Articles Tagged With: FICO Score Requirements

December 9, 2014

FHA Loan Credit Issues: A Reader Question On Disputed Accounts

A reader asks, “I would like to know how to get an FHA loan, I had a Bankruptcy discharged in Aug. 2010. This is my problem I got a credit card to improve my credit score. I was paying faithfully, then another card company that I already had Two that company. I was paying faithfully on those accounts also.” “Well when the credit company took over that account I didn’t realize I now had 3 accounts with that bank. Another reason I didn’t know was, I moved and one statement was going to the old address. When the two statements came . So I would go onto the computer and pay my 2 accounts..My problem is on my credit report shows 30,60,30,60, 90 days late. What can I do to | more...

December 4, 2014

FHA Mortgage Loan Rate Trends

By Joe Wallace

The Thanksgiving holiday interrupted several days worth of falling mortgage loan rates. We saw gains over six business days (holiday weekend falling in between some of those days) with best execution interest rates moving back into the high three percent zone for 30-year fixed rate conventional mortgage rates. FHA rates benefited as well,–FHA mortgage rates fell (best execution) to 3.25%, and while in many cases we see FHA loan interest rates having a hard time breaking out of a comfort zone at the same time conventional rates change, December 1st saw FHA mortgage loan rates drop from the previous business day’s best execution rate of 3.5%, but would eventually settle into a range of numbers. FHA mortgage loan rates moved into that range of best execution rates following some upward | more...

November 26, 2014

Holiday Spending and FHA Loans: What To Consider

By Joe Wallace

This week, shoppers brace themselves–and their credit cards–for Black Friday and the official start of the holiday shopping season. If you are in the planning stages for an FHA home loan or a refinance loan, there may be some considerations to make when it comes to your holiday spending. At least where your credit cards are concerned. The holiday shopping season is probably the time of year when it’s most tempting to apply for a new credit card account or even multiple accounts. But opening new lines of credit when you’re just about to apply for a new home loan or refinance loan is a bad idea. Your debt-to-income ratio can suffer when new lines of credit are opened, and a lender may need to consider both the used and | more...

November 13, 2014

FHA Loan Credit Issues: A Reader Question

By Joe Wallace

A reader asks, “I am in the process of trying to rebuild my credit, but am finding it difficult to acquire in my own name. I have a bankruptcy discharged in Feb 2013. I make all utility, insurance and rent payments on time or within the allotted grace period. Altho I am financially responsible, I feel it may not reflect in my credit report with few or no recent accounts reporting…” “What length of time will impact my credit report/score with credit card usage?? …My mother recently obtained a small auto loan (on my behalf) thru a credit union to get the most affordable rate & payment option. She has me listed as co-signer, will this also report on my credit & impact my payment history & score as if | more...

July 2, 2014

FHA Refinance Loans and FICO Scores: A Reader Question

By Joe Wallace

A reader asks, “Would I qualify for and FHA Loan refinance with a credit score of 589 with no credit card debt, and all house payments have been made on time for the last three years? I really need to refinance. Please help!” FHA loan rules published in HUD 4155.1 state that a borrower with a credit score above 500 is technically eligible for a VA loan, though between the range of 500 and 579 the borrower is not eligible for maximum FHA financing–it’s limited to 90%. That means a 10% down payment is required at a minimum according to FHA regulations for new purchase home loans. For refinance loans, the implications are different–speak to your loan officer about what might apply in terms of an FHA cash-out refinance. The | more...

June 30, 2014

FHA Loan FICO Score Rules: A Reader Question

By Joe Wallace

A reader asks, “How low can a credit score be? i know mine is about 540. If it is for low income people with BAD credit why should the score matter at all?” The FICO score question has two important aspects borrowers should be aware of. FHA loan rules establish a minimum FICO score requirement. HUD 4155.1 includes a chart to show the FICO minimums and how maximum financing is affected depending on what the borrower’s FICO score is within these ranges: FHA minimum scores are just that–the minimum numbers required. Lenders can and often do have more strict FICO score rules than what you see printed above. There’s no such thing as a “bad credit FHA home loan”. Borrowers who do not meet the minimums listed above can’t be | more...

June 12, 2014

FHA FICO Score Requirements: A Reader Question

By Joe Wallace

A reader asks, “I was told that i could qualify for a FHA loan with a credit score of 608. I am a first time home buyer. Is the information I was given true?” It may sound glib to say that the answer depends on who told you, but in this case that is true. Technically speaking FHA loans are available, according to FHA loan standards in HUD 4155.1, to those in the FICO score range the reader is asking about. However, the FHA loan rules are not the only ones at work in these case. Lender FICO standards can be, and ofter are, higher than the FHA rulebook minimums. This is allowed and there’s nothing wrong with a lender who requires a higher FICO score as long as those | more...

June 5, 2014

FHA Loan Reader Questions About Credit Issues

By Joe Wallace

In response to one of our earlier posts, FHA Loan Credit Report Rules, a reader asks, “So if you have bad credit you can’t get approved by FHA? I thought the whole point of FHA was to help people with credit issues buy a home….” The key to understanding the FHA loan program’s requirements in this area is to know what the FHA loan rulebooks says about credit in general, and creditworthiness of the FHA loan applicant. According to HUD 4155.1, Chapter One, Section A, the lender or underwriter is responsible for making sure the loan applicant is able to repay the loan and willing to do so based on credit scores, credit history and related factors: “The purpose of underwriting is to • determine a borrower’s ability and willingness | more...

May 13, 2014

FHA Loan Credit Report Rules

By Joe Wallace

Going into the FHA loan application process for the first time? It can be helpful to understand what your lender is looking for from your FHA loan application. Do you know the FHA’s rules for credit and how credit reports are handled by your loan officer? FHA loan rules state that all applicants for the loan must be checked–credit reports must be pulled, employment history and other financial qualifying information is required. HUD 4155.1 Chapter One has rules and instructions for the lender in these areas. Under “Required Credit Information” we find the following: “A credit report submitted with a loan application must contain all credit information available in the accessed repositories. Additionally, for each borrower responsible for the debt, the report must contain all of the information available in | more...

May 9, 2014

FHA Loan Rules For Loan Approval: Previous Housing Obligations and Your Credit

By Joe Wallace

When you fill out your FHA loan application paperwork online or in person, it’s obvious that part of the qualification process involves having your credit scores examined and your employment verified. What may not be so obvious is that the lender is also looking for patterns of reliability in areas such as the timely payment of your monthly obligations. Some FHA loan applicants might mistakenly assume that while late or missed mortgage payments might be a factor that missed rent payments aren’t held in the same esteem. Is this true? Not according to HUD 4155.1 Chapter Four, Section C, which has instructions for the lender on checking credit report data. A strict interpretation of Chapter Four reveals no difference between how the FHA or the lender should view late or | more...