Articles Tagged With: FICO Score Requirements

May 1, 2015

FHA Loans For First-Time Home Buyers

A reader asks, “I have a condo that was FHA approved when I bought it 10 years ago, they decide to not continue to participate any more about 5 years ago, all I was able to do was refinance at a lower rate thru streamlining with no money out. I had filed bankruptcy a little over 2 years before I bought it with a FHA loan at 5.5.” “I got my credit score up and have a rate under 4% now by refinancing it thru streamline which the balance can be assumed by someone if they qualify but would have to find the balance else where, what I want to know is that I want to sell my condo and buy a house possibly thru FHA can I buy it | more...

April 23, 2015

FHA Loan Mortgage Rate Trends: Flat Overall

By Joe Wallace

Since our last report, mortgage loan rates have been flat overall, with the exception of yesterday’s move which saw rates moving higher. Many market watchers and industry professionals have categorized rate behavior as of late as “flat”, “in a rut” and with yesterday’s shift higher, “breaking free in the wrong direction”. It’s said that after a sustained period with no real movement, a push higher is not unusual. 30-year fixed rate conventional mortgages are hitting, best execution, 3.75% territory depending on the lender. We’ve seen FHA mortgage loan rates break into a new range with 3.375% as the bottom and 3.5% as the high end of this best execution range. That’s up from the previous 3.25% – 3.5% range reported last week. Remember, the term “best execution” refers to rates | more...

April 18, 2015

FHA Loan Rules For Income: Is There A Maximum Limit?

By Joe Wallace

A reader asks, “I was prequalified for an FHA loan and during escrow, my agent said I made too much money to be eligible for the loan. Does that make sense?” The simple answer to this question is no, the notion that a borrower makes too much money to qualify for an FHA mortgage loan does not make sense. But let’s examiner what official FHA and HUD documents say about the single-family FHA loan program: “If you are buying a home, refinancing a mortgage for a home you already own, or making home improvements, you may qualify for an FHA-insured mortgage. In fact, almost anyone who has a satisfactory credit record, enough cash to close the loan, and sufficient steady income to make monthly mortgage payments can be approved for | more...

April 14, 2015

FHA Loan Rules For Commission Income: Another Reader Question

By Joe Wallace

A reader asks, “What if a person went from a commission based job as a loan officer to a salary plus commission job as a Mortgage Loan Manager? Would the salary still be averaged over 2 years?” This question is in reference to an earlier post we did back in 2013, which was titled, “FHA Loans and Commission Income: A Reader Question”. In that blog post, we answered a reader who asked us, “Is it true that if you work in a job where your pay is based on commission you have to be with your current employer for at least one year to obtain a FHA loan, even if your prior job was in the same line of work and was also a commission paying job?” The answer we | more...

April 10, 2015

FHA Home Loans and Credit Score Issues: A Reader Question

By Joe Wallace

A reader asks, “I have an average credit score of about 600, the same with my boyfriend. We have a good chunk of money for a down payment but have been turned down by two lenders.” “We make good money also. We don’t currently have revolving credit but have just been approved for secured credit cards. We would like to purchase in the next month or so rather than waiting. Is there anything we can do?” Borrowers in this situation should call the FHA directly at their toll-free hotline: 1-800 CALL FHA. Request a referral to an FHA/HUD approved housing counselor in the local area who can help advise on pre-purchase issues including credit. Pre-purchase counseling can be a big help to house hunters, especially those who are new to | more...

April 8, 2015

FHA Loan FICO Requirements and Occupancy Rules: A Reader Question

By Joe Wallace

A reader asks, “I saw a home I liked far away in another state. I could very easily afford 20% down and also very easily afford the mortgage payments. My problem is that my FICO is probably too low for a conventional loan. I don’t want to be an investor. I just want to live in the house. I can not move to where the house is for two years and I assume it will be off the market by then.” “If I could get the home today, I would be just fine leaving it empty till I could move to that area. I’m pretty sure I could get an FHA loan except for the owner occupancy rule. I would never break the law, but I wonder if the FHA | more...

April 6, 2015

FHA FICO Score Rules: A Reader Question About “Median Scores”

By Joe Wallace

A reader asks, “Would like to buy a home.. My current scores are 607 Experian, 579 TU, 554 EQ. Wifes scores are mid 500′s. Which score would be looked at.. I just paid off some collections so my score is not updated if its going to change. Should I wait another year before I apply or go for it. Would we have to put 3.5% down our salary is about 85k a year. Looking for a home in the range of 180k, also due to our low scores would we have a high rate?” The rules for FHA loan FICO score review are found in HUD 4155.1. Chapter Four, Section A is where you will find a heading titled, “Definition of Minimum Decision Credit Score”. The lender is instructed: “If | more...

March 30, 2015

FHA Loan Rules: Back To Work

By Joe Wallace

A reader asks, “I have taken the ‘back to work’ counseling class twice. the first one expired but we found a house after it expired. Do you know if FHA can or will waive or make an exception on ‘being completed a minimum of thirty (30) days’ rule. The house is a ‘Fanny Mae’ house and is in Foreclosure. We don’t want to lose it.” The reader is referring to an earlier blog post we wrote about the FHA’s Back To Work Program which may permit, depending on circumstances, a borrower who has experienced foreclosure, bankruptcy or some other negative “economic event” to apply for an FHA home loan once more. According to the FHA official site, “FHA recognizes the hardships faced by these borrowers, and realizes that their credit | more...

March 26, 2015

Mortgage Interest Rate Trends

By Joe Wallace

Our last look at mortgage loan interest rate trends saw rates making an impressive comeback after some upwards momentum that pushed 30-year fixed rate conventional mortgages up into territory close to the four percent range earlier in the month. That improvement trend has been fairly consistent until yesterday, March 25, 2015, when rates took a big single-day move higher. For about a dozen days now rates have been on the downward trajectory, but yesterday’s move puts 30-year fixed rate conventional mortgages at a best-execution rate of 3.75% depending on the lender. Best execution rates are not available to all borrowers or from all lenders–your FICO scores, loan repayment history and other financial qualifications will play a large role in determining your access to mortgage loan rates. When it comes to | more...

March 26, 2015

FHA Loans and Non-Traditional Credit Histories

By Joe Wallace

There are many situations where a new borrower might want to apply for an FHA home loan, but without bringing a “traditional” credit history to the process. Do FHA loan rules permit a loan even when the borrower doesn’t have a typical credit history, has chosen not to use credit cards, etc? HUD 4155.1, the FHA rulebook for lenders, does make provisions for this. There’s a section of the rules governing what the FHA terms a “Non-Traditional Credit Report” or NTMCR for short: “NTMCRs are designed to assess the credit history of borrowers who do not have the types of trade references that normally appear on a traditional credit report. An NTMCR can be used as a • substitute for a TRMCR or an RMCR for a borrower without a | more...