Will my FHA home loan be approved? That is a common question for some borrowers who worry that their credit isn’t good enough for a home loan, and for borrowers who may have adverse credit information in their credit history.
There is no single answer to this question since much depends on the borrower’s credit history, their patterns of credit use, debt ratios, and other factors. But in general there are some areas you can review to determine whether or not an FHA home loan is in your future.
Will My Home Loan Be Approved? Occupancy Matters
If you seek an FHA mortgage for a house that you (or at least one borrower obligated on the mortgage) do not intend to occupy as your primary residence, you will not be approved for an FHA home loan.
FHA mortgages are not intended for investment properties, retail establishments with no residential use, transient rentals such as bed and breakfast or Air b-n-b establishments, etc.
Will My Home Loan Be Approved If I Have a Bankruptcy On My Record?
Bankruptcy is not an automatic barrier to an FHA home loan but the borrower must wait out a minimum seasoning period before they are allowed to apply for a new mortgage loan. Lender standards, state law, and the terms of your bankruptcy agreement will factor into the lender’s decision to allow you to apply for a new mortgage, and when.
Will My Home Loan Be Approved If I Have Low Credit Scores?
FHA home loan approval depends on credit scores and other financial qualifications. Your ability to get approved does NOT depend on FICO scores alone, however. You will need to show patterns of reliable credit use, on-time payments, and an acceptable debt-to-income ratio in addition to your credit scores.
Will My Home Loan Be Approved If I Have Bad Credit But A Co-Borrower?
All parties to be obligated on an FHA home loan must credit-qualify. The credit shortcomings of one applicant cannot be offset by the credit strengths of another borrower.
Can I Be Approved For An FHA Home Loan If I Can’t Afford A Down Payment?
There is no such thing as a no-money-down FHA mortgage. But the good news is that you can apply for down payment assistance programs in your local area that may be able to help. Some of these programs are need-based, others may not be.
The FHA and your lender do not administer or provide down payment assistance; it will be up to you to find a local organization or program to secure such down payment help if it is available in your area.