Articles Tagged With: Credit Check

June 17, 2021

FHA Loan Minimum Credit Scores: Tips That Can Help You

Are you concerned that your FICO score isn’t high enough to meet the minimum credit scores for the lowest down payment possible on an FHA home loan? On paper, FHA loan minimums for credit scores begin at 580 or better to qualify for the lowest down payment. Your participating lender may require a higher score but in general FICO score requirements for FHA home loans may be more competitive than some conventional equivalents. There is some good credit score advice should you take ahead of your home loan–it starts with pulling your credit reports to see what’s lurking in there, then checking your credit often and monitoring it. Being told to check your credit report is obvious advice. You will find that in just about any credit repair article. But | more...

May 25, 2021

FICO Score Basics First-Time Home Buyers Should Know

By Bruce Reichstein

What does a first-time home buyer need to understand about FICO scores? If you are interested in a home loan, you need to know what FICO scores are acceptable to the lender. You also need to know how FICO score ranges are viewed by lenders in terms of general creditworthiness. What makes a good credit score or credit score range, and what makes a “bad” credit score range? Investopedia says credit scores have a range between 300 and 850. What do lenders think makes a good credit score? The specific answer will depend on the lender, but as a rule of thumb consumers can count on FICO scores between 670 and 739 as being “good”. Scores above this range in the 740s to a maximum of 850 are “excellent”. What | more...

May 24, 2021

Credit Building For First-Time Home Buyers

By Joe Wallace

Are you interested in buying your first home but aren’t sure how to improve or build up your credit to give yourself a better shot at home loan approval? FHA mortgages have more lenient credit approval requirements than conventional mortgages but even those applying for FHA mortgages need to ensure their credit scores are in an acceptable range for the most affordable home loan possible. In some cases it is a good idea to consider applying for smaller credit first. This may be in the form of store credit cards or similr lines of credit. But what should a new borrower know about doing so? Building credit takes time and patience–it is unrealistic to expect results in a few weeks or even a few months. If you have never applied | more...

May 13, 2021

Get Your Credit Ready For A Mortgage

By Joe Wallace

Do you want to buy or build a home? Before you apply for a mortgage loan there are some steps to take in the planning stages to get you closer to loan approval. Checklists can be important tools when making the preparations you need before you apply for a home loan; purchasing a home is one of the most important investments you can make; you’ll have an easier time in the process if you are organized. You will want to start preparing this checklist long before you are ready to fill out paperwork to apply for the mortgage or to get pre-approved. This is a process that should begin, at a minimum, 12 months ahead of your application. What should you put on a credit checklist when prepping for the | more...

April 9, 2021

Why Loan Applications Are Denied

By Joe Wallace

What makes a borrower worthy of home loan approval? A history of on-time payments, a low debt ratio, and good credit scores all work together to get you home loan approval. But what gets you denied a mortgage? Reasons For An FHA Loan Rejection Your lender is required justify approving a home loan. There are three things the lender will review (among others): Verify that you have sufficient income for the monthly mortgage obligation; Determine that the borrower can afford existing debt and the new mortgage payments Ensure the applicant has a history of responsible credit use. What factors contribute to the lender’s decision when reviewing these three areas? We’ll explore them below. Credit Scores Matter On paper, FHA loan rules allow loan approval for borrowers with FICO scores between | more...

March 30, 2021

What Can Kill An FHA Home Loan?

By Bruce Reichstein

Those who want a home loan have to prepare for the new loan application in several ways–financially, through saving up for the down payment and closing costs, and with credit prep. That can mean working on your record of on-time payments, lowering your overall debt amounts, and avoiding new credit in the meantime. When applying for any large line of credit, there are some things that can stop your loan dead in its tracks. If you want a home loan and are worried about being approved for a home loan, add these issues to your mental not-to-do checklist and make sure you know how to avoid them. Avoid New Debt Your lender pulls your credit when you apply for your home loan–most people know that. But not as many know | more...

March 8, 2021

Home Loan Approval And Your Credit Scores

By Joe Wallace

It doesn’t matter if you want to buy a single-family home in a rural area or a condo unit in a busy metropolis; if you don’t understand your credit report or know your credit score, you aren’t ready to financially commit to a home loan. In order to buy a home, consumers have to become credit-literate. That means knowing how credit reports work, how to interpret credit scores, and how your credit report affects your ability to be approved for a loan. There are three major credit reporting agencies, Equifax, TransUnion, Experian. That is one reason why we encourage borrowers to check their credit reports as early as possible prior to applying for an FHA mortgage or any other major line of credit. You may have to dispute an error | more...

February 19, 2021

FHA Loans: The Credit Check

By Joe Wallace

FHA loan rules in HUD 4000.1 give instructions to the lender on how to establish an FHA borrower’s creditworthiness. FHA loan rules tend to be more flexible on credit issues than their conventional equivalents, but borrowers are still required to financially qualify. Are you looking for a condo loan, a mobile home loan? There’s an FHA loan for that. Do you want to build a house on your own land with an FHA construction loan? Some don’t realize the credit requirements in the FHA Lender’s Handbook are identical. For construction loans, borrowers should expect slightly higher credit requirements from the lender. But on paper, FHA loan rules make no distinction between different loan types and the minimum FICO score needed to qualify for maximum financing. One area that is also | more...

One Time Close Mortgage Loans: The Base Home Sales Price

December 11, 2020

One-Time Close Mortgage Loans: Which Is Right For You?

By Bruce Reichstein

A One-Time Construction loan provides a single loan for building a home from the ground up. You don’t have a construction phase loan and a mortgage loan to apply for separately when you use a One-Time Close mortgage. There are VA One-Time Close construction loans, FHA One-Time Close mortgages, and USDA versions of the same loan. Which one is right for you? USDA construction loans are need-based loans; household income limits and other requirements apply. Some borrowers will need a USDA loan while others may not qualify because the earn too much per household or because of other applicable factors. VA mortgages in general are a huge advantage–and the VA One-Time Close mortgage is no exception–because eligible and qualified borrowers are able to apply for this loan with no down | more...

November 23, 2020

Bad Credit Home Loans

By Joe Wallace

You’ll find a lot of information on the internet about bad credit home loans. Lists of bad credit-friendly lenders abound, but what do you need to know about these home loans and their alternatives? The first thing to remember is that bad credit is a potential barrier to new credit for a reason–your lender is required to justify the loan and make sure you are a good credit risk. And if your credit scores and credit history show that you haven’t been as reliable about making on-time payments and meeting your credit obligations? Your lender has two options. One is to deny you the loan. This is what usually happens in cases where the lender cannot justify approving your loan due to credit issues. Each lender has their own standards | more...