Articles Tagged With: FHA

April 22, 2025

What One Credit Reporting Agency Says To Do About Your Credit Scores

Your credit report and credit score are important factors in home loan approval. So what advice do the credit reporting agencies like Equifax, Experian, and TransUnion say you should do when planning to apply for a home loan? Knowing what credit score advice these three agencies offer is important–it’s good to think like a lender when applying for a large line of credit, and it is even better to think like the credit reporting agency in terms of what to do to prepare your credit ahead of your loan. What does Experian say about getting your credit ready for a home loan? Their official site reminds consumers that credit scores are an important aspect of home loan approval. However, those scores do not tell the entire story. Experian reminds us | more...

December 19, 2024

Bad Credit And FHA Home Loan Options

By Joe Wallace

The term “bad credit” tends to feel a bit stigmatizing. Borrowers who have had past difficulty with credit have it hard enough trying to recover from the stigma of their previous credit issues without being confronted by those problems every time they want to start working on their credit. Is there such a thing as a bad credit FHA loan that can help people become homeowners and get a fresh start with credit? Technically the answer is, “it depends”, which isn’t very reassuring. But the truth of the matter is, there are FHA standards that technically make the concept of a bad credit mortgage a reality. After all, on paper FHA loan rules state that a borrower with FICO scores in the 500 range could still technically qualify for an | more...

November 7, 2024

Will Your FHA Home Loan Be Approved?

By Joe Wallace

Will your FHA home loan be approved or denied? There are several reasons why your loan application could be turned down, and some of those reasons have more to do with the property than with the borrower’s credit history or FICO scores. And in some cases, getting turned down for a mortgage is the borrower’s fault due to credit history or FICO score issues. But what about when the borrower’s credit, employment, and other qualifying factors are acceptable to the lender, but the home loan application is turned down anyway? For some, it could be a question of the property’s condition, location, or type. Location Counts Some don’t realize at first that to be approved for an FHA residential home loan, the property cannot be situated within a specific range | more...

October 18, 2024

When Can I Refinance An FHA Loan?

By Bruce Reichstein

When can I refinance an FHA loan? That is a common question and one that is addressed in the FHA loan handbook, HUD 4000.1. There are rules that govern how and when you can refinance your home loan and those rules will vary depending on the type of refinance loan you seek. Most FHA home loans, including refinance loans and even reverse mortgages, require occupancy as a condition of loan approval. In the case of FHA Cash-Out Refinance loans, occupancy is necessary for at least one year before the new loan. From HUD 4000.1: “Cash-out refinance transactions are only permitted on owner-occupied Principal Residences. The Property securing the cash-out refinance must have been owned and occupied by the Borrower as their Principal Residence for the 12 months prior to the | more...

September 26, 2024

FHA Home Loans: Why You Want To Haggle With The Seller

By Bruce Reichstein

Many first-time home buyers hate the idea of negotiating, haggling, or otherwise trying to adjust the price of the home with a seller. In a seller’s market there’s not much negotiating possible, it’s true. But when conditions are more favorable for the borrower, negotiating may be to your advantage. Why Should A First-Time Home Buyer Be Willing To Negotiate With The Seller? The most apparent reason to haggle with the seller of the real estate you want is to get a lower price. This becomes even more crucial if the appraisal comes back lower than the property’s asking price. The buyer cannot be forced to close the deal in cases where the home’s appraised value is lower than the asking price. The FHA home loan itself will be issued for | more...

September 10, 2024

Bankruptcy Versus FHA Loan Approval

By Joe Wallace

Declaring bankruptcy, either Chapter 7 or Chapter 13, impacts your credit standing. Though it might be a necessary financial step, it disrupts your normal financial activities, including getting a mortgage. But is declaring bankruptcy the end of your ability to buy a new home? Not necessarily. Thanks to “seasoning periods” a borrower waits out after bankruptcy to be declared fit to borrow to buy a home, bankruptcy doesn’t permanently bar you from buying a home. Before discussing the waiting periods for mortgage loans, let’s differentiate between Chapter 7 and Chapter 13 bankruptcies: Chapter 7 Bankruptcy This involves liquidating your non-exempt assets to pay off creditors. While it provides a quicker resolution, it can negatively affect your credit score for up to a decade. Chapter 13 Bankruptcy This allows those with | more...

August 15, 2024

Fixing Credit Before Buying A Home

By Joe Wallace

When preparing to buy a house, it’s essential to give yourself plenty of time to improve your FICO scores and ensure a strong history of on-time payments before applying for a mortgage. However, there are other crucial aspects of credit repair to consider. To begin a credit repair journey, it helps to understand how credit reporting procedures work. Credit reports, which are compiled by major credit bureaus like Equifax, Experian, and TransUnion, contain comprehensive records of your credit history. This includes your private data, such as your current and former addresses, Social Security Number, and information on your credit accounts. There may also be information in your credit file from public records. Do you have a bankruptcy in your past? That will show up on your report along with any | more...

August 6, 2024

Credit Repair And FHA Mortgages

By Joe Wallace

Resolving outstanding debts and making timely payments can gradually boost your credit score. The Consumer Financial Protection Bureau recommends creating a budget and prioritizing debt repayment to regain financial stability. It’s also vital to monitor your credit reports aggressively at least 12 months before applying for a home loan. Knowing your rights when dealing with credit repair companies is essential. The Credit Repair Organizations Act (CROA) ensures transparency in credit repair services and prohibits deceptive practices. When it comes to home loans and your credit, lenders consider your FICO scores and review your payment history and overall credit record. It’s important to understand that FICO scores don’t necessarily reflect your entire credit story. To have a successful home loan application, maintain good payment habits for 12 months and avoid missed | more...

June 6, 2024

Home Loan Choices

By Bruce Reichstein

Every part of the home loan process has a set of choices to make. For most house hunters this process begins with the decision to own your own home and quit renting. What other choices await you on the road to homeownership? Interest Rate Options: Conventional, FHA, Fixed, Adjustable No matter which type of home loan you choose, VA, FHA, USDA, or conventional, you’ll need to decide whether to apply for a fixed or adjustable mortgage. The fixed-rate loan is good for those who need a predictable house payment for the full duration of the mortgage. Unless you refinance, the rate will not change. An adjustable-rate mortgage has an introductory period (typically at a lower rate) followed by periods of rate adjustments. FHA adjustable-rate mortgages may, for some borrowers, be | more...

May 2, 2024

Can You Lose Earnest Money With An FHA Mortgage?

By Joe Wallace

There are many different types of home loans, but most of them have one thing in common: the need to use home loan earnest money as a serious buyer. You don’t have to save or plan for earnest money when you are preparing for a home loan, but it is a bad idea not to, as we examine below. Earnest Money Defined Fannie Mae has an article on its official site discussing the nature of earnest money. That discussion includes the following: “Buyers demonstrate their commitment to purchasing a home by submitting an earnest money deposit. This money is held temporarily in an escrow account along with their offer.” NerdWallet.com also rings in, saying “Earnest money is a good-faith deposit you make on a home to show the seller you’re | more...