September 18, 2019

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Articles in Category: Credit Issues

FHA Home Loans And The Biggest Credit Mistake You Can Make

FHA Home Loans And The Biggest Credit Mistake You Can Make

In this space, we discuss FHA home loans and how they get approved. And we talk a lot about the biggest credit mistake you can make leading up to your home loan application-missed payments. And we’re not just talking about missed payments on one type of credit, we discuss the effects of missing a payment no matter what it is or how important to your financial bottom line. But it is human nature to forget good advice when you only get it from one source, which is why we’re turning our attention today to the advice of one of the three biggest credit reporting agencies in existence: Experian. Experian is 125 years old and has a lot to say about how to manage credit, improve credit ratings, and how credit | more...

 
How Job Changes Affect Your Mortgage Loan Application

How Job Changes Affect Your Mortgage Loan Application

How do job changes affect your FHA mortgage loan application and chances for loan approval? Many first-time borrowers need to know this due to personal circumstances; it’s true that FHA home loan rules require the lender to verify two years of employment and it’s also true that an FHA borrower does not have to be with the same employer for two full years to be considered for an FHA mortgage. But what are the consequences of a job change in the FHA home loan process or immediately before a home loan application? If the job change is an upwardly mobile move that benefits the borrower and still meets FHA loan income requirements (for stability and the likelihood of the job to continue) there should be little to no negative effect | more...

 
Four Things to Remember About Home Loans and Credit Scores

Four Things to Remember About Home Loans and Credit Scores

There are four things to remember about home loans and credit scores, especially for first-time home buyers looking to buy their first piece of real estate. FHA home loan rules are more forgiving when it comes to credit scores, but there are still minimum standards and requirements to meet. Keep these four things in mind when planning your home loan application for best results. Credit Utilization And Payment History Are Both Very Important How much of your credit limit do you use? This is a question the lender needs to answer because how you use credit is just as important as all the other factors that go into home loan approval. Carrying high credit card balances can hurt your chances for home loan approval-try to keep your balances below the | more...

 
Home Buying, FHA Loans, And Mortgage Trends

Home Buying, FHA Loans, And Mortgage Trends

Is 2019 the best time to consider buying a home? Recent mortgage loan interest rate trends and the news agencies that report on them seem to indicate that conditions are very good for first-time home buyers looking to purchase a home in the remainder of the year. One indication? Headlines during the week of August 4, 2019 that included phrases like, “Lowest Rates Since November 2016”. And then there are reports by agencies that monitor house prices in the United States. Consider the First American Real House Price Index (RHPI), which tracks the prices of single-family homes and the effects of factors like changes in mortgage loan interest rates on consumer borrowing power. The May 2019 report by First American includes this quote: “Consumer house-buying power, how much one can | more...

 
Home Buying, FHA Loans, And Mortgage Trends

FHA Home Loans And Housing Counseling

FHA home loans are for many different kinds of borrower-experienced and first-time home buyers alike. But it’s easy to feel overwhelmed by the process if you are new to it or haven’t purchased real estate before. That is one reason why it’s a very good idea to consider talking to a HUD-approved housing counselor. Did you know you can call the FHA at their toll-free number, 1-800 CALL FHA, and request a referral to an approved housing counselor? The Department of Housing and Urban Development (HUD) official site reminds borrowers that housing counseling is NOT just for new purchase home loans-if you are trying to avoid foreclosure or are trying to avoid homelessness, there are HUD housing counseling services for you, and those services may be provided free of charge. | more...

 
Myths About Home Loans and Credit

Myths About Home Loans and Credit

There are lots of myths about home loans and the credit requirements you need to be approved for a mortgage. Here are some pervasive myths about credit as it relates to the home loan application you may be considering in the near future. Credit Myths: You Need Perfect Credit To Get A Mortgage FHA mortgage loan credit standards are more forgiving than some conventional options and borrowers do not need to have a perfect record to qualify. What you DO need is 12 months or more of on-time payments with no late or missed payments, a history of responsible credit use with balances that are not close to the credit limit, and a solid employment history (two years or more). Home Loan Credit Myths: The Lender Only Pulls Your Credit | more...

 
The Difference Between FHA Loan Credit Score Requirements And Your Lender's FICO Score Rules

The Difference Between FHA Loan Credit Score Requirements And Your Lender’s FICO Score Rules

We answer many reader questions about FHA home loans, including information about credit requirements, appraisal issues, and FHA loan standards. Among the most common reader questions about FHA home loans? Questions about the credit scores required to get home loan approval. This issue is confusing to some borrowers because they don’t realize that FHA loan rules say one thing and lender requirements may say another. Is this a contradiction? No. The FHA loan credit score requirements should be viewed by the borrower as the minimum standard, with the knowledge that the lender is permitted to require higher FICO scores than the FHA’s minimums but NOT permitted to require LOWER scores than the FHA minimum. In other words, consider the FHA loan FICO score numbers as the baseline lowest scores permitted. | more...

 
Will My Home Loan Application Be Approved?

Will My Home Loan Application Be Approved?

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 | more...

 
What You Need To Know When Your Home Loan Lender Pulls Your Credit Report

What You Need To Know When Your Home Loan Lender Pulls Your Credit Report

Everyone who applies for a home loan should know the contents of their credit reports long before they start filling out FHA loan application paperwork. Just as important? Knowing what your loan officer is looking for out of your credit report. Did you know that FHA home loan rules published in HUD 4000.1 instruct the lender on specific areas of the report to examine? In fact, there are FHA loan standards for the credit report itself-the report must meet the following requirements in order to be used by the lender. The credit report must contain: the name of the FHA lender ordering the credit report; the name, address, and telephone number of the consumer reporting agency; the name and SSN of each Borrower; and the primary repository from which any | more...

 
FHA Home Loans And Perfect Credit: Fact Versus Fiction

FHA Home Loan Credit Issues: Collection Agencies

Many borrowers want to know if they are still eligible for a home loan even if they have debts that were referred to a collection agency. Can a borrower still get an FHA mortgage if they have collection accounts listed on their credit report? The FHA rules governing this issue can be found in HUD 4000.1, which begins with the FHA definition of “Collection Accounts”: “A Collection Account is a Borrower’s loan or debt that has been submitted to a collection agency through a creditor. “ When the lender finds collection information listed on the credit report, it is not necessarily an automatic denial of the loan waiting to happen. FHA loan rules require the lender to review the information to make sure the borrower wasn’t simply disregarding the debt | more...