July 18, 2018

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Articles in Category: Credit Issues

Are Free Credit Reports Trustworthy?

Are Free Credit Reports Trustworthy?

Long before you fill out FHA home loan application forms, you should be requesting copies of your credit reports and reviewing the information your lender will see when you are ready to get your new home loan. There are many websites and third-party companies that offer free credit reports to help loan applicants, but not all of them are interested just helping consumers. Can you trust the companies that offer free credit reports and credit score information? While it’s not possible to recommend a specific organization (with one exception), it is good for consumers to remember that many companies offer free services in exchange for your personal data that can be used to market goods and services to you via your cell phone number, email address, and other information. The | more...

 
Can I Get An FHA Loan With A Debt Collection In My Credit History?

Can I Get An FHA Loan With A Debt Collection In My Credit History?

Can I get an FHA home loan approved even if I have a debt collection in my credit history? That is an important question on the minds of some FHA loan applicants going into the home loan process. This type of credit issue is commonly referred to as having a collection account, which HUD 4000.1 (the FHA Loan Handbook) defines as follows: “A Collection Account refers to a Borrower’s loan or debt that has been submitted to a collection agency by a creditor.” Collection accounts can be an issue for an FHA loan applicant; generally it is strongly recommended to come to the application process with 12 months of on-time payments for all financial obligations. Depending on circumstances (such as when the lender is required to manually underwrite the loan), | more...

 
What Is Good Credit? FHA Mortgage Loan Credit Score Ranges

What Is Good Credit? FHA Mortgage Loan Credit Score Ranges

What is considered good credit? Do you know what credit score ranges are considered the best? Or which credit scores are considered marginal or even what lenders consider to be bad credit? There are specific credit score rules in HUD 4000.1 that define who may be approved for the lowest down payment for an FHA mortgage loan, and specific ranges of FICO scores that require more money down. And finally there are the credit scores that are simply not eligible for the FHA home loan program. But these ranges don’t really address what is considered to be good or bad credit. They are simply the credit score numbers that make you eligible for the lowest down payment, a higher down payment, or no FHA loan approval at all. FHA loan | more...

 
Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

Credit Scores For An FHA Home Loan: When Low Credit Is Not Bad Credit

Are you worried about your credit scores for an FHA home loan? When is a low credit score a reflection of bad credit behavior? FHA home loan rules specify that the lender must insure a borrower as a 500 FICO score at the very minimum in order to qualify for an FHA mortgage, but your credit score numbers don’t tell the whole story. It’s true that FHA loan rule minimums for FICO scores do not always reflect the participating lender’s credit score requirements; borrowers are technically eligible for an FHA mortgage with the lowest possible down payment if they are applying with FICO scores at 580 or higher. The lender may require a credit score of 620 or higher for the same applicants. But your FICO scores only make up | more...

 
Seven Facts About FHA Home Loans

Are There FHA Home Loans For Borrowers With No Credit?

Are there FHA home loans available for borrowers who have no credit? Some home loan applicants may have little or no credit activity and worry that there may be no provisions in FHA loan rules for such circumstances. What does the FHA loan handbook, HUD 4000.1, say about this issue? FHA loan rules state that the lender is required to pull credit data for all FHA loan borrowers. Whether you need a new purchase home loan, an FHA One-Time Close construction loan, an FHA cash-out refinance loan or any other mortgage (except for an FHA Interest Rate Reduction Refinance Loan which has no FHA-required credit check requirements in most cases) a credit report will be pulled for each borrower obligated on the mortgage. In cases where the credit report shows | more...

 
FHA Home Loan Mistakes To Avoid Before You Close The Deal

FHA Home Loan Mistakes To Avoid Before You Close The Deal

If you’ve found the home you want to buy with an FHA mortgage and it looks like you are going to definitely close the deal, don’t be fooled; there are still mistakes to avoid before you sign the papers and accept the keys. One important blunder that should be avoided at all costs? Changing your financial status before loan closing-as in applying for new lines of credit, missing payments, or other issues that can have your loan officer thinking twice about approving the loan and allowing it to close. If your debt-to-income ratio isn’t ideal to start with, the addition of new credit will definitely affect your potential to close. FHA loan rules, lender standards, and other requirements all may factor into the decision on how to handles such contingencies. | more...

 
Home Loan Anxiety Part 2: Credit Issues Before Applying For An FHA Mortgage

Home Loan Anxiety Part 2: Credit Issues Before Applying For An FHA Mortgage

Do you suffer from “home loan anxiety”? Are you worried about your ability to qualify for an FHA mortgage loan? There are some important issues you should know about that can help reduce your worries about applying. The key is to address your concerns early enough in the planning stages of your new loan to make a real difference. Worried About Your Credit And How It Might Affect Your Home Loan Application? One of the best things any borrower suffering from anxiety over a home loan application can do is to contact the FHA directly at their toll-free number (1-800 CALL FHA) and request a referral to a local, HUD-approved housing counselor who can offer advice on preparing for an FHA loan application. The help of a housing counselor in | more...

 
Do You Suffer From Home Loan Anxiety?

Do You Suffer From Home Loan Anxiety?

Do you suffer from home loan anxiety? There are many people who want to apply for an FHA mortgage loan, often first-time home buyers looking at an existing construction loan or an FHA One-Time Close construction loan, who begin to worry about getting their loan application approved. Are You Worried About Being Able To Afford Your FHA Mortgage? There is good news for those who are worried they might not be able to afford the FHA home loan and can’t decide whether or not to apply. But there are tools you can use to help get an estimate of how much your FHA mortgage payment might run every month in the form of online mortgage calculators. These tools ask you to input an estimated price of the home, potential down | more...

 
What To Do If Your Credit Score Isn't Perfect But You Are Still Buying A Home

Common Credit Problems That Can Affect Your FHA Mortgage Loan Application

What are the most common credit issues that may negatively affect your ability to get approved for an FHA home loan? There are several areas you can anticipate in the home loan planning stages; addressing these areas long before you apply for any major line of credit, including a home loan, goes a long way toward helping you get your new home. FHA Loan Credit Issues: On Time Payments The timely payments issue is one of the simplest areas to address, but also one of the most common problems going into a home loan application. In general, borrowers should never apply for a loan with any late or missed payments on their record in the 12 months leading up to the loan paperwork. Anything less than this can seriously compromise | more...

 
FHA Home Loan Approval And Your Credit Report

FHA Home Loan Approval And Your Credit Report

What do potential home loan borrowers need to know about FHA loans and credit reports? There are some very simple things that some don’t realize going into the home loan process that can definitely affect your participating FHA lender’s ability to approve your mortgage. FHA Loan Credit Checks The lender is required by FHA home loan rules to pull a loan applicant’s credit reports to review credit scores, credit history, and look for overall patterns of reliable use of credit. However, some borrowers mistakenly assume that the lender will look at a credit report once, make the notes, and never go back to the credit report again. This is not necessarily the case. Your FHA lender is charged with making sure that a borrower’s credit position is stable and that | more...