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What Documents Do I Need To Provide to Apply for an FHA Loan?

If you are a first-time home buyer or an individual with low credit, FHA loans can help you find a place within your budget. These loans are also available for people with limited savings or have a high debt-to-income ratio. Here are some of the documents you’ll need when you apply for an FHA loan:

Proof of Identification

A driver’s license is the most common identification document. If you have a passport or a state identification card, you can also use them. The provider for FHA loans also allows you to use your Social Security card. Other acceptable documents include a certified birth certificate or a military ID for veterans, military personnel, and their families.

Proof of Employment

An employment verification letter from your employer confirms your employment status and type of job. People who regularly receive a salary can use pay stubs to show their earnings and deductions. Tax return forms like 1099s and bank statements showing employer deposits are also evidence of employment. Other acceptable ways to show proof of employment include an offer letter from a potential employer, an employee card or ID badge, an employment contract, and direct deposit authorization from the employer.

Bank Statements

A bank statement shows how regularly you deposit money in your bank and whether you have a consistent income. The statement also highlights your expenses to reveal your spending habits. If your expenses are low, this is a sign of better financial management. Other information available in your bank statements includes your account balance over a period, loan payments, and large transactions.

Credit History Reports

Credit history documents show details about your credit score, such as types of credit, length of credit history, and credit utilization. The report also lists all your previous loans and credit card balances and whether you paid them on time. If you have ever exceeded your credit limit or have high credit utilization, that information also appears in the credit history report.

Property Appraisal Documents

The property appraisal report includes a comparative market analysis or an automated valuation model. If the appraiser inspects the property remotely, they can provide a desktop appraisal. A drive-by appraisal is another option, which happens when the appraiser assesses the property’s value from the street. Only licensed appraisers or bank appraisers generate property appraisal documents. Real estate agents can also provide the property appraisal document in a few cases. The document should have a detailed description of the property and include details such as condition, layout, and size. It should also include the prices of similar properties within the same neighborhood. The FHA can also ask for appraisal documents that include the appraisal value and factors affecting the value.

Benefit from FHA Loans

FHA loans help individuals who need help getting loans from traditional banks. You’ll need to provide documentation, such as a driver’s license, proof of employment, and credit history. The FHE loan provider may also require other documentation. Once you get the loan, you can use it to apply for a mortgage and buy a house. Contact a mortgage provider to help you apply for the loan.

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