Articles Tagged With: Credit History

July 16, 2018

Are Free Credit Reports Trustworthy?

Long before you fill out FHA home loan application forms, you should be requesting copies of your credit reports and reviewing the information your lender will see when you are ready to get your new home loan. There are many websites and third-party companies that offer free credit reports to help loan applicants, but not all of them are interested just helping consumers. Can you trust the companies that offer free credit reports and credit score information? While it’s not possible to recommend a specific organization (with one exception), it is good for consumers to remember that many companies offer free services in exchange for your personal data that can be used to market goods and services to you via your cell phone number, email address, and other information. The | more...

July 9, 2018

Can I Get An FHA Loan With A Debt Collection In My Credit History?

By Joe Wallace

Can I get an FHA home loan approved even if I have a debt collection in my credit history? That is an important question on the minds of some FHA loan applicants going into the home loan process. This type of credit issue is commonly referred to as having a collection account, which HUD 4000.1 (the FHA Loan Handbook) defines as follows: “A Collection Account refers to a Borrower’s loan or debt that has been submitted to a collection agency by a creditor.” Collection accounts can be an issue for an FHA loan applicant; generally it is strongly recommended to come to the application process with 12 months of on-time payments for all financial obligations. Depending on circumstances (such as when the lender is required to manually underwrite the loan), | more...

Home Buying, FHA Loans, And Mortgage Trends

June 28, 2018

What Is Good Credit? FHA Mortgage Loan Credit Score Ranges

By Bruce Reichstein

What is considered good credit? Do you know what credit score ranges are considered the best? Or which credit scores are considered marginal or even what lenders consider to be bad credit? There are specific credit score rules in HUD 4000.1 that define who may be approved for the lowest down payment for an FHA mortgage loan, and specific ranges of FICO scores that require more money down. And finally there are the credit scores that are simply not eligible for the FHA home loan program. But these ranges don’t really address what is considered to be good or bad credit. They are simply the credit score numbers that make you eligible for the lowest down payment, a higher down payment, or no FHA loan approval at all. FHA loan | more...

June 20, 2018

Get The Loan! FHA Home Loan Approval Tips

By Bruce Reichstein

Need some tips on how to get and keep FHA home loan approval for a new purchase loan or a cash-out refinance loan? There are some important credit-related things you can do to avoid making your loan more complicated or have it disapproved entirely. Do Not Stop Paying Your Credit Card Bills And Rent On Time Even if your lender has already run your initial credit check, a late or missed payment on your monthly financial commitments can hurt you. It is never safe to assume your lender will look at your credit reports one time only, and any discrepancies that show up in the meantime will have to be dealt with. Your lender would, at a minimum, require documentation for the late/missed payment, but the ability for such incidents | more...

the importance of credit for home loan approval

June 12, 2018

Home Loan Anxiety Part 2: Credit Issues Before Applying For An FHA Mortgage

By Joe Wallace

Do you suffer from “home loan anxiety”? Are you worried about your ability to qualify for an FHA mortgage loan? There are some important issues you should know about that can help reduce your worries about applying. The key is to address your concerns early enough in the planning stages of your new loan to make a real difference. Worried About Your Credit And How It Might Affect Your Home Loan Application? One of the best things any borrower suffering from anxiety over a home loan application can do is to contact the FHA directly at their toll-free number (1-800 CALL FHA) and request a referral to a local, HUD-approved housing counselor who can offer advice on preparing for an FHA loan application. The help of a housing counselor in | more...

June 12, 2018

Do You Suffer From Home Loan Anxiety?

By Joe Wallace

Do you suffer from home loan anxiety? There are many people who want to apply for an FHA mortgage loan, often first-time home buyers looking at an existing construction loan or an FHA One-Time Close construction loan, who begin to worry about getting their loan application approved. Are You Worried About Being Able To Afford Your FHA Mortgage? There is good news for those who are worried they might not be able to afford the FHA home loan and can’t decide whether or not to apply. But there are tools you can use to help get an estimate of how much your FHA mortgage payment might run every month in the form of online mortgage calculators. These tools ask you to input an estimated price of the home, potential down | more...

June 1, 2018

FHA Cash-Out Refinance Loan Credit Tips

By Joe Wallace

If you are considering an FHA Cash-Out Refinance loan, you’re likely wondering what credit tips will help you get closer to loan approval. If you are considering a cash-out refi loan, it’s best to start working on your credit as early as possible in order to make sure the hard work you do is evident when it’s time to fill out the loan application. Evaluate Your Current Budget Reviewing your budget won’t help with credit repair, but it’s an important first step. Why? The lender will be looking at your income compared to your outgoing monthly debt to calculate the debt-to-income ratio for your loan. If your debt is higher than a certain percentage (and lender standards will apply in this area as well as FHA loan rules) your loan | more...

May 23, 2018

Common Credit Problems That Can Affect Your FHA Mortgage Loan Application

By Joe Wallace

What are the most common credit issues that may negatively affect your ability to get approved for an FHA home loan? There are several areas you can anticipate in the home loan planning stages; addressing these areas long before you apply for any major line of credit, including a home loan, goes a long way toward helping you get your new home. FHA Loan Credit Issues: On Time Payments The timely payments issue is one of the simplest areas to address, but also one of the most common problems going into a home loan application. In general, borrowers should never apply for a loan with any late or missed payments on their record in the 12 months leading up to the loan paperwork. Anything less than this can seriously compromise | more...

May 14, 2018

FHA Home Loan Approval And Your Credit Report

By Bruce Reichstein

What do potential home loan borrowers need to know about FHA loans and credit reports? There are some very simple things that some don’t realize going into the home loan process that can definitely affect your participating FHA lender’s ability to approve your mortgage. FHA Loan Credit Checks The lender is required by FHA home loan rules to pull a loan applicant’s credit reports to review credit scores, credit history, and look for overall patterns of reliable use of credit. However, some borrowers mistakenly assume that the lender will look at a credit report once, make the notes, and never go back to the credit report again. This is not necessarily the case. Your FHA lender is charged with making sure that a borrower’s credit position is stable and that | more...

May 14, 2018

Am I Eligible For An FHA Home Loan If I Am In A Credit Counseling Program?

By Joe Wallace

Are potential FHA borrowers eligible for an FHA home loan if they are participating in a credit counseling program? This is a question on the minds of some borrowers trying to fix credit issues and repair past mistakes or problems associated with their credit. Borrowers should always work on their credit, counseling program or not, before applying for any major line of credit such as a mortgage or auto loan. The FHA and HUD even offer referrals to local, HUD-approved housing counselors for borrowers looking for pre-purchase advice including credit tips. (You can call the FHA directly at their toll-free number, 1-800 CALL FHA for these referrals). Some borrowers choose a formal credit counseling program in order to work on credit repair issues, and there is an understandable concern that | more...