Mortgage [FHA Loan] FHA Loan Requirements [Home Loans] FHA Loans (FHA)

Hey, this is Chris Trapani the Mortgage Pro! You know people ask me all the time with an
FHA loan, Chris how much loan can I qualify for? How much can I borrow? Well, it depends on a number of factors. And I’m going to go over a whole bunch of
them right now. Ok were gonna start with Debt to Income Ratio. Here’s how it works. There’s two debt to income ratios that we have
to worry about with an FHA loan. The first one is the payment. We call it the front end. It’s the first. So the payment can be no more than 47% of
your total income. So for even numbers purposes and just to make
it a little easier to calculate, let’s say you make Ten Thousand Dollars a month. That means that 47% up to Forty Seven Hundred Dollars can be your
house payment. Now we have a back-end ratio that’s also the
total house payment when I say total house payment what I’m referring to here is Principle
Interest Taxes Insurance and if you’re in a condominium or association you’re paying
an association fee that has to be included too. Forty Seven Percent. now we’re going to look at the back end. take that Forty Seven Percent that full payment that you have
and now we’re going to add your car payments student loans credit cards child support alimony
any of these types of things, that as a total can’t be more than Fifty Seven Percent of your total income. Alright, now we need to calculate your income. Everything we’re going to talk about is before
taxes are taken out when it comes to a job. There are a few tricks and a few tips we’re
going to talk about with other things for perhaps tax-free income but assuming you make
Five Thousand Dollars a month as a salary that’s it there’s no calculation necessary but most people actually
don’t get paid that way. Most people get paid hourly, let’s say you
make Twenty Dollars an hour – we’re going to calculate do you work forty hours a week or do you work
thirty seven point two hours a week? Because a lot of people do that, they don’t
work the full forty hours and some people work sixty hours a week so we’re going to have to
calculate overtime. But, let’s just assume you’re working 40 hours
a week to start. We start there, we’re going to take twenty dollars an
hour we’ll say, at forty hours. That’s eight hundred dollars a week. Now a lot of people are going to say eight hundred dollars
times four – four paychecks a month it actually doesn’t work that way. Because four times a year you’re going to get
an extra paycheck. so here’s how it’s going to work. You’re going to take that eight hundred dollars multiply it
by fifty two weeks and divide it by twelve and that’s the actual income. So, we’re going to show you some formulas
and we’re going to work with that, but I’m going to teach you a little trick here that
nobody seems to know. Take your hourly salary if it twenty dollars an hour
and if your work forty hours a week just multiply it by one hundred seventy three point three three three you get the same exact number. For all you mortgae professionals and real
estate professionals out there, I just taught you something. A lot of people who work hourly also work
overtime. How it works is we’re going to take a two year
average of your overtime. And a lot of people say I don’t know exactly
how much I make overtime it changes from week to week and month to month. Well here’s what happens – we require a verification
of employment we are going to send your business – your company a form to be filled out it’s
a standard form and it asks them, how much did you make in two thousand sixteen for overtime, how much
did you make in two thousand seventeen for overtime how much have you made so far in two thousand eighteen for overtime
and we’re going to average that out because sometimes people go into a very busy season
maybe come Christmas time or maybe the summertime is super busy but you don’t work overtime
in the beginning of the year. This way we average it out so nobody gets
shortchanged and we don’t give you too much overtime and credit for that either. Bonuses! We all like bonuses we’re going to average
those too. We’re going to average them over 2 years. If you get a commission a lot of people, salespeople
are their salaries and their income are commission driven. We’re going to take a look at 2 years commission
and we are going to average it out. That’s how we are going to figure out the
gross. Now that’s how we figure out your income it’s
the same exact thing for your spouse. And we’ll total the 2 together and then we’re
going to start working with the forty seven percent and fifty seven percent debt ratios. OK – i promised I would talk to you about
tax free income. What is tax free income? Well there is a number of different things. Child Suport is tax free income. Sometimes people are foster parents and they
get checks from the state or whatnot. Veterans! Veterans often receive income from disability
that is tax free income some people receive Social Security Disability or maybe even Social
Security but they don’t have enough other income to have to pay taxes on it. We take this we understand because you don’t have to pay taxes it’s actually worth more. So what we do is on an FHA loan we add fifteen percent
of it. What does that mean? If you get one thousand dollars a month tax free – I get
to add fifteen percent it looks like eleven hundred fifty dollars We’re going to add that to your income. Now what else is super important to calculate
how much home you can qualify for. Well we’re look at your credit score. Why your credit score? Well if you have over a five hundred eighty FICO score we’re usually going to be able to go up to that fifty seven percent debt ratio and forty seven percent front end. Sometimes it requires a six hundred twenty it all depends
on how well you’ve taken care of your credit or not. Not if you are below a five hundred eighty FICO score we are
going to be looking at a much lower debt ratio. If we can’t get a standard approval by going
to FNMA or Freddie Macs website we’re looking at forty one percent or forty three percent debt ratio.depending on the
circumstance. So we have to look at things as a whole. So don’t give up if your credit score is low
– we can work with that we’ll figure that out we’ll get you over the top to help you
Fire Your Landlord but be have to work within the confines of the government requirement
that FHA puts on it. Now what is the payment? Well – we have to calculate it based on today’s
interest rate. The interest rate changes daily it goes up
a fraction it goes down a fraction it changes daily we have to look at your property taxes
based on the purchase price we have to look at your total payment how much is you homeowners
insurance? PMI – mortgage Insurance have to pay on an
FHA loan it’s actually MIP we have to include those things in the payment so we can figure it out. Now it sounds like a really simple thing to
do – it doesn’t take long – all we need is a few documents from you – you can go to
fill out the application takes you 5 to 10 minutes and I’ll figure it out exactly. Right now I’m giving you this video so you
have an estimate but we have to end the guessing and start the knowing so we can Fire Your
Landlord. Sometimes people are just a little short on income and they say what do I do, do I have to really downgrade my house that much? Well, what about a non-occupying co-borrower. What’s that? Well maybe your brother sister cousin Charlie, mom dad they have good income with not a lot of debt and what we do is we add their income on to yours. Now, we obviously have to add their debt too – they are just as legally responsible as you are for the loan but very often that can help you go over the top and buy your own home. Hey thanks for watching the video I hope you enjoyed it and if you want to get started today – stop procrastinating! Either call me up 310-350-2546 of go to the
website right here you’ll see it Click on the apply now button, we’ll get you started we’re Going to Fire Your Landlord!

