Articles Tagged With: FHA Mortgage

December 19, 2024

Bad Credit And FHA Home Loan Options

The term “bad credit” tends to feel a bit stigmatizing. Borrowers who have had past difficulty with credit have it hard enough trying to recover from the stigma of their previous credit issues without being confronted by those problems every time they want to start working on their credit. Is there such a thing as a bad credit FHA loan that can help people become homeowners and get a fresh start with credit? Technically the answer is, “it depends”, which isn’t very reassuring. But the truth of the matter is, there are FHA standards that technically make the concept of a bad credit mortgage a reality. After all, on paper FHA loan rules state that a borrower with FICO scores in the 500 range could still technically qualify for an | more...

November 27, 2024

FHA Home Loans And Your Downpayment

By Bruce Reichstein

There are good reasons to put more money down on a low-down-payment mortgage like an FHA home loan. There are also important reasons why someone might not be able to pay as much upfront on the home loan as they would like. What are the advantages and disadvantages of a larger downpayment? Are you looking to buy a new home in 2025? The biggest disadvantage for some is the basic financial outlay of cash. Financial circumstances don’t permit all buyers to pay a lot out of pocket for their home loans. In such cases, downpayment assistance programs offered by state or local agencies can help those who qualify. For those who can afford to pay more upfront? The most obvious, Home Loans 101-type advice is that a bigger downpayment lowers | more...

November 7, 2024

Will Your FHA Home Loan Be Approved?

By Joe Wallace

Will your FHA home loan be approved or denied? There are several reasons why your loan application could be turned down, and some of those reasons have more to do with the property than with the borrower’s credit history or FICO scores. And in some cases, getting turned down for a mortgage is the borrower’s fault due to credit history or FICO score issues. But what about when the borrower’s credit, employment, and other qualifying factors are acceptable to the lender, but the home loan application is turned down anyway? For some, it could be a question of the property’s condition, location, or type. Location Counts Some don’t realize at first that to be approved for an FHA residential home loan, the property cannot be situated within a specific range | more...

October 21, 2024

Are You Ready To Apply For An FHA Mortgage?

By Joe Wallace

How do you know you are ready to apply for an FHA home loan? And by that question, we mean sending the documents to the lender ready for the approval process. Being ready to submit your financial information and other documents for loan approval means having taken certain steps along the way in the planning and saving stages of your mortgage. To apply for an FHA home loan, you’ll want the following things in the list below, and keep in mind that these are needed before you send in your application: Making an offer on a home and having it accepted is the catalyst for getting the actual application paperwork into the system, but some borrowers pre-qualify for a loan before house hunting. That causes some confusion at times because | more...

September 18, 2024

FHA Home Loans: How Much Will You Pay Per Month?

By Joe Wallace

How much house can you afford with an FHA loan? If you aren’t sure about the final amount of your monthly mortgage payment as a new house hunter, you aren’t alone. Fortunately, there are things you can do to get an estimate on how much to expect your monthly payments to be. Do The Right Math Don’t make the mistake of doing “the wrong math” for your FHA loan. You should not just use the home’s sale price and possible interest rate to make the calculation. Why? The results you get don’t include other costs you may have to pay each month, and your expectations will be skewed (most likely) to be too low in terms of the actual monthly financial commitment. Home Loan Math Variables The previously mentioned calculation | more...

September 10, 2024

Bankruptcy Versus FHA Loan Approval

By Joe Wallace

Declaring bankruptcy, either Chapter 7 or Chapter 13, impacts your credit standing. Though it might be a necessary financial step, it disrupts your normal financial activities, including getting a mortgage. But is declaring bankruptcy the end of your ability to buy a new home? Not necessarily. Thanks to “seasoning periods” a borrower waits out after bankruptcy to be declared fit to borrow to buy a home, bankruptcy doesn’t permanently bar you from buying a home. Before discussing the waiting periods for mortgage loans, let’s differentiate between Chapter 7 and Chapter 13 bankruptcies: Chapter 7 Bankruptcy This involves liquidating your non-exempt assets to pay off creditors. While it provides a quicker resolution, it can negatively affect your credit score for up to a decade. Chapter 13 Bankruptcy This allows those with | more...

August 29, 2024

Home Loan Approval And Your Credit Scores

By Joe Wallace

It doesn’t matter if you want to buy a single-family home in a rural area or a condo unit in a busy metropolis; if you don’t understand your credit report or know your credit score, you aren’t ready to financially commit to a home loan. Fortunately, the Fair Credit Reporting Act requires the major credit agencies to offer you a free credit report each once per year. In order to buy a home, consumers must become credit-literate. That means knowing how credit reports work, how to interpret credit scores, and how a credit report affects one’s ability to be approved for a loan. There are three major credit reporting agencies: Equifax, TransUnion, and Experian. That is one reason why we encourage borrowers to check their credit reports as early as | more...

August 28, 2024

Make A Bigger Downpayment On Your FHA Mortgage

By Joe Wallace

When buying a home with an FHA loan, having a large down payment can help you save money on the loan and even help a lender approve your mortgage application. Here are some key benefits to consider: Strategies For Saving A Downpayment With careful planning and sometimes a bit of outside help, you can achieve your downpayment goal. Here are strategies to help you save: There are also creative means you may consider to boost your downpayment fund: Saving for a larger down payment demands discipline and commitment, but the long-term financial rewards include a more successful homeownership journey through an FHA loan.

August 27, 2024

FHA Loans Versus VA Home Loans: Who Wins?

By Joe Wallace

Some borrowers qualify for VA loans. Others qualify for FHA mortgages. Some may have the option to apply for both. What do you need to know about FHA and VA home loans besides the fact that they are both government programs designed to help borrowers find affordable houses? We examine the differences and similarities below. What To Know About VA Loans VA loans, guaranteed by the U.S. Department of Veterans Affairs, are exclusively for those with uniformed service, including veterans, active-duty service members, and certain surviving spouses. These loans are popular among the military community for the no down payment option, competitive interest rates, and more forgiving credit requirements. Eligibility for VA loans is based on military service. Individuals must meet specific service requirements outlined by the VA. Generally, veterans, | more...

August 23, 2024

What To Know About Credit Before You Apply For An FHA Mortgage

By Joe Wallace

Credit history and FICO scores will be key factors when your FHA lender reviews your home loan application. For first-time homebuyers, the path to owning a home can be complicated early by credit problems, and knowing to avoid some common credit pitfalls is key. We examine some of the major points below. Prioritize Your Credit Report FHA lenders will review your credit reports from the three major credit bureaus to assess your creditworthiness and determine your interest rate for the FHA mortgage. New homebuyers must regularly monitor credit scores and reports for evidence of problems, errors, and identity theft. These, even if not your fault, can reduce your credit score and jeopardize loan approval. Start by requesting free copies of your reports from the official website, AnnualCreditReport.com, and review those | more...