Preparing for your first FHA home loan in Fort Lauderdale, FL is an exciting time! If one of your goals for next year is to own your own home, now is a great time to start preparing! Most financial experts will tell you that you should plan to spend at least a few months preparing to apply for a loan. Here are a few things you can do as the New Year rolls in:

Get your financial score to qualify for FHA Loans in Fort Lauderdale

If you want to qualify for the best FHA loan rates in Fort Lauderdale, FL, your credit score should be at minimum a 580. You will get much better rates if your credit score is over 650 and the best rates for scores over 720.

FHA-Loans-Fort-LauderdaleBefore you apply for FHA Loans in Fort Lauderdale, you can check your credit score and credit report through one of the three credit reporting agencies. While you are entitled to a free credit report from each company (Transunion, Equifax and Experian), you may have to pay a small fee to see your actual score.

If you discover that your credit score is not up to par, you can take a few steps to raise your score:

Pay off debt: Pay off as much consumer debt as possible. 

Pay your bills on time: Timely payments make up as much as 35 percent of your total credit score. Pay those bills on time every month to see a boost.

Make more money:  Debt to income ratio makes up a chunk of your score as well. To help raise your credit score faster, consider a new job or a second job to raise your income level and lower your debt to income ratio.

Look for errors: Check your credit report carefully to ensure that all of the debts and other transactions are yours. Annual checks are a great way to catch any identity theft as well.

Get better FHA loan mortgage rates with a down payment

You can get even better FHA loan mortgage rates with a sizable down payment. Your down payment is money you provide to the lender upfront to assist in the home purchase. The down payment is applied with your mortgage loan to give you enough funds to buy the home you want.  Some couples who may not otherwise meet FHA loan requirements Fort Lauderdale may be able to get a home loan with a good down payment.

Most loan require between 5 and 20 percent of the total home price as a down payment. If you put up less than 20 percent of the home loan, the lenders will require you to pay for mortgage insurance (this protects the lender from default).

Because 20 percent can be difficult to save, there are many programs for first-time homebuyers to help offset the cost. Some programs even allow for down payments as low as 3.5 percent. The Federal Housing Loan (FHA) program is a popular program that requires a minimum of 3.5 percent for qualified buyers.

Build an Emergency Fund before you get a Fort Lauderdale FHA Mortgage

One of the most important things you can do before applying for a home loan is to build up an emergency savings fund. This money should be in addition to any down payment you save. Ideally, your emergency fund should cover at least 6 months of expenses.

Emergency funds help cover costs in the event of an unexpected illness, injury or job loss. Having an emergency fund will allow you to meet your Fort Lauderdale FHA mortgage obligations, even if an unexpected incident cuts off income.

When building an emergency fund, factor in all expenses to determine how much money you would need per month. Include rent, insurance, groceries, utilities and other debt payments.

Seek Preapproval for FHA Home Loans in Fort Lauderdale

Before you find the home of your dreams, make sure to get preapproval for FHA home loans in Fort Lauderdale. A preapproval does not guarantee that you will get the loan, but it does provide a price range so you can narrow down your home search.

The preapproval process usually comes after you have determined how much you can (or want to) spend on your home each month. Prequalification will give you an idea of how much you can spend.

When bidding on a home, clients who have a preapproval get top priority, so make sure to take the time to do this extra step. Not only will you have better odds of landing your dream home, the approval process is likely to take less time, which will help speed the closing on your new home.  Kloze home loans offers preapproval, so make sure to stop in before you begin shopping for your new home.

Preapproval tells buyers that you have the qualifications to get a certain amount of money within a certain timeframe. Sellers do not want to risk pulling their home off the market only to have the sale fall through because of a failed loan application. Preapproval provides a little extra security for both buyer and seller.

Take advantage of lower interest rates in 2016 and make this the year you finally get the home of your dreams.