September 26, 2020

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Home Loans And Your Credit Scores

Home loans and your credit scores

What can borrowers expect from an American economy trying to recover from coronavirus lockdown measures? Before trying to predict the future, it’s important to examine the present. 

Mortgage market watchers and financial experts point to the fact that roughly seven percent of American mortgages are in forbearance at the time of this writing, and demand is changing where certain riskier types of home loans are offered.

Some experts are watching mortgage rates falling overall, but are quick to point out that those with FICO scores below the 700 range are experiencing more costly loans; some find it harder to qualify and some find it tough to get certain types of home loan such as cash-out refinance loans according to our sources.

What does all this mean for a borrower who isn’t even ready to get pre-qualified yet?

The future promises to be unpredictable, financially speaking. We are experiencing unprecedented levels of unemployment, volatility in the markets, etc. It will take time for these things to sort themselves out, but in the meantime any house hunter or refinance loan applicant is going to need to pay strict attention to their credit scores and credit patterns.

It’s a wise move to explore your options for credit monitoring, and research ways you can begin improving your credit score today, including reducing your credit card balances over time and paying all bills on time, every time.

Credit monitoring can help you to catch and correct credit report mistakes, evidence of identity theft, and keep your credit report accurate. Plan on working on your credit at LEAST one year in advance since lenders will be looking for a minimum of 12 months worth of on-time payments.

Borrowers with lower FICO scores will likely pay more for home loans and other large lines of credit for some time to come; some sources report that a fair number of lenders simply won’t even touch loans below a certain FICO score range at the moment. That range will vary depending on the lender.

If you get the impression that A) the future is very unpredictable and B) your credit scores will count for a lot more in the mid-term, you are correct.

If you want to pursue a home loan but need some advice on how to get ready to apply, call the Department of Housing and Urban Development at their toll-free number 1-800 CALL FHA to request a referral to a local-to-you, HUD-approved housing counseling agency.

FHA home loans have always had more flexible approval standards than many conventional mortgages, but in the current economic climate even FHA mortgages could be harder to come by unless you take steps now to shore up your credit, pay your bills on time, and maintain your scores.

It’s never too late to begin working on your financial health; start today!

Joe Wallace - Staff Writer

By Joe Wallace

April 30, 2020

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for for (8) years and is currently the Associate Editor for

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About was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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