May 19, 2022

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Articles in Category: Credit Issues

Buying A Home With A Lower Credit Score

Preparing For An FHA Mortgage Loan

Applying for an FHA home loan doesn’t happen overnight–it takes time to plan, budget, examine your credit, and save money for the fees and expenses associated with an FHA mortgage. If you’re new to the home buying process and don’t know where to start, a very good way to begin to get an idea of how much home you can afford with your present income, debts, and financial obligations. Do you want to know how much you can borrow, and how much your payments might be? You can use an online mortgage loan calculator to estimate these amounts. Remember that the amount of the loan you might qualify for and the amount of mortgage payment you can actually afford may be two different things altogether, which is why many web-based | more...

 
Is your credit ready for an FHA loan?

Employment And Income Verification For FHA Loans

Here is a common variation on an FHA loan question we get frequently. “I have been employed for about two years, do I qualify for an FHA mortgage?” FHA loans require a variety of financial qualifications including FICO scores, your history of payments on financial obligations, your debt-to-income ratio, and other factors. Lender standards and FHA loan rules both apply, as do some state laws and other regulations. There’s no individual factor that determines a borrower’s ability to qualify for an FHA mortgage, a number of variables come into play as mentioned above. Sometimes one or more factors can disqualify a borrower, it’s true-a low FICO score, debt ratios that are too high, missed payments in the last 12 months leading up to the loan application, or major changes in | more...

 
FHA Mortgage

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 refinances 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 no cash-out | more...

 
Is Your Credit Report Hurting Your Chances At Loan Approval?

What Hurts Your Credit Ahead Of A Home Loan

Do you know why your credit score could drop ahead of a home loan application? If you are worried about your ability to qualify for the lowest down payment for a home loan with your FICO scores, it’s smart to know what can hurt your credit while you are in the planning stages of your FHA mortgage. There are three basic things that could affect your credit scores before you apply for a home loan. These issues are not the only ones, but they are some of the most common. You should anticipate these problems while you are planning and saving for your FHA home loan and take steps to ensure they do not become an issue. The first area to watch that potentially affects your credit scores? Your payment | more...

 
FHA loans

Building Credit Before Your FHA Home Loan

If you want to buy a home, especially if you are shopping for a house for the very first time, you may need to build credit in the year or more leading up to your application.  First-time homebuyers who do not have a long credit history do well to consider building credit, which is not quite the same thing as repairing credit. That said, the procedures for building and repairing are often similar. One important thing to remember; you don’t need a credit card to build credit. Some credit reporting agencies give you the option of having recurring payments (such as cell phones, utilities, etc.) added to your credit report.  These recurring payments can help establish a pattern of reliable payments, and you will need to make arrangements with each | more...

 
FHA loans

Fixing Your Credit Before Your FHA Home Loan

If you are considering an FHA home loan, you’ll want to begin working on your credit as soon as possible.  This is true even if you feel you have good credit–there are issues a lender sees on many credit reports that may complicate the loan approval process. These issues may or may not interfere with your credit score numbers but they could be a factor in the lender’s decision to approve the loan, offer a certain interest rate, etc. If the numbers aren’t the issue, some borrowers want to know what IS the issue? In some cases, there may be errors or information that should be disputed on the report because you don’t want your loan officer making decisions about your loan based on information that isn’t accurate. The credit | more...

 
FHA loans

Down Payment Help For FHA Mortgages

Who qualifies to get down payment assistance in order to buy a home? If you are using an FHA mortgage, your downpayment requirement is, at a minimum, 3.5%. And while that isn’t as large a down payment as you would make if you wanted to eliminate private mortgage insurance from a conventional home loan, some may struggle to come up with the money down. Buying a home can be expensive. There are inspection and appraisal fees, there may be pest control services to pay for, title searches, and more. Saving early is the key to making your down payment easier to manage in your budget. But even with saving early, extra help may be needed. That’s where down payment assistance programs can come in to help. But what does it | more...

 
FHA Home Loan Income Rules

Do You Need To Fix Your Credit Before You Buy A Home?

There are plenty of third parties who promise to fix your credit for you, for a price. But did you know you can do your own type of credit repair without having to pay or coordinate with anyone else?  You should definitely try working on your own credit before you try to pay someone else to do it for you. But how is it done? The first thing to remember is that you need TIME. Don’t assume you can fix your credit scores and loan repayment history while you’re working with your loan officer to get your FHA mortgage application approved.  You will need to start working on your credit far earlier than that, as it takes time for credit reports to notice the work you’re putting in (on-time payments, | more...

 
How FHA Home Loan Limits Are Set

Buying A Home With An FHA Loan After A Deed-In-Lieu Of Foreclosre

If you experienced trouble with a past home loan and wound up making arrangements to surrender the deed of the home in lieu of foreclosure, you might be forgiven for assuming you wouldn’t be eligible for another home loan.  This assumption is not true. You CAN become eligible for a new FHA mortgage once certain requirements are met. What do FHA loan rules in HUD 4000.1 say about getting a new FHA mortgage following a deed-in-lieu of foreclosure? We get many questions about issues like these. One variation on a common FHA home loan question goes like this;  “I completed a deed-in-lieu of foreclosure a few months ago. According to the government guidelines, how long do I have to wait before I can refinance or purchase a home?” The rules | more...

 
Home Loans

Buying A Home: Credit Questions And More

There are plenty of questions first-time buyers ask about home loans and the credit requirements you need to get the best deal on your FHA mortgage. Here are some common questions you should know the answers to: I Have Multiple Credit Scores. Which One Gets Used? One of the more potentially confusing things to a new borrower? FICO scores. Most consumers will have three FICO scores, they may not match, and the lender may choose your middle score as “the one”. In cases where you only have two FICO scores, the lower one may be used. If you worry about FICO scores, be sure to take early steps to raise the score before applying for the loan. Start as early as possible and work on raising your scores by paying | more...