Articles Tagged With: Credit Check

August 30, 2021

FHA Loan Guidelines For Verifying Your Credit History

FHA loan rules have a lot to say about what the lender needs to look for to verify a potential FHA borrower’s creditworthiness. No matter if you are looking for a condo loan, a mobile home loan, or you want to build a house on your own land with an FHA construction loan, the requirements in the FHA Lender’s Handbook are identical. There are minimum FICO score requirements, instructions to the lender for reviewing the borrower’s record on-time payments (12 months of reliable payments on all financial obligations is strongly recommended), and much more. One area that is also covered in HUD 4000.1 is what the lender should do if collections are included in the borrower’s credit history. The presence of a collection action on a loan applicant’s record may | more...

August 17, 2021

Before You Apply For Your Mortgage Loan

By Joe Wallace

If you are concerned about your ability to qualify for a mortgage, before you get pre-qualified or pre-approved, it’s a good idea to add a few steps to your home loan prep checklist. These steps should be in addition to the usual things you need to do before you apply for the loan, seal pre-approval, approach a seller, or even start working with a real estate agent. One of those things is very important–you need to not only know the contents of your credit report (a Home Loans 101 type piece of advice) but also monitor your credit through the entire planning and purchase process of your home loan. Knowing your credit score is vital for a mortgage borrower and home buyer, but what happens if your credit report begins | more...

August 11, 2021

Questions To Ask About Your Credit Report

By Joe Wallace

Do you dread the idea of looking at your credit report? Some people delay looking at theirs because they are afraid of what they might see, or afraid they won’t be able to understand what they are reading in their own report. Fortunately, there are some questions you should ask about your credit report that can give you a good start in the right direction–these questions will help you better understand what’s in your report and what a lender looks for when they review yours. When you get your copy of your credit report from Experian, TransUnion, or Equifax, be sure to review the report once “cold”, and then review it again with the following questions: Credit Report Accuracy: Open Accounts? Are the accounts listed in your credit report open? | more...

July 30, 2021

What You Need To Know About FHA Home Loan Credit Checks

By Joe Wallace

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...

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...