12 mos of the VA home loan closing
- Credit card minimum monthly payments
The following are not included in the debt-t0-income ratio to qualify for a FHA loan, but they will factor into your FHA loan approval:
- Any judgments appearing on your credit must be paid per VA loan requirements
- Collections over $1,000 may or may not have to be paid, this is up to the VA underwriter
Generally most items that do not show up on your credit report are not counted as debt obligations per FHA loan requirements. For example, auto insurance, cell phone bills, utilities, etc… are not counted as debt obligations per FHA loan guidelines. Also, loans secured by retirement plans do NOT need to be counted as a debt obligation for FHA loan approval!
So I hope this gives you some guidance on what debt obligations are counted to qualify for a FHA loan in California. It may also help you plan on what to pay off or minimize in planning to get a FHA loan to buy a home in California. If you would like to get pre-approved for a FHA loan in California don’t hesitate to email me at homeloan8@gmail.com or call 858-922-7899.
Here are some of the latest advantages of FHA home loans in California:
- FHA loan down payment is 3.5% and this can come from a gift from a relative
- FHA loan rates are still hovering at 60 year lows
- FHA loan limits in many parts of California such as Los Angeles, Orange County, San Jose, and San Francisco go up to $729,750. In San Diego FHA loan limit is $697,500.
- FHA loan credit score does not have to perfect. Give us a call or email we are specialists in assisting borrowers to raise scores to where they need to be
Regards,
Rob Chomentowski
Sr. Loan Officer (FHA, VA, USDA, Homepath and conventional loan specialist)
858-922-7899
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