Articles Tagged With: Credit Check

July 30, 2021

What You Need To Know About FHA Home Loan Credit Checks

What do first-time home buyers need to understand about the credit check process for getting an FHA mortgage? There are many variables but one thing you can do to get a better understanding of what it takes to be approved for a loan is to start trying to think like a loan officer–their job depends on making sure that you are a good credit risk. How can you help the lender help you? What you don’t know can hurt you in the journey toward buying that first piece of real estate. Before you begin working with a realtor, you should know several things about the credit check process. Credit is a major part of home loan approval and you want to be able to convince your lender you are ready | more...

Construction Loans For First-Time Home Buyers

June 18, 2021

Planning Your One-Time Close Construction Loan

By Bruce Reichstein

Some FHA loan applicants do not realize they have the ability to apply for a One-Time Close mortgage that lets the borrower build a home on their own lot instead of buying an existing construction home. The FHA One-Time Close (OTC) construction loan, like its’ VA construction loan counterpart, is a loan backed by the government that allows the borrower to apply for a single mortgage loan to cover both the costs of construction of a home from the ground up and the purchase of the home. This is offered as an alternative to construction loans that require two loan applications (one for construction, one for the completed home) and two closing dates. OTC Loans Have The Same Down Payment Requirements As Other FHA Loans The One-Time Close loan avoids | more...

June 17, 2021

FHA Loan Minimum Credit Scores: Tips That Can Help You

By Joe Wallace

Are you concerned that your FICO score isn’t high enough to meet the minimum credit scores for the lowest down payment possible on an FHA home loan? On paper, FHA loan minimums for credit scores begin at 580 or better to qualify for the lowest down payment. Your participating lender may require a higher score but in general FICO score requirements for FHA home loans may be more competitive than some conventional equivalents. There is some good credit score advice should you take ahead of your home loan–it starts with pulling your credit reports to see what’s lurking in there, then checking your credit often and monitoring it. Being told to check your credit report is obvious advice. You will find that in just about any credit repair article. But | more...

May 24, 2021

Credit Building For First-Time Home Buyers

By Joe Wallace

Are you interested in buying your first home but aren’t sure how to improve or build up your credit to give yourself a better shot at home loan approval? FHA mortgages have more lenient credit approval requirements than conventional mortgages but even those applying for FHA mortgages need to ensure their credit scores are in an acceptable range for the most affordable home loan possible. In some cases it is a good idea to consider applying for smaller credit first. This may be in the form of store credit cards or similr lines of credit. But what should a new borrower know about doing so? Building credit takes time and patience–it is unrealistic to expect results in a few weeks or even a few months. If you have never applied | more...

May 13, 2021

Get Your Credit Ready For A Mortgage

By Joe Wallace

Do you want to buy or build a home? Before you apply for a mortgage loan there are some steps to take in the planning stages to get you closer to loan approval. Checklists can be important tools when making the preparations you need before you apply for a home loan; purchasing a home is one of the most important investments you can make; you’ll have an easier time in the process if you are organized. You will want to start preparing this checklist long before you are ready to fill out paperwork to apply for the mortgage or to get pre-approved. This is a process that should begin, at a minimum, 12 months ahead of your application. What should you put on a credit checklist when prepping for the | more...

April 9, 2021

Why Loan Applications Are Denied

By Joe Wallace

What makes a borrower worthy of home loan approval? A history of on-time payments, a low debt ratio, and good credit scores all work together to get you home loan approval. But what gets you denied a mortgage? Reasons For An FHA Loan Rejection Your lender is required justify approving a home loan. There are three things the lender will review (among others): Verify that you have sufficient income for the monthly mortgage obligation; Determine that the borrower can afford existing debt and the new mortgage payments Ensure the applicant has a history of responsible credit use. What factors contribute to the lender’s decision when reviewing these three areas? We’ll explore them below. Credit Scores Matter On paper, FHA loan rules allow loan approval for borrowers with FICO scores between | more...

March 30, 2021

What Can Kill An FHA Home Loan?

By Bruce Reichstein

Those who want a home loan have to prepare for the new loan application in several ways–financially, through saving up for the down payment and closing costs, and with credit prep. That can mean working on your record of on-time payments, lowering your overall debt amounts, and avoiding new credit in the meantime. When applying for any large line of credit, there are some things that can stop your loan dead in its tracks. If you want a home loan and are worried about being approved for a home loan, add these issues to your mental not-to-do checklist and make sure you know how to avoid them. Avoid New Debt Your lender pulls your credit when you apply for your home loan–most people know that. But not as many know | more...

One Time Close Mortgage Loans: The Base Home Sales Price

December 11, 2020

One-Time Close Mortgage Loans: Which Is Right For You?

By Bruce Reichstein

A One-Time Construction loan provides a single loan for building a home from the ground up. You don’t have a construction phase loan and a mortgage loan to apply for separately when you use a One-Time Close mortgage. There are VA One-Time Close construction loans, FHA One-Time Close mortgages, and USDA versions of the same loan. Which one is right for you? USDA construction loans are need-based loans; household income limits and other requirements apply. Some borrowers will need a USDA loan while others may not qualify because the earn too much per household or because of other applicable factors. VA mortgages in general are a huge advantage–and the VA One-Time Close mortgage is no exception–because eligible and qualified borrowers are able to apply for this loan with no down | more...

November 23, 2020

Bad Credit Home Loans

By Joe Wallace

You’ll find a lot of information on the internet about bad credit home loans. Lists of bad credit-friendly lenders abound, but what do you need to know about these home loans and their alternatives? The first thing to remember is that bad credit is a potential barrier to new credit for a reason–your lender is required to justify the loan and make sure you are a good credit risk. And if your credit scores and credit history show that you haven’t been as reliable about making on-time payments and meeting your credit obligations? Your lender has two options. One is to deny you the loan. This is what usually happens in cases where the lender cannot justify approving your loan due to credit issues. Each lender has their own standards | more...

November 18, 2020

Getting A Mortgage With A Low Credit Score

By Bruce Reichstein

Lots of potential home owners want to know if it is possible to get a mortgage with a low credit score. The answer to this kind of question may surprise you, but much depends on both FHA loan rules AND participating lender standards. What do you need to know to get started looking for a home loan with a low credit score? Start Working On Your Credit Today What some borrowers don’t understand is that there are things you can do in the planning stages of your home loan journey to improve credit scores and they are steps you do not have to pay someone else to do for you. One of the first of these is to pull your credit report from the three major credit reporting agencies Equifax, | more...