FHA Loan Applications and Your Credit Report
April 16, 2013
Are you ready for an FHA guaranteed home loan application? When it's time to fill out the forms, borrowers are asked to list a variety of items including vital credit data. Your FHA loan application will include details of your recurring financial obligations; these are required because the lender must determine your debt-to-income ratio.
It's tempting in some cases to consider leaving items off the application, but it's not safe to assume that your lender won't find out about them. Do you know what goes into your credit report and what the lender has access to when he or she is processing your application data?
Many borrowers don't, but they definitely should.
Here's what the FHA loan rulebook says about what the lender is required to access in order to properly review your application for an FHA loan:
All inquiries made within the last 90 days
All credit and legal information not considered obsolete under the Fair Credit Reporting Act including information for the last seven years regarding
-bankruptcies
-judgments
-lawsuits
-foreclosures
-tax liens
For each borrower debt listed:
-the date the account was opened
-the high credit amount
-required payments
-unpaid balance
-payment history
Knowing your lender is required to access these items can help you to be as thorough as possible when completing your application and help you to prioritize your pre-purchase home loan planning.
If you have missed payments or other issues on your recent credit report, consider getting in touch with the FHA for a referral to a HUD-approved housing counselor who may be able to help you in the preparation stages for an FHA loan--contact the FHA at 1-800 CALL FHA for more information on how these referrals work and what the benefits can be to you before applying for an FHA home loan or refinance loan. In some cases there may be a fee associated with the referrals, but there are exceptions in these cases for borrowers with a demonstrated financial need. Ask an FHA representative about whether such fees apply in your circumstances or not.
It's tempting in some cases to consider leaving items off the application, but it's not safe to assume that your lender won't find out about them. Do you know what goes into your credit report and what the lender has access to when he or she is processing your application data?
Many borrowers don't, but they definitely should.
Here's what the FHA loan rulebook says about what the lender is required to access in order to properly review your application for an FHA loan:
All inquiries made within the last 90 days
All credit and legal information not considered obsolete under the Fair Credit Reporting Act including information for the last seven years regarding
-bankruptcies
-judgments
-lawsuits
-foreclosures
-tax liens
For each borrower debt listed:
-the date the account was opened
-the high credit amount
-required payments
-unpaid balance
-payment history
Knowing your lender is required to access these items can help you to be as thorough as possible when completing your application and help you to prioritize your pre-purchase home loan planning.
If you have missed payments or other issues on your recent credit report, consider getting in touch with the FHA for a referral to a HUD-approved housing counselor who may be able to help you in the preparation stages for an FHA loan--contact the FHA at 1-800 CALL FHA for more information on how these referrals work and what the benefits can be to you before applying for an FHA home loan or refinance loan. In some cases there may be a fee associated with the referrals, but there are exceptions in these cases for borrowers with a demonstrated financial need. Ask an FHA representative about whether such fees apply in your circumstances or not.
Do you know what's on your credit report?
Learn what your score means.
