Articles Tagged With: FICO Score

December 19, 2016

FICO Scores And FHA Loans

Your credit report and FICO scores are very important factors when it comes to getting an FHA loan approved. Do you know what your FICO score is and how it affects your home loan? The U.S. government’s consumer watchdog agency, the Consumer Financial Protection Bureau, has a definition of FICO scores on its’ official site, which includes the following: “A FICO score is a particular brand of credit score. A credit score is a number that is used to predict how likely you are to pay back a loan on time. Credit scores are used by companies to make decisions such as whether to offer you a mortgage or a credit card. They are also used to determine the interest rate you receive on a loan or credit card, and | more...

June 20, 2016

Mortgage Rate Trends: Slightly Higher On Friday

By Joe Wallace

At the end of the day on Friday, mortgage loan rates had moved higher, but not by much and certainly not enough to pull rates out of territory many are describing as “lowest in years”. In the past week or more we’ve seen rates move, at certain points, into lows that for conventional 30-year fixed rate mortgages actually rivals the FHA loan offerings which are typically lower. Last week we saw 30-year fixed rate conventional mortgages move as low as 3.375% for some of the most competitive lenders, and around 3.625% for others, with a best execution average somewhere in the middle. This territory is in direct best execution competition (technically speaking) with FHA loans which are still in a best execution comfort zone between 3.25% and 3.5%. FHA loan | more...

March 10, 2016

FHA Loan Standards: Charge-Offs and Collections

By Joe Wallace

We’ve gotten several questions in the comments section about certain credit issues related to charge-offs, collections and other forms of derogatory credit information. With those questions in mind it seems like a good time to review the rules as published in HUD 4000.1 that instruct the lender on how to interpret these things and decide on loan approval. But before we start looking at the rules, it’s very important to point out that the information listed here are FHA minimum standards. A given lender or financial institution may have more strict requirements depending on circumstances, state laws, or other factors. Remember that FHA loan rules don’t override state law and lenders are free to require higher standards as long as they are in compliance with federal laws. When it comes | more...

January 12, 2016

FHA Refinance Loans And FICO Scores

By Joe Wallace

Are you considering an FHA refinance loan? Are you concerned about your credit scores, or whether and new loan will require a credit check? There are some important issues to keep in mind about FHA refinancing that can help you in the planning stages of your new loan application. First, not all FHA refinance loans have an FHA-required credit check. FHA Streamline refinance loans (for existing FHA home loans only) have no FHA requirements for a new credit check though your lender may require one anyway. That is permitted under the rules for FHA refinances. FHA Streamline refinance loans are intended for owner-occupied homes that were originally purchased with an FHA mortgage. However, the borrower does not have to stay with the original lender that issued the loan. You are | more...

October 19, 2015

CFPB Updates Home Mortgage Disclosure Act

By Joe Wallace

Friday October 15, 2015, the Consumer Financial Protection Bureau (CFPB) announced it is updating mortgage loan regulations–specifically the Home Mortgage Disclosure Act (HDMA)–to make the home loan process more transparent and easier to understand. According to the to the CFPB official site, HMDA requires, “many financial institutions to collect, report, and disclose information about their mortgage activity. The original law was enacted by Congress 40 years ago to respond to concerns that some banks may be failing to serve their communities.” HMDA, the press release states, is a statute that provides “the public and policymakers with information about the mortgage market and ensures market transparency.” What does the HDMA do? According to the Consumer Financial Protection Bureau, it: –Helps to show whether lenders are serving the housing needs of their | more...

October 6, 2015

FHA Loans, FICO Scores, and First-Time Home Buyers

By Joe Wallace

A reader asked us a question about FHA loan FICO score requirements in the comments section recently, saying, “Im a first time home buyer and my credit score is 599 to 620 avg. from all 3 bureaus. All my credit cards are paid on time never been late. I dont have any negative accounts on my credit report. Do I have a chance of being approved?” There are two important issues to address with this reader’s question. The first is the reader’s status as a first-time home buyer. The FHA loan program itself does not provide any special status, preference, or benefits for first-time home buyers. That’s not to say that your chosen lender, won’t, or that there is not a state or local assistance program for first-time home buyers. | more...

September 17, 2015

FHA Loan Credit Requirements Versus Lender Credit Requirements

By Joe Wallace

We get many questions about the difference between FHA loan minimum FICO score and credit requirements and the lender requirements for same. Here’s one of the latest examples: “Seems like there is a lot of contradiction between what is on the FHA site and what the FHA Reps. are answering the consumers the questions. Why have FHA guidelines if the lenders dont have to follow them and can overrule them with their own? I have a credit score of 580 and a one time 30 day late mortgage payment in the past 12 months…” There were other details in the reader question, but the information above was the most pertinent. And the answer to the first part of the question is fairly simple. FHA loan FICO score requirements and other | more...

August 26, 2015

FHA Home Loans For Veterans

By Joe Wallace

There are many home loan options for veterans of the United States military, including the VA loan program. But some veterans choose the FHA home loan program instead–there are many reasons why some might choose FHA over a VA loan, and for those who are considering the option, there are some important things to remember about the FHA mortgage loan or refinance loan program. The first is that FHA home loans and refinance loans offer many similar features to VA loans. For example, veterans applying for an FHA mortgage have the option of getting an Energy Efficient Mortgage (EEM) option added to the loan, much in the same way as the VA loan program. An FHA EEM requires the lender and borrower to work together to determine the cost effectiveness | more...

August 11, 2015

FHA Mortgage Rate Trends: Starting Out Higher

By Joe Wallace

In our last report we mentioned that Friday saw a rally for mortgage rates; the following Monday, August 10, served to wipe out those gains. In spite of that move higher, many lenders are offering best execution rates for 30-year fixed rate conventional mortgages (at the time of this writing) between 3.875% and 4.0%. We’ve had many days of improvement with minor adjustments here and there and a variety of sources report the rate activity we’re currently seeing could be deemed fairly typical. Overseas headlines about the Greek debt crisis have lost their influence on rate activity at home, it seems, but the China stock market woes could easily become an influence again if breaking news that influences investor behavior occurs. FHA mortgage loan interest rates are holding steady in | more...

July 29, 2015

FHA Loans And Your Credit

By Joe Wallace

A reader got in touch with us this week to ask if it is possible to get an FHA mortgage loan even if the borrower doesn’t have “perfect credit”. While it’s not clear what the reader means by that phrase, we can answer the question in a general way. The simple answer is yes, borrowers can apply for and get approved for FHA home loans with less than perfect credit, but much depends on the nature of the credit issues on your report and whether there’s an overall pattern of responsible credit use the lender can use to justify approving your home loan. FHA loan rules are clear that individual mistakes in a borrower’s past should not be the sole determining factor when it comes to approving or denying an | more...