May 24, 2018

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Articles in Category: Credit Issues

Common Credit Problems That Can Affect Your FHA Mortgage Loan Application

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...

 
Am I Eligible For An FHA Home Loan If I Am In A Credit Counseling Program?

Am I Eligible For An FHA Home Loan If I Am In A Credit Counseling Program?

Are potential FHA borrowers eligible for an FHA home loan if they are participating in a credit counseling program? This is a question on the minds of some borrowers trying to fix credit issues and repair past mistakes or problems associated with their credit. Borrowers should always work on their credit, counseling program or not, before applying for any major line of credit such as a mortgage or auto loan. The FHA and HUD even offer referrals to local, HUD-approved housing counselors for borrowers looking for pre-purchase advice including credit tips. (You can call the FHA directly at their toll-free number, 1-800 CALL FHA for these referrals). Some borrowers choose a formal credit counseling program in order to work on credit repair issues, and there is an understandable concern that | more...

 
FHA Home Loan Credit Issues

FHA Mortgage Credit Issues

FHA mortgage loans require a credit check, but many future FHA borrowers have some kind of credit issue in their past. Some things aren’t enough to derail an FHA home loan application-old credit issues that have since been resolved, disputed accounts that have since been successfully resolved or have had a payment plan created, etc. What do borrowers need to know about credit issues that CAN negatively affect the ability to borrow? For starters, it’s important to know that the most recent 12 months of your credit activity will be very important. It’s crucial to avoid late and missed payments at all costs in those 12 months for best results. Other FHA loan credit issues can affect your loan (or not) depending on the timing, severity, and nature of the | more...

 
FHA Home Loan FICO Score Questions And Answers

FHA Loan FICO Score Questions And Answers

Every new borrower has FHA home loan FICO score questions they need answers to; do you know what the minimum FHA-required FICO score is to be approved for a new home loan? Do you know what it takes to be approved for maximum financing? Keep reading, there are many answers below. What Are The FHA Loan FICO Score Requirements For Loan Approval? The minimum FHA FICO score requirements for new purchase home loans are: -580 or higher = eligible for maximum financing with a 3.5% minimum down payment -500 to 579 = eligible for an FHA mortgage loan with a 10% minimum down payment The FHA minimum FICO score requirements listed above DO NOT include applicable lender standards. You will need to speak with your participating FHA loan officer to | more...

 
FHA Home Loans For Houses, Condos, And Townhouses 2

FHA Home Loan Resources You Should Know

FHA home loan resources you should know include online mortgage calculators, pre-qualification for a home loan, and the availability of free credit reports to help you in the research and planning stages of your new home loan or refinance loan. Get Your Free Credit Reports A Year In Advance Of Your Home Loan The government consumer watchdog agency, the Consumer Financial Protection Bureau (CFPB), reminds home loan applicants that they are entitled to “a free credit report every 12 months from each of the three major consumer reporting companies (Equifax, Experian and TransUnion)” according to the CFPB official site. Pulling your credit reports a year in advance is an excellent idea as it will give you plenty of time to deal with potentially outdated or inaccurate information, contest identity theft | more...

 
FHA loan requirements and your credit score

FHA Loan Credit Requirements And Your Credit Scores

FHA loan credit requirements state that the lender must pull your credit information and credit scores to review a borrower’s credit worthiness. But if you are applying for an FHA loan you likely have three credit scores the lender must contend with. Borrowers often want to know how the lender views these three scores-they can be different from one another depending on circumstances-and which of multiple credit scores is actually used to process your home loan. The rules for FHA credit score requirements are found in HUD 4000.1, the FHA loan handbook. Credit scores must come directly from the three credit reporting agencies and cannot be submitted or transmitted to the borrower or another third party then submitted to the lender. Your credit scores must come from the source. FHA | more...

 
FHA Mortgage Loans: Credit History Counts

FHA Mortgage Loans: Credit History Counts

When it comes to FHA mortgage loans, or any major line of credit, your credit history counts. Some might focus on the FICO score, but the numbers you get off your credit report are not the only credit qualifications needed to successfully apply for an FHA mortgage. Credit Report Data: The Big Three Many people use the phrase “Big Three” to refer to the three credit reporting agencies themselves; Equifax, Experian, and TransUnion. But here, we’re referring to the Big Three on your credit report itself. Your credit score, credit history, and the amount of credit you carry. The Big Three credit factors all count towards your potential loan approval or denial. Why? The lender is required to establish that you are a good credit risk for the loan. Your | more...

 
Are FHA Credit Requirements For Refinancing The Same As Buying A Home?

Are FHA Credit Requirements For Refinancing The Same As Buying A Home?

Are FHA credit requirements the same for refinance loans as they are for buying a new home? Many borrowers want to know if their credit scores, payment history, and other factors will be scrutinized as closely when refinancing. FHA loan rules for refinance loans vary depending on the nature of the new loan. The rules that govern this area are found in HUD 4000.1, the FHA Single-Family Loan handbook, and lender standards may also apply. The credit requirements we’re discussing here are FHA loan minimum standards. To know what a specific financial institution may require above and beyond these standards, you will need to talk to a participating FHA lender. FHA Loan Credit Check Requirements For Cash-Out Refinance Loans FHA loan rules in HUD 4000.1 state that cash-out and the | more...

 
Are FHA Credit Requirements For Refinancing The Same As Buying A Home?

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

Can I get an FHA loan with a collection in my credit history? The answer can be complex since no two credit histories are alike, but there are some general guidelines that can help you understand where you might be in terms of the ability to get a home loan approved even with a collection in your credit record. It should be understood that what follows are the FHA guidelines for the loan approval process in terms of dealing with a credit issue; lender standards may also apply (and often do) above and beyond these rules. HUD 4000.1 has the rules for lender requirements when processing a loan with collections in the borrower’s credit history. The rules start out by describing what the FHA considers a “collection”. “A Collection Account | more...