Articles Tagged With: Credit Requirements

July 16, 2021

Why Your Credit Report Matters

Are you new to the mortgage loan process? It’s easy to make certain assumptions, especially where credit approval is concerned. What do you need to know about your credit report? Don’t forget that how you use your credit, how much credit you use, and whether you pay on time are all factors that go into your FICO score calculations. There are several factors that may help you make better choices about how to plan and apply for your mortgage. Credit Report Factors To Consider Your FICO scores, credit card use, plus information about the amount of credit you use per card (up to the credit limit and by how much) are all things your lender will need to see when looking at your report. FICO scores are an important part | 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...

June 9, 2021

Have You Checked Your Credit Score Lately?

By Bruce Reichstein

When was the last time you checked your credit score? If you are thinking about applying for ANY line of credit (but especially home loans) you will want to be looking at your credit reports on a regular basis. There are good reasons to monitor your credit and keep track of updates to your report. What kind of reasons? Human error, for one. If your credit report has mistakes like an outdated home address, incorrect spellings of your name or addresses, or other problems those errors could make trouble for you later on. But errors aren’t the only issue to keep an eye on. Credit scores help determine your interest rate on a home loan, and they also help determine what size of down payment you may be required to | 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...

May 12, 2021

Down Payment Sources: The Rules

By Joe Wallace

Are you struggling to save enough money for a down payment for a home loan? It’s tempting to turn to quicker sources of funds for that minimum required investment, but FHA loan rules say some potential sources for down payment money cannot be used. Those prohibited sources include considering cash advances from a credit card, payday loans, and certain other sources for a larger sum of money that can be used for a down payment including down payment “gifts” that actually have an expectation of repayment. The guidelines that cover these downpayment issues are found in HUD 4000.1, also known as the FHA Lender’s Handbook. The rules? For any type of FHA loan that requires a down payment (a new purchase loan, an FHA One-Time Close construction mortgage, condo loan, | 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

March 31, 2021

One-Time Close Construction Loans: Loan Limits

By Joe Wallace

Are you a house hunter who has gotten tired of looking at other people’s dream homes? Do you want to build your home instead of buying someone else’s? The One-Time Close construction loan is a good option for this; the One-Time Close loan eliminates the need for a second loan application and approval process compared to some other types of construction loans. There is more than one type of One Time Close mortgage to choose from–you could be eligible for a One-Time Close construction mortgage in multiple programs. Do you know which one is best for you? USDA One-Time Close Construction Loans We start with the need-based construction loan program offered by the USDA. The USDA One-Time Close construction loan program was created for borrowers on restricted incomes. This construction | more...

March 25, 2021

Uses For An FHA Cash-Out Refinance Loan

By Joe Wallace

If you are thinking about applying for a cash-out refinance loan, you likely have some ideas about what you want to use the money for. FHA Cash-Out refinance loans allow the homeowner to convert equity built up in the home and take it out in cash. The amount of cash back is determined once the original loan and the closing costs of the new loan have been dealt paid. How to use the money? Some want an FHA cash-out refi to do home improvements with no restrictions on how the cash gets used. These loans don’t have the same restrictions on how the funds are used when you compare them to the FHA 203(k) Rehabilitation loan which allows a refinance and improvements to be made using loan funds. But | more...

March 15, 2021

Getting Credit Approved For A Home Loan

By Joe Wallace

A lot of people don’t know how to approach a home loan–what does the average borrower need to know about your lender’s credit approval for a home loan? The things you should know that will help you understand the home loan process better have a lot to do with what the lender is required to do in order to declare you a good credit risk. For some future home owners, getting to “yes” for a home loan seems like a mystery; take some of the guesswork out of the home loan process by learning a few things about what the lender is required to do with your financial information. The first thing to know about getting a home loan approved? Perfect credit is NOT to be considered for an FHA | more...