Articles Tagged With: Credit Requirements

November 29, 2010

Do I Qualify for an FHA Short Refinancing Loan?

In 2010, the FHA made changes to its refinance program to let borrowers who owe more on conventional home loans apply for something commonly known as the FHA Short Refinance program. These FHA refinancing loans are an important option for borrowers who find themselves in difficult financial situations and know they can't avoid foreclosure by selling the home. An FHA Short Refinancing loan makes a lot of sense for borrowers in this position. But what does it take to qualify for the loan?

November 29, 2010

What are FHA Minimum Property Standards?

By Joe Wallace

As with most government home loans, the mortgages guaranteed by the FHA have minimum property standards which must be met before the FHA will approve the loan. But taken at face value, that statement would lead some to believe the FHA maintains a set of building codes that a home must meet above and beyond (or at least separate from) state and local codes. That was true once upon a time--until the mid 1980s, the FHA did have its own codes for different types of buildings.

November 26, 2010

Can I Get an FHA Loan Even Though I

By Joe Wallace

Conventional loans can be unforgiving when it comes to credit scores, credit history, bankruptcy and foreclosure. In the current housing market, credit requirements on conventional loans are tougher than ever. One of the reasons government home loans are so popular is because FHA guaranteed loans are more lenient and flexible where credit is concerned. The FHA even allows applicants to re-establish credit with an FHA loan even if they have previously declared bankruptcy or had a foreclosure. There are strict rules that cover these situations, but for those who qualify, the FHA mortgage is an excellent way to start over, reestablish credit and become a homeowner once more.

November 26, 2010

Can I Get an FHA Loan Even Though I

By Bruce Reichstein

November 26, 2010

Can I Get an FHA Loan Even Though Ive had a Foreclosure or Declared Bankruptcy?

By Joe Wallace

November 26, 2010

Are FHA Loans Assumable?

By Joe Wallace

An FHA loan assumption is a situation where a new FHA borrower takes over or assumes the debt on an existing FHA home loan started by another borrower. According to the FHA official site, the specific definition of an FHA loan assumption reads, "Assumption of an FHA-insured mortgage is a servicing function where the responsibility of the mortgage is acquired by another person through either Simple or Creditworthiness process." Those two options, "simple" and "creditworthiness" can be confusing to new borrowers at first, but these two terms are simple to understand. If an FHA borrower wants to assume an FHA mortgage originated December 1, 1986 or earlier, the "simple" process is used. This means the loan can be assumed without prior approval from the FHA.

November 25, 2010

How to Avoid Foreclosure on FHA Loans

By Joe Wallace

In tough economic times, many home owners struggle to keep up with their mortgage payments. The first time an FHA borrower misses a mortgage payment, the collection agencies won't come knocking on the door, but that first missed payment is a slippery slope that leads toward FHA mortgage default and eventually foreclosure. There are many programs designed to help keep a buyer in their home, but those who act quickly may not even need the most recent Obama mortgage program or government home loan bailout plan. The FHA advises borrowers to get in touch with a HUD-approved counseling agency the moment it's clear the borrower will have trouble making the next mortgage payment on time. FHA loan counseling is available at 1-800-569-4287 or TDD: 1-800-483-2209.

November 24, 2010

How Much is the FHA Debt-to-Income Ratio?

By Joe Wallace

The FHA has a maximum debt to income ratio set for FHA loans. When a borrower applies for an FHA mortgage, they must list all debts and lines of credit in detail as well as all possible approved income sources. With this information, the lender and FHA can calculate what a borrower's debt picture is and issue a percentage of debt to the amount of income listed. For FHA home loans, the rules are clearly spelled out. According to the FHA official site, "The FHA allows you to use 29% of your income towards housing costs and 41% towards housing expenses and other long-term debt."

November 23, 2010

An Introduction to the FHA Debt-to-Income Ratio

By Joe Wallace

FHA loans require many things from the borrower. The credit report, residence history, employment history and a list of all current outstanding debt must all be furnished to give the lender and the FHA a good picture of the borrower as a credit risk. When it comes to government home loans, all the information is needed since credit scores are not the determining factor in whether or not the FHA mortgage is approved. An FHA borrower with good credit, a solid work history and a track record of on-time payments would seem to be a shoo-in for an FHA home loan. But there's one thing that can offset the good things for the borrower if his or her debt-to-income ratio isn't within the limits for an FHA loan.

November 22, 2010

How Long Do I Have To Be Employed to Qualify for an FHA Loan?

By Joe Wallace

The FHA loan application process includes many steps, including running a credit report and having the FHA borrower fill out paperwork with personal information like open lines of credit and current income. Applying for a government home loan also requires giving the lender two types of personal history--a record of where the borrower has lived and where the borrower has worked. FHA requirements dictate furnishing at least a two-year work history, but that requirement shouldn't be mistaken for an employment minimum. According to the FHA's official site, "FHA does not impose a minimum length of time a borrower must have held a position of employment to be eligible for a mortgage."