Easy Approval Mortgage Guide
If you are thinking of applying for a mortgage and are looking for easy approval mortgage options, there are some programs that are easier to be approved for. That being said, it will come down to how you define “easy approval mortgage”. It could mean it is easy to get approved, or a simpler application process. We will cover both in this article.
Easiest Mortgage to Get Approved For
The easiest mortgage to get approved for is an FHA loan. The FHA guidelines are extremely flexible and they make it very easy for as many people as possible to qualify for a mortgage. Here are some reasons why an FHA loan is an easy approval mortgage:
- Credit scores as low as 500 permitted
- Down payment requirement as little as 3.5%
- Gift funds from a relative allowed for your down payment
- You can roll closing costs into the loan
- Sellers are permitted to contribute up to 6% of the purchase towards closing costs
Based upon the reasons above, FHA loans are the easiest mortgage to get approved for. However, they do require a lot of paperwork so the process is not that easy. The inspections are also very strict and sellers would be required to make all of the repairs before you can purchase the home.
There are many FHA lenders who claim to offer FHA loans. However, not all of them will allow for credit scores as low as 500. Some of them also do not participate in FHA 203k rehab loans either.
Easiest Mortgage to Apply for and Close
The easiest mortgage to apply for from a paperwork and verification standpoint is a No-Doc loan. These loan programs are different than what you may remember over a decade ago when you did not supply any documentation at all. However, the reduced documentation requirements make this the easiest mortgage to apply for.
Easy Approval Mortgage for Self Employed Borrowers
If you are self-employed, the easiest mortgage to get approved for is the bank statement loan. Bank statement loans were created for self-employed individuals who cannot fully document their income.
How it works is you provide 12-24 month’s bank statements to show the average monthly deposits over that time. The non-QM lender will use that average (or a percentage of the average) as the monthly gross income on your mortgage application.
No tax returns or P&L statements are required. This makes the bank statement loan an easy approval mortgage for self-employed home buyers. If they were applying for a conventional loan, the process would be much more difficult.
Easiest Mortgage Approval for Construction Loans
Once again, we will say the FHA loan is the easiest mortgage to get approved for. The FHA offers a construction loan which not only is easy from an approval standpoint, but it is also a one-time close construction loan.
One-time close means you close on just one loan and everything is paid for from the purchase of the land, to the payments to the contractor, to the final loan you end up with after the construction is completed and you move in. All of this with the low down payment of an FHA loan.
Easy Mortgage Approval for Refinances
The FHA streamline refinance gets our vote as the easiest mortgage to get a refinance approval for. The paperwork on the FHA streamline refinance is much easier. They do not require you to get a new appraisal which saves time and money. You can also roll the closing costs into the loan. This is a great option for you if you are simply looking for a lower rate.
Easy Mortgage Approval with No Down Payment
For borrowers who have no down payment, the easiest mortgage to get approved for is the USDA loan. VA loans also require no down payment but the paperwork needed for the approval is significant. Everything required to prove you are a veteran or active military is anything but easy. It is for this reason that USDA loans are the easiest mortgages to get an approval for with no down payment.
Keep in mind that USDA loans are for homes located in rural areas that are approved by the USDA. They have a simple lookup tool where you can see if a property sits in an approved area.
Easiest Mortgage Approval for a Condo
If you are purchasing a condo, the easiest mortgage to choose would be a conventional mortgage. Although the guidelines are not as flexible as an FHA loan, the issue is with getting the condo association approved.
FHA and other loan programs require quite a bit when it comes to approving the condominium project and the association in addition to your mortgage. Conventional mortgages require less from a condo approval standpoint than the others.
Other Factors for an Easy Mortgage Approval
It is not just the type of mortgage that makes approvals easy or difficult. First, you need to find a good loan officer to work with. A good loan officer will make the process much easier than one who is not very experienced. They can often find ways to get you approved quicker and know how to work their internal systems.
Next, the processor and underwriter both play a part in whether your mortgage approval will be easy or difficult. Unfortunately, it is impossible to know whether you will end up with a good processor or underwriter when you are applying for a mortgage. Therefore, you really are relying on your loan officer to work with them to push your loan through.