The federal government helps make it easier for everyone to be able to get a loan to purchase a home. They do this thorough a program called Federal Housing Assistance (FHA). The program helps ensure that those who want to buy a home have more of a chance of being able to get approved for a loan through a banking institution so they can purchase one. This comes down to knowing where to look for FHA loans for ex-felons and others who may need a helpful program to make the purchase.
Being an ex-felon should not keep you from getting a mortgage or FHA loan. They likely will not ask if you have ever been convicted of a felony, but there are no laws that keep you from purchasing a home due to your criminal record. Be sure to learn all you can so that you can make sure you get the best loan opportunity for your situation and be to purchase home.
Traditionally, if you purchase a home and take out a loan to do so you had to have 20% down in order to be approved for the loan. For many people they may never be able to purchase home, because coming up with 20% to put down could be more than they can handle.
The average home price in America for a four-bedroom, two-bathroom unit is around $360,000. It may be more or less, depending on where in the country you live. If you had to put 20% down in order to be approved for a mortgage loan you would need to come up with $72,000 in order to be able to buy the home. Most people would have difficulty being able to save up that much money in order to purchase the home. This is why the FHA program was created by the federal government.
What the FHA Loan Does
The FHA loan program helps make it much easier for someone who has a lower income or credit score to be able to get a home loan. The FHA loans for ex-felons and others will ensure that those who want to buy a home can do so. While the loans are provided through traditional banking and lending institutions, the FHA program tells the bank that they will secure the loan if you do not pay it back.
Since the bank knows that the government will make sure the loan gets paid back, they are more likely to give you a loan for the home that you want to purchase. The FHA loan will make it to where you will only have to put down 3.9% to 10%, depending on what your credit score is, and that you have a payment that is easier for you to pay back. You will still likely have to pay mortgage insurance, which will be added in as part of your monthly rate.
What Will Be Considered to Get a Loan
If you are seeking a FHA loan you will need to get qualified through a lending institution or bank that offers mortgage loans. The first step of the process is to do what is called a pre-qualification. For this, you will submit the application with some basic paperwork information and they will tell you if you look like a good candidate to get a mortgage and how much you would be approved for. They will review your income, credit score, and ability to pay back the loan. The better your credit score the less you will likely have to put down.
The lender will provide you with a pre-qualified letter that will be used when you go house hunting. You may need to show it to be able to see inside homes and you will need to provide it to put in an offer to buy one. Once you put in an offer and it is accepted, then you will work with the bank to complete additional paperwork for the loan. You may have to complete submit things such as earnings statements, tax returns, credit report information, etc. When it is time to close on the loan, or make it official, you will have paperwork to sign, stating that you agree to the terms of the loan.
Lenders Offering FHA Loans for Ex-Felons
Check with your local banks and credit unions if you want to work with a lender that is close to where you live. Another option is to go with a national lender. As long as you are getting a decent interest rate and terms, you may not have a preference which lender you go with. Some may offer an incentive that will make it more enticing to choose them.
Below you will find a list of lenders that offer FHA loans for ex-felons and others who may struggle financially or have lower credit scores.
Bank of America – This is a nationally recognized bank that does provide FHA loans. They help make the process easier by allowing you do it online. You can schedule an appointment, have a chat session, and get prequalified without leaving your computer. They provide FHA loans that offer lower down payments, fix interest rates, and more. To get more information about their loans, click here.
Wells Fargo – This is one of the larger banks in the country and they do offer FHA loans for ex-felons. Their loan program helps make it easier for people to get a loan. They offer them without doing an appraisal, credit check, and they may not require income verification. They streamline the process and try to keep down payments lower. To get more information about their loans, click here.
U.S. Bank – This lending institution offers FHA loans. They do not require high credit scores and they keep the down payments lower. They provide the interest rate info online, so that they are transparent with those who are interested in obtaining a loan. They have locations around the country and work with people who begin the application process online. To get more information about the loan application process, click here.
