Articles Tagged With: Credit Requirements

the importance of credit for home loan approval

August 12, 2020

The Importance Of Your Credit For Home Loan Approval

Why is credit monitoring, credit repair, and credit utilization so important for the purposes of getting a home loan approved? This is a serious question all borrowers should ask ahead of their loan application. It’s just as important to know the hows and whys of addressing your credit scores and history–and the question should be addressed long before applying for a major line of credit like a construction loan to build on your own land, or the purchase of a condo or suburban home. A participating FHA lender is required to make each loan applicant can realistically afford the home loan. For loan approval, your credit history must have patterns that indicate that you will pay on time and generally behave like a good credit risk. Approving a home loan | more...

July 10, 2020

FHA Cash-Out Refinance Loans: What You Need To Know Today

By Joe Wallace

Are you looking at the current low mortgage loan interest rates and wondering about your cash-out refinance loan options? If you are a homeowner looking for an FHA cash-out loan, you should know that you don’t have to have an existing FHA mortgage to refinance a loan with an FHA cash-out loan. No matter which type of home loan you are looking to refinance, there are rules and requirements you should know–some refinance loan options are better than others depending on the purpose of your loan. Rehab And Refinance For example, some borrowers want to rehab a home while refinancing it–there is a separate FHA refi loan for that purpose, though the loan proceeds from the FHA 203(k) Rehabilitation Refinance loan can only be used for approved purposes where cash-out | more...

July 3, 2020

FHA Home Loan Credit Score Requirements: FICO Scores And More

By Joe Wallace

Many borrowers worry about their credit scores ahead of an application for an FHA home loan, and it’s hard for some to gauge whether they have sufficient credit to get a loan approved. FHA loans have more forgiving credit requirements and borrowers should not assume they do not qualify for a home loan without discussing their circumstances with a participating lender. When is a low credit score too low? FHA home loan rules specify that the lender must ensure a 500 FICO score (the very minimum) in order to qualify for an FHA mortgage, but your credit score numbers don’t tell the whole story. Lender Requirements For Home Loan Approval Vary You may read that FHA loan rule minimums for FICO scores do not always reflect the participating lender’s credit | more...

June 22, 2020

Why You Should Monitor Your Credit As A First-Time Home Buyer

By Joe Wallace

Are you a first-time home buyer interested in buying or building a home? New borrowers should monitor their credit for signs of identity theft, erroneous information, and outdated credit data; doing so improves your chances at home loan approval by ruling out issues that may be related to credit report problems that are not your fault. Some future homeowners already pay strict attention to their credit, but not everyone does. And they should–credit monitoring should play a crucial part of your preparation stages before applying for an FHA mortgage. The principles we are talking about here can protect you when applying for any big loan, including cash-out refinancing. Regular Monitoring Eliminates Surprises Later Having regular updates about your credit report reduces the chances of something slipping through–errors or evidence of | more...

June 9, 2020

Does Credit Monitoring Hurt Your FICO Score?

By Bruce Reichstein

Credit monitoring is an important service. Many borrowers don’t know what their FICO scores are when first starting out, and it is easy to be surprised by outdated or erroneous information on your credit file if you don’t look at it frequently enough. Do you know what your credit reports say about you? Your credit activity including the most recent events can sometimes make or break a credit application. Too many recent applications for credit is one problem, another may be too much of the wrong kind of credit (junk credit cards, payday loans, etc.) The reason for credit monitoring has a lot to do with protecting your identity from fraudsters and thieves, but many people have never even seen a credit report, let alone understand what is in them. | more...

June 8, 2020

Do You Know How To Dispute Your Credit Reports?

By Joe Wallace

Do you know what it takes to dispute a problem on your credit reports? If you don’t know the contents of your credit report, or how to dispute your report, you may encounter trouble at loan application time. Are you a potential home loan applicant in planning stages of your home loan? It is very important to look at your credit reports and review the contents. If you have never seen your credit report before, you are not ready to fill out a home loan application. Review Your Credit Reports Now Disputing your report doesn’t happen overnight–you need time to dispute inaccurate or outdated information that may be on your credit report. And entries in your credit file that point to you being a victim of identity theft? That can | more...

June 2, 2020

Credit Reports and Accuracy In Credit Reporting For Your Home Loan

By Joe Wallace

Do you know what your credit report says about you right now? If not, you aren’t truly prepared for your home loan application and may learn the hard way about issues on your credit report including identity theft, reporting errors, etc. If you have not looked at your credit reports, you should not fill out loan paperwork; there are many issues that can affect your mortgage loan application and they are directly related to the contents found in your credit file. Three Credit Reporting Agencies, Three Separate Credit Reports Don’t assume you can just pull a single credit report–consider what all three of the major credit reporting agencies have in their files in your name. These agencies do not share information, which makes it more important for you, the future | more...

April 29, 2020

Protect Your Credit With Free Weekly Credit Reports Until 2021

By Joe Wallace

COVID-19 has created an economic situation that has forced millions into unemployment, and literally millions of home loans are now in forbearance. Those who act to protect their home loans early have the most options, but even for those late to the process, catching up on home loan payments, cutting back on new credit use, and other measures can help soften the economic blow in the long run. Coronavirus outbreak containment measures, while absolutely necessary, have put a massive strain on the economy. Now, more than ever, knowing your credit report is essential, especially if you have plans to buy a home in the near to mid-term future. Credit will likely be harder to come by in the coming months. borrowers who understand the importance of this will be pulling | more...

April 7, 2020

Protect Your Credit Score During The Coronavirus Outbreak

By Bruce Reichstein

The economic effects of the coronavirus / COVID-19 are being felt in every sector of the American economy, including the real estate market and the housing industry. With trillions of dollars in economic stimulus promised, but in various stages of delivery (or non-delivery as the case may be), Americans are still facing economic pain that may not have a short-term fix. In spite of that uncertainty, one thing remains clear. Consumer credit scores are going to have a lot more weight in the credit approval decision process in the days following the peak of the coronavirus emergency in America. It’s going to take time to begin a full move toward recovering from the crisis, but those who take steps now (and later) to protect their credit will fare better than | more...

February 20, 2020

FHA Home Loans For Borrowers With Thin Credit

By Bruce Reichstein

Some borrowers worry their FICO scores aren’t high enough to be approved for a home loan. Other borrowers worry that they don’t have a long enough credit history. There are ways you can raise your FICO score, increase your credit file, and make yourself a better credit risk for an FHA home loan, FHA rehab loan, or even a construction loan to build your own house on your own lot. If you apply for a home loan with thin credit non-traditional credit or no credit, your lender will ask for any evidence you have made recurring payments of some kind. That’s a good place to start when it’s time to review your credit. Your lender will want to see that for any financial obligation you do carry, that on-time payments | more...