What Will Disqualify You From Getting an FHA Mortgage?
May 27, 2023
What can disqualify you from getting an FHA mortgage? The reasons range from the obvious (low FICO scores) to the not-obvious-at-all (already having one FHA mortgage) and beyond. Here are some major reasons you could be turned down for a mortgage.
Your FICO Scores Are too Low
If your FICO score is below 500, FHA loan rules say you cannot qualify for an FHA Single-Family Home Loan.
FHA loan rules say FICO scores between 500 and 579 technically qualify (with a higher down payment), but lender standards also apply, and a FICO score in the middle of the 500 range may be too low for a participating FHA lender to justify approving the loan.
You Applied for Credit After Applying for Your FHA Mortgage
It’s true that your loan officer is likely to reject a loan application if you apply for more credit on top of your mortgage loan. Don’t apply for more credit anywhere else if you submit a mortgage application for loan approval.
You Have too Much Debt
If monthly financial obligations take up more than half your income, your lender will have a harder time justifying loan approval.
You Have not Paid Child Support as Ordered
If you have not met your financial commitment for child support as part of a court-ordered agreement, you may not qualify for an FHA mortgage.
You Have Delinquent Student Loans
Your lender may not approve your FHA mortgage application if you are not currently on your student loan debt. Delinquent student loan borrowers should manage that issue first, then consider applying for a mortgage loan.
You Have Unpaid Federal Debt
If you owe the federal government money but are delinquent on the payments, your FHA loan application is likely to be denied. This applies to a variety of debt, including Small Business Administration Loans.
You Already Have an FHA Mortgage
Exceptions apply for changes in career or family size, but in general, if you already have an FHA mortgage and it is not fully paid off, you can’t apply for another one until you’ve paid the current mortgage off, sell the property, or refinance with a conventional mortgage.
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Your FICO Scores Are too Low
If your FICO score is below 500, FHA loan rules say you cannot qualify for an FHA Single-Family Home Loan.
FHA loan rules say FICO scores between 500 and 579 technically qualify (with a higher down payment), but lender standards also apply, and a FICO score in the middle of the 500 range may be too low for a participating FHA lender to justify approving the loan.
You Applied for Credit After Applying for Your FHA Mortgage
It’s true that your loan officer is likely to reject a loan application if you apply for more credit on top of your mortgage loan. Don’t apply for more credit anywhere else if you submit a mortgage application for loan approval.
You Have too Much Debt
If monthly financial obligations take up more than half your income, your lender will have a harder time justifying loan approval.
You Have not Paid Child Support as Ordered
If you have not met your financial commitment for child support as part of a court-ordered agreement, you may not qualify for an FHA mortgage.
You Have Delinquent Student Loans
Your lender may not approve your FHA mortgage application if you are not currently on your student loan debt. Delinquent student loan borrowers should manage that issue first, then consider applying for a mortgage loan.
You Have Unpaid Federal Debt
If you owe the federal government money but are delinquent on the payments, your FHA loan application is likely to be denied. This applies to a variety of debt, including Small Business Administration Loans.
You Already Have an FHA Mortgage
Exceptions apply for changes in career or family size, but in general, if you already have an FHA mortgage and it is not fully paid off, you can’t apply for another one until you’ve paid the current mortgage off, sell the property, or refinance with a conventional mortgage.
------------------------------
RELATED VIDEOS:
Sometimes It Pays to Refinance
Don't Forget Your Closing Checklist
Your Home Loan is Called a Mortgage
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