Articles Tagged With: Credit Issues

November 5, 2018

How Do I Know If I Qualify For An FHA Mortgage?

How do you know if you qualify for an FHA mortgage? There are several minimum requirements you should know, but keep in mind that we are not discussing an individual lender’s standards (which will vary depending on the lender) but the FHA Single Family Home Loan program’s basic rules. When you talk terms with a participating FHA lender, you can discuss what additional requirements may apply with that financial institution. The Basics FHA home loans are for financially qualified borrowers regardless of their status as first time buyers or experienced home owners. There is no minimum or maximum income dollar amount specified for FHA home loan approval. Borrowers may be eligible even if they have a bankruptcy or foreclosure in their history as long as good credit has been re-established | more...

the importance of credit for home loan approval

October 22, 2018

FHA Home Loan Debt-To-Income Ratios

By Joe Wallace

First-time home buyers looking at their FHA mortgage options hear a lot of about the debt-to-income ratio and how it affects the borrower’s ability to get a home loan approved. But do you know how the FHA lender is supposed to calculate that debt ratio? The rules governing this are found in the FHA loan handbook, HUD 4000.1. It explains to the lender that there are actually two debt ratio calculations that must be made. One is the total monthly mortgage payment compared to the total monthly income, the other is the total “fixed payment” compared to the borrower’s income. These debt ratios are complicated by the requirement that the income used to calculate the ratio must be lender-verified and certain kinds of unverifiable income will not count in the | more...

October 5, 2018

Five Credit Areas That Affect FHA Loan Approval

By Joe Wallace

There are many areas that can affect the lender’s decision to approve or deny an FHA home loan application. Do you know what these important issues mean and how they can affect millennial home buyers or anyone else examining their affordable housing needs? #5 FHA Home Loan Approval And Your FICO Scores Your FICO score may be well within the FHA minimums for loan approval or even maximum financing, but do you know what the participating FHA lender’s FICO score requirements might be above the FHA minimum? You may find that the FHA loan program’s minimum 580 FICO score for the lowest possible down payment is lower than the FHA lender’s requirements. Check with the lender to see what is required in this area for a better idea of what | more...

Rehab Refinance Loans, reverse mortgages

September 21, 2018

FHA Home Loan Credit Questions And Answers

By Joe Wallace

There are lots of questions about how the FHA home loan process works, but among the most common are on the subject of credit, and how you qualify for a home loan with your credit scores and credit history. Here are some of the most frequently asked questions about home loans and credit. What FICO Scores Are Able To Qualify For An FHA Home Loan? There are two standards; FHA loan minimum requirements and the lender’s individual FICO score rules. FHA minimums are NOT the same as your lender’s standards; the FHA FICO scores are the minimum required to be approved. FHA loan rules say borrowers with FICO scores between 500 and 579 technically qualify for an FHA mortgage, but at a higher down payment than those who qualify for | more...

August 28, 2018

Credit Mistakes People Make Before Applying For Home Loans

By Bruce Reichstein

There are some common credit mistakes home loan applicants make before filling out loan application paperwork that can hurt them later when it comes time for the lender to decide whether to approve the mortgage loan. Avoiding these mistakes can go a long way toward loan approval. If you are applying for an FHA mortgage in the next year, consider these issues carefully! FHA Home Loans Have A Down Payment Requirement: Start Preparing Early Your FICO scores will help determine whether you are eligible for maximum FHA loan financing and the lowest down payment. If you do not work on improving your credit scores over the course of the year leading up to your FHA loan application, you may find yourself unable to get the most advantageous rates and terms. | more...

August 17, 2018

Am I Eligible For An FHA Mortgage After Foreclosure?

By Joe Wallace

“Am I eligible for an FHA loan after a foreclosure?” That is a more common question than some realize, and FHA loan rules in HUD 4000.1 address this question directly. The answer depends greatly on circumstances, how much time has passed since the foreclosure action, and how the borrower has worked to re-establish good credit. FHA Home Loan Rules On Foreclosures HUD 4000.1 contains the FHA loan rules that govern loan approval when the borrower has a foreclosure on their credit history. Much depends on how much time has elapsed since the foreclosure; HUD 4000.1 instructs the lender: “A Borrower is generally not eligible for a new FHA-insured Mortgage if the Borrower had a foreclosure or a Deed-in-Lieu (DIL) of foreclosure in the three-year period prior to the date of | more...

August 15, 2018

FHA Home Loans And The Accuracy Of Your Credit Reports

By Joe Wallace

When you start planning for your FHA home loan and reviewing your credit reports, it’s entirely possible that you could find erroneous information in your reports. Sometimes the credit information for another person with a similar name could wind up accidentally being posted in your report, other times there may be inaccurate data in your credit history about the amount, frequency, or age of your credit account payments. How should a potential FHA borrower deal with these issues? HUD 4000.1 addresses some aspects of this issue, but not all the credit problems a borrower could experience when reviewing a credit report are covered by HUD and FHA home loan rules. HUD 4000.1, the FHA loan handbook, instructs the lender on how to proceed if the lender finds inaccuracy in debt | more...

August 13, 2018

Who Needs Credit Repair Before Applying For An FHA Mortgage?

By Joe Wallace

Who needs credit repair before applying for an FHA mortgage? If you are worried about your ability to qualify for a home loan because of past financial issues, credit mistakes, or even identity theft, it’s important to begin reviewing your credit and working on raising your credit scores as early as possible before committing to a mortgage loan application. Don’t wait to start working on your credit, begin today! What Kind Of Credit Repair Is Needed? There are many different things you can do to work on your credit rating and credit history but what we NOT suggesting is that you pay a third party offering to “remove all negative credit information” from your credit report or other things that are not actually possible. The best way to begin working | more...

July 26, 2018

What To Do If Your Credit Score Isn’t Perfect But You Are Still Buying A Home

By Joe Wallace

Do you know what to do if your credit score isn’t perfect but you are still buying a home? There are some steps you can take that have nothing to do with paying a third party to try to fix your credit rating, or paying someone else to do things you should be doing for free where credit repair is needed. Start Reviewing Your Credit Rating Early In Your FHA Home Loan Process This means reviewing and working on your credit before you decide it’s time to fill out application paperwork for an FHA mortgage loan or FHA refinance loan. You need to know your credit scores long before you start house hunting. You can request free copies of your credit report (one per year from each of the major | more...

July 24, 2018

How To Prepare For An FHA Mortgage: Check Your Spending

By Joe Wallace

Do you know how to prepare for an FHA mortgage? If you aren’t currently doing a check on your spending as part of your mortgage loan preparation stage, you may need to run some numbers on your personal finances before you commit to house hunting and an FHA mortgage application. How To Take A Realistic Look At Your Monthly Spending Habits To Prepare For An FHA Home Loan Consider pulling your bank statements for the last year to review your spending habits, and pay close attention to the habits you notice over the most recent three to six months. Your financial institution may have a spending tracker for personal accounts that may help, or you may wish to invest in a personal finance app or tracking software to help you | more...