Articles Tagged With: Credit Requirements

November 22, 2010

How Much Income Do I Need to Qualify for an FHA Home Loan?

"How much income do I need in order to qualify for an FHA home loan?" That is one of the most popular questions many first time home buyers ask about getting an FHA mortgage. The answer often comes as a surprise. The FHA has no minimum income requirement--there is no dollar amount listed as the baseline for which FHA loans are approved. What the FHA does require is a history of steady income for at least three years. That FHA requirement should not be misinterpreted--it does not establish a minimum length of employment at any one company. It is intended to set a minimums for steady income rather than attempt to gauge employability or longevity at any one firm.

November 19, 2010

How FHA HECM Loans Work

By Joe Wallace

The FHA offers a wide range of home loans and government home loan refinancing programs, but one in particular is just for seniors who have equity in their homes. Known as a HECM or Home Equity Conversion Mortgage, the FHA advertises HECM loans as "a safe plan that can give older Americans greater financial security. Many seniors use it to supplement social security, meet unexpected medical expenses, make home improvements and more."

November 18, 2010

Home Inspection Advice for FHA Borrowers

By Joe Wallace

FHA appraisals, which are not the same as independent home inspections, are conducted for three reasons. According to the FHA, appraisals are conducted, "To estimate the market value of the property...to make sure that the property meets FHA minimum property requirements...(and) to make sure that the property is marketable." FHA borrowers should pay for an independent inspection of the home for two important reasons--the first being that FHA appraisals will only catch problems that are "readily observable" by the appraiser.

November 17, 2010

Government Home Loans and Anti-Discrimination Laws

By Joe Wallace

The FHA and Department of Housing and Urban Development have an aggressive anti-discrimination policy. FHA home loans are meant for all qualified applicants regardless of race, color, national origin, religion, sex, familial status or disability. Most people are aware that refusing to issue credit, show a home or approve an application for those reasons is illegal. Even in so-called gray areas such as a loan applicant on maternity leave or suffering from a temporary disability that affects the ability to earn a paycheck have been challenged successfully; a lender or real estate agent can't refuse to do business with a qualified applicant in such cases.

November 12, 2010

Do FHA Loans Require a Criminal Background Check?

By Joe Wallace

There are many steps to take on the road to home ownership. When applying for an FHA mortgage, some of those steps include furnishing information to help the FHA determine whether an applicant is a good credit risk. FHA requirements include a credit check that includes residency information, employment history and other details to give an accurate picture of an applicant's background as it relates to paying bills on time and maintaining good credit.

November 11, 2010

Does the FHA Require an Escrow Account for FHA Mortgages?

By Joe Wallace

In our last post, we discussed escrow accounts, which a lender may require to be set up in connection with an FHA loan in order to pay mortgage insurance, property taxes and other expenses with no fear of missed payments or penalties for late payments. When a lender sets up an escrow account in the buyer's name for these purposes, they often add the costs of the insurance and other payments into the mortgage, making one simple payment for the buyer. The extra money is placed into escrow and held until it is needed to pay the insurance, taxes or other items.

November 11, 2010

What is an Escrow Account and Why Do I Need One for an FHA Loan?

By Joe Wallace

If you're thinking of buying that first home, you've probably read plenty of real estate articles and brochures with a wealth of new vocabulary. One of these is "escrow". Until applying for an FHA home loan, many people have never needed an escrow account so it's no surprise that "What is an escrow account and why do I need one for an FHA mortgage?" is such a common question.

November 10, 2010

Can Veterans Apply For FHA Loans?

By Joe Wallace

Military veterans eligible to use the VA home loan program have a very important benefit they can use to get affordable housing. So why would a vet consider using an FHA home loan? After all, both VA loans and FHA mortgages offer similar things--a guaranteed loan backed by the government that makes the borrower more attractive to the right lender.

November 8, 2010

FHA Downpayment Rules

By Joe Wallace

There is a big learning curve to FHA loans and first time home buyers often don't realize there are rules that govern practically every step of the process from who can appraise a home for sale to acceptable sources of money for FHA mortgage down payments and earnest money.

November 5, 2010

What Are the Minimum Credit Report Requirements for an FHA Loan?

By Joe Wallace

FHA home loans require a credit report in order to determine that an FHA loan applicant meets the minimum credit requirements for the program. FHA requirements include specific information from a credit report. Did you know the FHA has standards for both the information on the credit report AND the credit report itself? Today we