How Long should it Take Our FHA Loan to Go Through?

The FHA (Federal Housing Administration) loan program was set up to make it easier for Americans to buy houses. In this program, the FHA does not issue home purchase loans. Instead, the FHA insures mortgages which are issued by banks or other lending institutions. The Federal Housing Administration has a rule that whenever a potential buyer applies for an FHA loan, the lending institution must act on the application and inform the applicant of whatever action has been taken, within a period of thirty days. If you are familiar with the Madison Wisconsin home sales market, you know that time can be of the essence when you’re trying to close a deal. Here are some ways you can help your FHA loan to go through ASAP.

Mortgage Prequalification

Before you go out visiting homes for sale, your first visit should be to a mortgage banker to discuss FHA loans and other programs you might qualify for. The banker will go over the documents that you need for your loan application, including two official forms of identification, proof of income, your two most recent pay stubs, tax returns and W2s for the past two years, credit history and deed to your current home, if applicable. It is important to prequalify for a mortgage so that when you investigate Madison home sales and find a suitable property, you will be ready to move ahead quickly.  Sellers will take you more seriously when you have an accurate idea of your finances.

Make Sure your Application is Complete

Although the FHA limits the time period in which the lender must take action on your loan application to thirty days, the clock only starts ticking once you have submitted all the necessary information and documentation to your lending institution. They cannot process an incomplete application. So it’s up to you to check and double check that your application is complete and accurate. Don’t omit facts that you are afraid will make you look bad. Instead, get in touch with the FHA for counseling about factors like a shaky credit history, for example, before you complete the loan application.

Getting Ready to Buy

After your application, together with complete documentation, is in the hands of your lender, you can go ahead and look at homes. Both private sales and Madison foreclosures may be purchased using a FHA loan. Once you find a suitable home and the seller has accepted your offer, contact your mortgage banker for the approval and closing of your home loan. The amount of time that this will take varies according to the lending institution, but if you make sure to submit all the necessary documents right away, you will be doing your part to help speed up the loan process.