Articles Tagged With: Credit History

December 6, 2011

FHA Loan Debt To Income Ratio Rules

In recent blog posts we’ve been examining the FHA loan debt-to-income ratio rules. The FHA requires borrowers to have a combined monthly debt load and projected FHA home loan obligation that does not exceed 41% of the borrower’s income. As stated in previous blog posts, FHA guidelines require the lender to examine the borrower’s monthly debts and compare to his or her monthly income. The total amount of debt including credit card payments, auto loan payments, student loans, and other payments, is added together, then combined with the total amount due each month for the FHA home loan. That figure does not just include the mortgage payment itself–it also includes any home owner association dues, amounts which must be deposited in escrow for property taxes and insurance, etc. When the | more...

December 1, 2011

FHA Loans: How Lenders Evaluate Non-Traditional Credit

By Joe Wallace

In a recent blog post we answered a reader question about FHA home loans and non-traditional credit. Can an FHA loan applicant qualify for an FHA home loan even if they have limited credit history or a history of non-traditional credit? The short answer is yes–after all, not all FHA borrowers choose to apply for credit cards, some buy their vehicles in cash, and don’t have many of the credit needs that others do. The reader asked, “would the FHA look at our utility bill payment history instead of credit history?

September 28, 2011

FHA Loans: What Do I Need to Pre-Qualify?

By Joe Wallace

If you’re considering a new home purchase, many will offer advice about pre-qualifying for an FHA home loan. A lot of borrowers who pre-qualify swear by this approach. It allows you to make serious choices about specific properties within your price range as determined by the pre-qualified FHA loan amount rather than finding a home, making an offer and hoping a loan can be approved for the right amount. But what does an FHA borrower need in order to pre-qualify for an FHA insured mortgage? For this discussion we’re not talking about credit scores or how much preparation time is needed to get your finances in order, but rather what information you specifically need to approach a lender via a website, by phone or in person. The first detail borrowers | more...