July 21, 2019

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Articles Tagged With: Credit History

The Difference Between FHA Loan Credit Score Requirements And Your Lender's FICO Score Rules

The Difference Between FHA Loan Credit Score Requirements And Your Lender’s FICO Score Rules

We answer many reader questions about FHA home loans, including information about credit requirements, appraisal issues, and FHA loan standards. Among the most common reader questions about FHA home loans? Questions about the credit scores required to get home loan approval. This issue is confusing to some borrowers because they don’t realize that FHA loan rules say one thing and lender requirements may say another. Is this a contradiction? No. The FHA loan credit score requirements should be viewed by the borrower as the minimum standard, with the knowledge that the lender is permitted to require higher FICO scores than the FHA’s minimums but NOT permitted to require LOWER scores than the FHA minimum. In other words, consider the FHA loan FICO score numbers as the baseline lowest scores permitted. | more...

 
What You Need To Know When Your Home Loan Lender Pulls Your Credit Report

What You Need To Know When Your Home Loan Lender Pulls Your Credit Report

Everyone who applies for a home loan should know the contents of their credit reports long before they start filling out FHA loan application paperwork. Just as important? Knowing what your loan officer is looking for out of your credit report. Did you know that FHA home loan rules published in HUD 4000.1 instruct the lender on specific areas of the report to examine? In fact, there are FHA loan standards for the credit report itself-the report must meet the following requirements in order to be used by the lender. The credit report must contain: the name of the FHA lender ordering the credit report; the name, address, and telephone number of the consumer reporting agency; the name and SSN of each Borrower; and the primary repository from which any | more...

 
FHA Home Loan Credit Issues: Collection Agencies

FHA Home Loan Credit Issues: Collection Agencies

Many borrowers want to know if they are still eligible for a home loan even if they have debts that were referred to a collection agency. Can a borrower still get an FHA mortgage if they have collection accounts listed on their credit report? The FHA rules governing this issue can be found in HUD 4000.1, which begins with the FHA definition of “Collection Accounts”: “A Collection Account is a Borrower’s loan or debt that has been submitted to a collection agency through a creditor. “ When the lender finds collection information listed on the credit report, it is not necessarily an automatic denial of the loan waiting to happen. FHA loan rules require the lender to review the information to make sure the borrower wasn’t simply disregarding the debt | more...

 
How To Prepare Your Finances For A Home Loan

How To Prepare Your Finances For A Home Loan

Do you know how to prepare your finances for a home loan application? There are several areas you should pay attention to before applying for an FHA home loan to buy real estate, and the are all equally important for loan approval. How To Prepare Your Credit Cards For A Home Loan Application Reduce your credit card balances as much as possible before applying for your home loan. Ideally your initial goals should be to get the balances below 50% of your credit limit, but your goal should also definitely include 100% on-time payments for a full year before you fill out a home loan application. How To Prepare Your Student Loans For A Home Loan Application You will, as a first-time home buyer or repeat borrower, hear again and | more...

 
Get A Free Credit Report Before Applying For An FHA Loan

Get A Free Credit Report Before Applying For An FHA Loan

Are you considering an FHA mortgage, FHA refinance loan, or even a reverse mortgage? It is important to take the right amount of time to prepare for your FHA loan before filling out the application and that means knowing what your credit report says long before you start the process. You want to know the contents of your credit report so you can make sure there is no identity theft, inaccurate information, or other problems. But many borrowers don’t know how to get copies of your credit report. You Can Get A Free Credit Report From All Three Major Credit Reporting Agencies Once Per Year All consumers are entitled to a free credit report every 12 months. This report is available from each of the three credit reporting agencies; Equifax, | more...

 
5 FHA Loan Rules You Should Know

5 FHA Loan Rules You Should Know

There are many rules and regulations that govern FHA home loans and knowing how the system works can save you time and money when you are ready to start the journey toward home ownership. Some borrowers may ask themselves if they are ready to buy a home; if you know some or all of the areas below you may be closer than you think. FHA Home Loans Require Occupancy You cannot buy a home with an FHA single-family home loan unless at least one person obligated on the loan will use the property as their primary residence. This occupancy requirement is non-negotiable and the borrower must take possession of the home within a reasonable time after closing, usually 60 days for existing construction home. Properties that require repairs (such as | more...

 
FHA Loan Credit Advice

FHA Loan Credit Advice

First-time home buyers and experienced home owners alike sometimes need help understanding what it takes to be approved for a major line of credit like an FHA home loan. What does it take to financially qualify for the mortgage and get on the road to home ownership? Buying real estate with an FHA mortgage means making a serious investment of time and money. And that usually begins with budgeting, saving, and working on your credit. Preparing your credit a year in advance or more is a very good way to prepare for the home loan application process. Why? Your lender needs to see at least 12 months of on-time payments on ALL financial responsibilities prior to your applying for the home loan. Anything less than this can hurt your chances | more...

 
Things That Keep You From Getting An FHA Mortgage

Things That Keep You From Getting An FHA Mortgage

What keeps some borrowers from getting an FHA home loan or refinance loan? In some cases the answers are easy, in others they are more complicated. Learn what some of the red flags are for lenders and prepare yourself to get the FHA home loan you need. Automatic Denial Of FHA Home Loans: When Does It Happen? FHA home loans are automatically denied for a variety of reasons. Borrowers with FICO scores lower than 500 are automatically denied, as are borrowers who have applied for a mortgage while they are in a bankruptcy that has not been discharged yet. U.S. citizenship is not required for an FHA home loan, but those who apply without legal standing of some kind (anyone in the country illegally) is automatically turned down for the | more...

 
The Difference Between Homeowner's Insurance And Mortgage Insurance

FHA Loans For First-Time Borrowers: Debt Ratios

One area that is just as important as FICO scores and credit reports to first-time borrowers? The amount of debt versus the amount of monthly income. This is known as a debt-to-income ratio or debt ratio for short; this is just as crucial for a borrower as their FICO scores. Many borrowers already know this; they have spoken to a lender or a housing counselor, or they have done their research already and fully understand that if you have too much outgoing debt and not enough monthly income, your home loan chances are in jeopardy. But what is not as well-known? The fact that there are actually TWO debt ratios the lender will look at. Yes, there are two calculations and if you don’t anticipate the second one you may | more...

 
FHA Home Loans: Things To Do, Things Not To Do

FHA Home Loans: Things To Do, Things Not To Do

FHA home loans, like all mortgages, represent a major investment for a borrower. There are things you should do in the FHA home loan process to get closer to loan approval, and there are things you should definitely NOT do as a new home buyer. Do you know what they are? FHA Loans: DO Work On Your Credit As Early As Possible Your FICO scores will determine the interest rate you are offered and the amount of the down payment required. It’s best to examine your credit report at least a year ahead of your loan application to make sure you have plenty of time to work on credit issues. FHA Home Loans: DO NOT Run Up More Debt Prior To Your Home Loan Opening new credit cards, adding more | more...