March 11, 2022
There is a lot of advice out there about starting early when it’s time to plan and save for your mortgage.
When you are preparing for an FHA loan application you naturally want to check your credit, pay your bills on time, and reduce your credit card use. But even when you are busy with taking care of these things, there may be issues that can complicate the home loan process.
Knowing these issues can help you navigate them if there is one that applies to you. It’s easy to assume you don’t have a hidden problem waiting to slow do your home loan process, but some of these issues are a surprise to future borrowers and they spend additional time sorting them out.
Do You Owe Any Tax Liens?
For someone who has lived in the same place for a long time, it would be tough to miss a notification about unpaid back taxes.
But if you have moved frequently such an issue may take longer to catch up with you if you aren’t aware of it already. You may need to call your state or local Department of Revenue to see if there is a lien you need to take care of before you apply for the loan.
Are You Waiting For A Bankruptcy To Discharge?
It is true that after waiting out a minimum period of time after bankruptcy you are able to seek a home loan once more.
FHA mortgage loan rules in HUD 4000.1 state that the minimum time may be affected by the nature of the bankruptcy and other factors but the most important takeaway here is that your waiting time begins on the date the bankruptcy was discharged and NOT the date it was filed.
Some misunderstand this concept and may miscalculate the remaining time left they have to wait.
Do You Have Any Identity Theft Issues?
People are encouraged frequently to check their credit reports for evidence of identity theft. But what about the kinds of identity theft that might not even show up on a credit report?
By this, we’re talking about situations where your debit or credit card number has been used to set up recurring payments you don’t know about. People often discover these by accident and must begin a dispute process with the card issuer. Why could this be a problem when it’s time to apply for a home loan?
Debt-to-income ratio issues. Some borrowers worry that their outgoing debt is almost, but not quite high enough to cause a problem when applying for new credit.
In cases where this is true, any fraudulent use of your credit cards could reflect a debt ratio that isn’t truly accurate because of the unauthorized use of your credit.
Learn About the Path to Homeownership
Take the guesswork out of buying and owning a home. Once you know where you want to go, we’ll get you there in 9 steps.
Step 1: How Much Can You Afford?
Step 2: Know Your Homebuyer Rights
Step 3: Basic Mortgage Terminology
Step 4: Shopping for a Mortgage
Step 5: Shopping for Your Home
Step 6: Making an Offer to the Seller
Step 7: Getting a Home Inspection
Step 8: Homeowner’s Insurance
Step 9: What to Expect at Closing
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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