January 20, 2018

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Articles Tagged With: Credit Requirements

FHA-to-FHA Refinance Loan Rules

FHA-To-FHA Refinance Loan Rules

Do you know the loan rules for FHA-to-FHA refinance loans? There are many reasons why a borrower with an existing FHA mortgage could need or want to refinance. Some are interested in taking a portion of their home’ s equity in cash, others want lower monthly payments. Let’s examine the rules of FHA-to-FHA refinance transactions. How the FHA Defines Refinancing The rules governing FHA-to-FHA refinancing are found in a section of HUD 4000.1, the FHA loan handbook. It defines FHA refinance loans as follows: “A Refinance Transaction is used to pay off the existing debt or to withdraw equity from the Property with the proceeds of a new Mortgage for a Borrower with legal title to the subject Property.” There are a variety of FHA loan options when you are | more...

 
Bad Credit Scores And FHA Home Loans

What Credit Score Do I Need To Get A Home Loan?

What credit score do I need to get a home loan? That is a question many FHA loan applicants ask, and the answer involves both FHA loan rules in HUD 4000.1 (the FHA loan handbook) and lender requirements. What You Should Know About FHA Loan Standards FHA loan rules for credit and FICO scores are minimum requirements, but your participating FHA lender may have additional requirements. Always remember that FHA loan rules provide the baseline requirements, but the lender may have higher FICO score and credit history standards. What we’re discussing here are the FHA rules, lender requirements will vary. The FHA “Minimum Decision Credit Score” (MDCS) HUD 4000.1 defines the FHA MDCS as follows: “The Minimum Decision Credit Score (MDCS) refers to the credit score reported on the Borrower’s | more...

 
FHA Home Loan Basics In 2018

FHA Refinance Loan Options

Are you considering your FHA refinance loan options in 2018? There are several different options to choose from depending on your financial needs and goals. What do you want to do with an FHA refinance loan? Lower Your Monthly Mortgage Payments There are FHA refinance loan options that can help lower your interest rate or monthly payments, depending on circumstances. Some borrowers with non-FHA loans want to refinance into an FHA mortgage because of potentially lower interest rates. This is often done with an FHA no-cash out refinance loan option. Whether you will get lower monthly payments on an FHA no-cash out loan depends on several factors including your credit scores, the current amount you are paying on a home loan, and whether you choose to finance certain expenses associated | more...

 
FHA Loan Questions: Credit, Bank Statements, and Overdrafts

FHA Loan Questions: Credit, Bank Statements, and Overdrafts

Here is a variation on a common question about FHA home loan requirements: “How many months of bank statements are required to show the underwriters in relevance to the month we are closing on the house? Also if there are NSF/overdrafts on our account three to six months prior to our closing month, will that hurt our chances of getting the loan?” To answer these questions properly we need to do some detective work in the FHA loan rule book. Let’s start with the age of the documents needed for a home loan. The rules that govern FHA home loans says all documents must be, in general, no older than 120 days. The lender’s standards may apply in such cases-will the lender require more bank statements in order to review | more...

 
Can Disaster Relief Grants Be Used As Money To Close An FHA Loan?

Do FHA Loan Requirements Change Each Year?

Do FHA loan requirements change each year? This area can be a bit confusing because some aspects of the FHA loan program have changed in recent years, and some things are updated on a yearly basis. But the basic structure of the FHA loan program including FICO score minimums, appraisal rules, and occupancy requirements? These do not change from year to year. Do FHA Loan Rules Are In HUD 4000.1 Change Annually? HUD 4000.1 is the FHA Single Family Home Loan Handbook. It contains all the basic rules and requirements for FHA home loans. It lists the FICO score requirements, loan repayment history rules, debt-to-income ratio guidelines and other issues that affect FHA loan approval. These requirements do not change from year to year, but are subject to revision based | more...

 
How FHA Maximum Mortgage Amounts Are Calculated

How Do FHA Loan Requirements Work?

How do FHA loan requirements work? Do you know what you need in order to qualify for an FHA mortgage loan or FHA refinance loan? There are important details you should know about FHA mortgage loans that can help you make an informed decision about applying for one. FHA Loans Feature Lower Down Payment Requirements FHA loan down payment requirements include a minimum 3.5% down based on the adjusted value of the home. You won’t be able to get a zero-down payment FHA mortgage unless you are a qualified borrower applying for an FHA 203(h) mortgage for disaster victims in a federally-declared disaster area. 3.5% down is the minimum cash investment required. Some borrowers with low FICO scores may be required to put down 10% depending on their scores, lender | more...

 
Do I have to pay off collection accounts to qualify for an FHA home loan?

Do I Have To Pay Off Collection Accounts To Qualify For An FHA Home Loan?

Do I have to pay off collection accounts to qualify for an FHA home loan? That’s a question on the mind of anyone who has a collection agency action in their credit history. What does the FHA have to say about this issue? On the FHA official site, there is a Frequently Asked Questions section that directly addresses this potential problem for loan applicants nervous about issues in their credit report. It begins with a definition of the phrase “collection account”: “A Collection Account refers to a Borrower’s loan or debt that has been submitted to a collection agency by a creditor.” FHA loan rules address collection accounts in the amount of $2000 or more: “If the credit reports used in the analysis show cumulative outstanding collection account balances of | more...

 
Credit Score Issues and FHA Loans

Credit Score Issues and FHA Loans

Do you know how credit score issues affect your FHA home loan application? For most borrowers, there’s no such thing as a new purchase loan with no credit check; The FHA loan handbook (HUD 4000.1) instructs the lender that credit score checks for FHA mortgage loan applications are mandatory except in certain instances such as for FHA Streamline Refinance loans, and other transactions as described on page 158: “The Mortgagee must review the credit report to determine the Borrower’s Minimum Decision Credit Score (MDCS), except for Mortgages to be insured under Section 247, Section 248, Streamline Refinances, and Assumptions. The MDCS will be used to determine the maximum insured financing available to a Borrower with traditional credit.” HUD 4000.1 adds that FHA loan applicants who have non-traditional or insufficient credit | more...

 
What Is The Interest Rate For FHA Refinance Loans?

How Does My Credit Score Affect My FHA Mortgage Loan?

How does my credit score affect my FHA mortgage loan? There are several areas where FICO scores may affect how much a borrower pays including interest rates, down payment issues, and more. FHA Loan Credit Score Rules: Two Standards There are two basic sets of rules and requirements governing borrower credit scores. One set of rules is found in HUD 4000.1, and gives the FHA Single Family Home Loan program minimum requirements for credit scores and how they affect a borrower’s down payment requirements. The other set of rules and regulations are those of the individual participating lender. Your chosen lender may have higher standards than FHA minimums, and this is permitted by law as long as those higher standards conform to Fair Housing Act policies and other federal regulations. | more...

 
FHA Loan Waiting Times After Chapter 13 Bankruptcy

FHA Loan General Credit Requirements

Do you know what the general credit requirements are for FHA mortgage loans? Outside of FHA loan FICO minimums (580 or above for maximum financing according to HUD 4000.1, though lender standards may apply beyond this) and employment history, there are a set of standards listed in the FHA loan handbook. Those standards include instructions to the lender on how credit is to be analyzed and how credit data may be collected. Those standards include the requirement that a participating FHA lender must “analyze the Borrower’s credit history, liabilities, and debts to determine creditworthiness.” In the pursuit of this, the lender must get credit reports from “an independent consumer reporting agency”. The lender “must obtain a credit report for each Borrower who will be obligated on the mortgage Note. The | more...