Articles Tagged With: Credit Check

February 22, 2018

FHA Loan Credit Requirements And Your Credit Scores

FHA loan credit requirements state that the lender must pull your credit information and credit scores to review a borrower’s credit worthiness. But if you are applying for an FHA loan you likely have three credit scores the lender must contend with. Borrowers often want to know how the lender views these three scores-they can be different from one another depending on circumstances-and which of multiple credit scores is actually used to process your home loan. The rules for FHA credit score requirements are found in HUD 4000.1, the FHA loan handbook. Credit scores must come directly from the three credit reporting agencies and cannot be submitted or transmitted to the borrower or another third party then submitted to the lender. Your credit scores must come from the source. FHA | more...

February 21, 2018

FHA Mortgage Loans: Credit History Counts

By Joe Wallace

When it comes to FHA mortgage loans, or any major line of credit, your credit history counts. Some might focus on the FICO score, but the numbers you get off your credit report are not the only credit qualifications needed to successfully apply for an FHA mortgage. Credit Report Data: The Big Three Many people use the phrase “Big Three” to refer to the three credit reporting agencies themselves; Equifax, Experian, and TransUnion. But here, we’re referring to the Big Three on your credit report itself. Your credit score, credit history, and the amount of credit you carry. The Big Three credit factors all count towards your potential loan approval or denial. Why? The lender is required to establish that you are a good credit risk for the loan. Your | more...

February 7, 2018

Can I Get An FHA Loan With A Collection In My Credit History?

By Joe Wallace

Can I get an FHA loan with a collection in my credit history? The answer can be complex since no two credit histories are alike, but there are some general guidelines that can help you understand where you might be in terms of the ability to get a home loan approved even with a collection in your credit record. It should be understood that what follows are the FHA guidelines for the loan approval process in terms of dealing with a credit issue; lender standards may also apply (and often do) above and beyond these rules. HUD 4000.1 has the rules for lender requirements when processing a loan with collections in the borrower’s credit history. The rules start out by describing what the FHA considers a “collection”. “A Collection Account | more...

FHA Home Loan Credit Score Requirements: FICO Scores And More

January 10, 2018

FHA Home Loan Credit Checklist

By Joe Wallace

There’s more than one kind of checklist that can help you in the FHA home loan process. There’s an overall mortgage checklist that helps people prepare for closing, but what about in the planning stages when you’re trying to review your credit to insure you are as credit-worthy as possible? Making a checklist specifically to review and prepare your credit is a very good idea, and you can get started with the following steps below. Making an FHA Home Loan Credit Checklist There are three very important areas to keep in mind when making a credit checklist; past credit performance, future credit activity, and the possibility of identity theft and/or outdated information on your credit report. Don’t overlook any of these areas, and be sure to develop a strategy for | more...

December 21, 2017

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

By Bruce Reichstein

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...

What You Should Know About FHA Home Loan Credit Checks As A First-Time Home Buyer

December 11, 2017

FHA Home Loans In 2018

By Joe Wallace

Any potential borrower examining options for FHA home loans in 2018 should keep in mind some very important factors that may affect your choices for a new loan. Do you know what they are? FHA Mortgage Loan Limits Have Increased for 2018 The average housing market (not a high-cost or low-cost area) will feature an FHA loan limit of $453,100 for a single-unit property. That is up from 2017’s limit for the same areas of $424,100. That increase might not make a huge difference to some, but the additional borrowing power may be helpful to others. The higher FHA loan limit applies to all FHA mortgages with case numbers assigned between January 1, 2018 and December 31, 2018. Check Your Credit Scores As Early As Possible There were many headlines | more...

November 14, 2017

Do First Time Home Buyers Have Different FHA Loan Requirements?

By Joe Wallace

Do first time home buyers have different FHA loan requirements? This question is tricky because it’s easy to forget that there are FHA loan requirements but lender standards, state law, and other factors will also have a say in how your home loan is handled. What follows is a discussion about FHA loan program requirements-you may find that your chosen participating lender has additional rules and procedures which also must be followed. FHA Home Loans Are Not Just For First-Time Home Buyers The FHA home loan program is not specifically designed for one type of borrower. That means that borrowers across a diverse range of home owning experience, income brackets, and careers may be eligible for an FHA mortgage, refinance loan, or reverse mortgage. The fact that you have owned | more...

Five FHA Home Loan Questions To Ask Your Lender

November 1, 2017

What Do I Need To Get FHA Loan Approval?

By Bruce Reichstein

What do I need to get FHA loan approval? There are several areas that will factor into the lender’s decision to approve the loan, including credit history, time spent working overall, and the dependability of your income. In addition to your credit, employment, and other issues, the property itself must meet FHA loan standards. As you can tell, the issue of FHA loan approval is one that requires some planning and research for you as well as the lender. FHA Loan Approval Is Based On Financial Qualifications Where the borrower herself is concerned, getting an FHA loan approval hinges on three basic things. One is your current ability to afford the loan. Another is your past credit activity and your record as a good credit risk. And the third area | more...

October 27, 2017

What Are The Lender Requirements For An FHA Loan?

By Bruce Reichstein

What are the lender requirements for an FHA loan? The answer to that question varies depending on the lender, but in general there are many areas the lender will examine to determine if you are able to afford an FHA home loan. FHA Lender Requirements For Employment And Income The FHA loan handbook, HUD 4000.1, requires your chosen participating FHA lender to verify your most recent two years of employment history. Those two years do not have to be with the same employer, but the lender will be looking for patterns of reliability where income and employment are concerned. The lender wants to know that your current income is stable, reliable, and likely to continue. FHA loan rules provide for the fact that not all income is employment-based. You cannot | more...

October 12, 2017

Am I Eligible For An FHA Loan Even Though I Have Had Credit Problems?

By Bruce Reichstein

Am I eligible for an FHA loan even though I have had credit problems? Borrowers often worry their credit scores or credit history aren’t good enough to qualify for an FHA mortgage loan, but what is the reality? What do FHA loan rules say about credit and your ability to borrow? FHA Loans For Borrowers After Bankruptcy FHA home loans are possible for those who have a bankruptcy on their credit history, but there is a mandatory waiting period and the duration of that wait depends on the nature of your filing. The mandatory waiting period begins when the bankruptcy is discharged, NOT when it is initially filed. FHA Loans For Borrowers After Foreclosure, Deed-In-Lieu Of Foreclosre, Or Short Sale Borrowers with foreclosure or short sale activity on their credit | more...