Articles Tagged With: FICO Score Requirements

March 5, 2015

FHA Loan Reader Questions: Chapter 13

A reader asks, “I am a bit confused. My Chapter 13 was discharged in February 2014. Since then I have re-established my credit and my score is at 660 and no late payments. What is the sooner I will be able to pre-qualify for a loan and/or close on a FHA.” Chapter 13 bankruptcy is addressed specifically in FHA loan rules. FHA loans are still possible for qualifying borrowers, but the following rules apply. “A Chapter 13 bankruptcy does not disqualify a borrower from obtaining an FHA-insured mortgage, provided that the lender documents that • one year of the pay-out period under the bankruptcy has elapsed • the borrower’s payment performance has been satisfactory and all required payments have been made on time, and • the borrower has received written | more...

March 3, 2015

Interest Rate Caps On FHA ARM Loans

By Joe Wallace

In our last blog post we began discussing FHA adjustable rate mortgages, also known as ARM loans. We talked about how an FHA ARM loan works: “An ARM has four components: (1) an index, (2) a margin, (3) an interest rate cap structure, and (4) an initial interest rate period. When the initial interest rate period has expired, the new interest rate is calculated by adding a margin to the index. Your lender will disclose the margin at time of loan application (margins may vary from lender to lender, so it’s a good idea to shop around for a low margin).” We also mentioned the adjustable nature of the interest rates on these loans. “As the index figure moves up or down, the FHA official site says a borrower’s interest rate, | more...

February 18, 2015

FHA Mortgage Rate Trends: Worse, Then Better

By Joe Wallace

In 2015, saying that mortgage rate performance is “bad” is a bit like saying a slice of cake is mostly delicious–that is to say that in spite of upward pressure on mortgage loan rates, we’re still looking at best execution rates below four percent, and overall that’s a very good thing. 30-year fixed rate conventional loans edged all the way down to a best execution potential of 3.5% for some of the most qualified borrowers, and FHA mortgage loan rates have up until only very recently persisted in a best execution comfort zone of3.25%. Last week, going into a three-day holiday weekend we saw mortgage rates (best execution) struggling. Blame Friday the 13th, blame Greece and the EU situation, or simply refuse to look for a specific reason and concentrate | more...

February 17, 2015

FHA Loan Questions: Student Loans, Delinquency, and Credit Reports

By Joe Wallace

A reader asks, “I co signed a student loan in 2004 and the student loan went delinquent on February 2008. When will it come off my credit report? And will I be able to apply for a fha loan after it comes off?” To get the answer about when a student loan delinquency might come off a credit report, the reader will need to contact the credit reporting agencies to see what standards may apply. There are three major credit reporting agencies and a potential borrower would need to contact all three. The agencies are Equifax, Experian, and TransUnion. If the borrower’s credit rating is sufficient, and the derogatory credit information no longer shows up on the credit report, it’s entirely possible that the borrower might be able to successfully | more...

February 12, 2015

FHA Mortgage Loan Interest Rate Trends: Moving Higher

By Joe Wallace

FHA mortgage rates have been trending higher this week, with pressure on rates bringing 30-year fixed rate conventional mortgages up slightly higher every day in February so far. Bond markets and overseas economic news about the European Central Bank have contributed to those rates moving higher, but all the while, FHA mortgage loan rates have remained in a best-execution comfort zone of 3.25%. But that changed on Tuesday after significant upward pressure that changed conventional rates finally pushed FHA mortgage loan rates higher–now found at the time of this writing in a range between 3.25% and 3.5% for the most qualified FHA loan applicants. Best execution rates are not available to all borrowers or from all lenders. Your FICO scores, loan repayment history and other factors will determine your access | more...

February 5, 2015

FHA Loan Case Numbers: A Reader Question

By Joe Wallace

A reader asks, “How can I as a consumer find out if my FHA case number has been issued without asking lender? It does not do me any good to call lender I talk to a different person everyday. I keep getting told it has not been issued.” “I put in application on January 6th, 2015. I know they probable had to cancel my old case # because I had an appraisal done on the 12th. This is a refinance and I have been in this house for over 10 years. How long is it taking FHA to issue the new case numbers? I realize they are delays since the reduction went into place but it has been 6 days. Is there a number I can call to see if | more...

January 24, 2015

FHA Loan Rules for FICO Scores and Applications Post-Bankruptcy

By Joe Wallace

A reader asks, “What are the credit score and requirements to qualify for a FHA loan? Also, we filed bankruptcy over a year ago, what are the time limits of being discharged before someone can qualify for a FHA loan? Thank you in advance.” FHA loan rules for FICO score minimums are included on the FHA official site at www.FHA.gov. There is a chart there that breaks down the required minimum FICO scores for minimum financing, basic FHA loan program eligibility (with a higher down payment due to lower FICO scores) and cases where the FICO score does not qualify for an FHA home loan. Here is that chart: Note that FHA FICO score requirements are MINIMUMS. The lender may have higher standards. In fact, borrowers may find many lenders | more...

January 22, 2015

FHA Loan FICO Score Requirements: A Reader Question

By Joe Wallace

A reader asks, “We r trying to buy a new double wide and property combo. But our credit scores are 582 & 533. The place where we are getting the house thru said it probly wouldn’t be a problem to get the loan. What do u think?” The answer to this question is fairly simple. When a borrower’s FICO scores are within the FHA minimums for maximum financing, it’s then the lender’s decision to approve or deny the loan based on the lending standards of that financial institution. Let’s examine the FHA FICO score minimum chart as published in HUD 4155.1 and on the FHA official site: That’s an exact reproduction of the chart found in HUD 4155.1. As you can see, one borrower’s credit score is within the FHA | more...

January 13, 2015

FHA Loans, Recent Major Credit Purchases, and FICO Scores

By Joe Wallace

A reader asks, “I have a credit score of about 590, have some old stuff on my credit, which has been cleared up but still showing. Im looking for a $100,000 loan and have $8k to put down. I just last week got financed for a newer car, what are the chances I qualify for the FHA program since I am a first time home buyer?” FHA minimum FICO score requirements for maximum financing aren’t necessarily the same as the lender’s minimums–the lender is free to require a FICO score higher than the FHA minimum of 580 for maximum financing on a new purchase FHA mortgage loan. The credit report issue is also something the lender would have to address on a case-by-case basis. Depending on circumstances and the presence | more...

December 23, 2014

FHA Loan Reader Questions: Credit Scores for Co-Borrowers

By Joe Wallace

A reader asks, “Hi wanted to know if my gf has income and a co signer or co borrower can see be able to get an FHA loan if her credit ain’t high but the co person is high.” The answer to this question may depend greatly on the lender, the circumstances, and whether the borrower has compensating factors that might offset a lower FICO score. FHA loan rules spell out minimum credit scores and the lender will also have minimum credit score requirements which must be met. The FHA loan rulebook, HUD 4155.1 in Chapter Four has rules which spell out some standards for credit for all applicants, co-borrowers, etc. Chapter Four says in part: “If a credit score is available, it must be used to determine the decision | more...