23 comments on “Mortgage [FHA Loan] FHA Loan Requirements [Home Loans] FHA Loans (FHA)”

  1. Leon Neftali says:

    Awesome video. Educational, thanks to this video I can start checking off my list to see if I qualify for my home

  2. Joe Screen says:

    Hourly wage times 173.333. That's awesome. Awesome 📹 video. Most people don't know any this so keep them coming.

  3. Toni Williams says:

    End the guessing, start the knowing. Great info and encouragement

  4. besparza09 says:

    Great information provided here.

  5. Realtor Peter Rosen MBA says:

    Very helpful, easy to understand tips for the first time home buyers.

  6. Rosa R. says:

    Thanks for making income easy to understand Chris.

  7. Susan Trapani says:

    Pretty cool. I wasn't sure how that worked. Now I know! Thanks!

  8. brandon wilcox says:

    great video

  9. hamd ou says:

    do you guy only accept the application on California? what about the other states?

  10. chris longo says:

    do you fha loans in new york

  11. Sam Garcia says:

    Do the underwriters take into account if the property is a multifamily (duplex, triplex) and tenants paying rents to how much you can borrow?

  12. Mekhi Singleton says:

    Great video! I am a college student looking into using an FHA loan to purchase a duplex. I’m an out of state student In my second year, and I haven’t had the same job for two years. Is there any way around the 2 years on the same job rule?

  13. Ricardon Lindoron says:

    Pls fix your audio volume. Rise it!!

  14. Jeniece says:

    Can my husband and I qualify for a FHA program loan if…he's current not on my existing FHA Program loan? Being it will technically be his first home…but my second.

  15. Na na says:

    Your eyes tho lol

  16. Giovanni Ramirez says:

    Can a co borrower apply for a first time home buyer FHA loan if he/she is already a co borrower on another fha loan?

  17. George Boyer says:

    Lutherangrants org saved me from debt .I received a grant of $36,000 yesterday all thanks to them .

  18. island girl tdavis says:

    Thank you so much. Can you refer me to someone in Philadelphia, make sure he's up to your standard..

  19. Blue Devil says:

    Hi im in Phoenix Arizona do you have office's in this state?

  20. Jonathan Castillo says:

    What about people who are self employed but also make the same or even more than working a normal job ?

  21. Edward Maduena says:

    I live in the Phoenix Arizona area and would like to be able to buy piece of land and sit a home. Will the FHA work or is there some specific loan that can help with that?

  22. ghassan Khanfar says:

    If i am working outside usa can i get fha loan

  23. El Light says:

    Yo he just gave me hope! I will deal with this company ASAP

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