Articles Tagged With: FICO Score

November 27, 2019

Home Loan Approval: Why FICO Scores Matter

If you want to buy a home, you will need to become well-read about credit, credit scores, and how your credit report affects your ability to apply for a mortgage loan. There are three major credit reporting agencies, Equifax, TransUnion, Experian. The fact that there are three agencies is one good reason why credit experts encourage borrowers to check their credit reports as early as possible prior to applying for an FHA mortgage or any other major line of credit. One credit report could have discrepancies another one does not reflect, etc. A borrower should always know what their lender is going to see on the report before the application is completed. FICO scores are indeed an important part of FHA loan approval, and borrowers should respect FICO scores and | more...

June 16, 2017

What Is The Average Credit Score Needed To Buy A House?

By Joe Wallace

If you are a first-time home buyer, you’re likely asking a very common (and very important) question. What is the average credit score needed to buy a house? To get the answer, we decided to see what one of the three major credit reporting agencies, Experian, has to say on this subject. On the official Experian website, the answer to this question might surprise you: “There is no set minimum score to buy a house.” That’s right, you just read a direct quote from the official site of the credit reporting agency, Experian. But that statement does NOT mean there are no FICO score or credit score standards. Each lender has a set of credit score ranges it uses to determine creditworthiness. And many federally insured or guaranteed home loan | more...

April 11, 2017

Maximum Loan Amounts For FHA Loans

By Joe Wallace

What are the FHA loan rules for maximum loan amounts? The rules for loan amounts are found in the FHA single family home loan rule book, HUD 4000.1 has answers, starting with this from page 155: “A Mortgage that is to be insured by FHA cannot exceed the Nationwide Mortgage Limits, the nationwide area mortgage limit, or the maximum Loan-to-Value (LTV) ratio. The maximum LTV ratios vary depending upon the type of Borrower, type of transaction (purchase or refinance), program type, and stage of construction.” Borrowers sometimes wonder if they can apply for a home loan for more than the purchase price of the home. The answer to such questions depends greatly on what the extra money is to be used for. For forward mortgages and refinance loans alike, FHA | more...

April 6, 2017

Credit Report Data, Disputed Accounts, and FHA Loans

By Joe Wallace

Borrowers are often advised to give themselves plenty of time in the pre-purchase planning stages to review credit report details to make sure there are no errors or outdated information. What happens if a borrower does see something on a credit report and chooses to dispute it? Ideally, issues like these should be caught very early in the planning stages. You should check your credit report as early as one year prior to the home loan application in order to give yourself enough time to dispute items if required. But not all borrowers have that much time to deal with such issues, and FHA loan rules address disputed accounts in detail. HUD 4000.1, the FHA single family home loan rule book, has two sections on disputed accounts-one for derogatory credit | more...

How much can I borrow with an FHA refinance loan?

March 2, 2017

FHA Loan FICO Score Rules

By Joe Wallace

What are the FHA loan program’s FICO score requirements? That’s a common question, and a good one to ask as there are several things to keep in mind about how the FHA and participating lenders will view your credit scores. FHA loan rules say that borrowers with FICO scores between 500 and 579 are technically eligible for FHA mortgages (more on that in a moment) but a higher down payment (10%) is required. For borrowers with FICO scores of 580 or higher on their credit report, maximum financing is allowed with a required down payment of only 3.5%. These are simply FHA loan program minimum standards. Your lender may require higher FICO scores, and typically scores in the mid-600s tend to have a better chance to qualify for loan approval. | more...

March 1, 2017

Mortgage Rate Trends: Slightly Higher

By Joe Wallace

We’ve seen three days of improvement, followed by two days of mortgage rates creeping upward. The rate environment at the time of this writing is a bit contrary-we have seen stronger economic news and data this week that traditionally has put upward pressure on interest rates. But the most recent stronger data hasn’t put as much pressure on mortgage rates and for that we can report that number-wise, the best execution rates haven’t budged that much. Affected borrowers will likely see the difference reflected in closing costs. 30-year fixed rate conventional mortgages are holding at a best execution 4.125% at the time of this writing, which is an adjustment from the earlier range between 4.125% and 4.25% best execution. FHA mortgage rates are holding in a range between 3.75% and | more...

Can I get an FHA home loan if I owe back taxes?

February 22, 2017

Credit Score Questions

By Joe Wallace

Credit score issues are some of the most popular topics in our comments section-many want to know if their FICO scores are high enough to qualify for an FHA mortgage. One reader asked recently, “(Can) i can buy a (home using) FHA or HUD at a credit score from 500 to 579? With 10% down? How much is 10%?” This reader is referring to a recent blog post about FHA FICO score requirements which included the following: “FHA loan rules state that borrowers with credit scores at 580 or higher are eligible for maximum financing for FHA home loans, which requires a 3.5% down payment from the borrower. For those with credit scores between 579 and 500, 10% down is required.” The short answer to the reader question is that | more...

February 16, 2017

Credit Score Rules For FHA Mortgages

By Joe Wallace

There’s a common reader question about credit score rules for FHA mortgage loans that we get from time to time that goes something like this: “Is it possible to have a low credit score (500-600) and still get an FHA mortgage?” FHA loan rules state that borrowers with credit scores at 580 or higher are eligible for maximum financing for FHA home loans, which requires a 3.5% down payment from the borrower. For those with credit scores between 579 and 500, 10% down is required. However, these FICO score numbers are FHA loan minimum standards and lender requirements can be and often are higher. Credit score rules for FHA loans include the following instructions (see below) to the lender found in HUD 4000.1, the FHA single-family mortgage loan rule book. | more...

February 2, 2017

FHA Mortgage Facts You Should Know

By Joe Wallace

FHA mortgage loans are a very good option for borrowers looking for a lower down payment and less stringent credit requirements than conventional mortgages. Did you know that FHA home loans do not feature a minimum or maximum income requirement? A borrower’s ability to qualify for an FHA mortgage depends on FICO scores, debt-to-income ratios, credit history, and other factors but there’s no “qualifying dollar amount” for income in terms of minimums OR maximums. Some believe that FHA mortgages are only for first time home buyers, the economically disadvantaged, or only for typical suburban homes. But FHA home loans are available to anyone who is financially qualified and wants to use the property to be purchased as their primary residence. FHA mortgages require only a 3.5% down payment in typical | more...

January 26, 2017

FHA Loans and Credit Report Issues

By Joe Wallace

FHA home loans offer an alternative to the more strict requirements of conventional mortgages. FHA loans typically feature a lower down payment requirement than many conventional loans, and have more forgiving credit standards (though lender standards will still apply). Some apply for an FHA mortgage unsure of how their past credit activity or even their current FICO score might affect their chances at loan approval. If you are one of those people, there are some things you can do for greater peace of mind going into the loan process. The catch is that advance planning is required-it’s best to start preparing for a major financial commitment like a mortgage a full year or more before applying. The planning time is crucial since you will need to save up money for | more...