FHA Credit and Your FHA Loan
Take the Steps to Review Your Credit
FHA loan rules apply for all borrowers when it comes to basic minimum credit standards. The FHA loan requirements that will affect your transaction include FICO score rules, down payment requirements, and the basic terms of your mortgage.
You cannot be rejected for an FHA home loan on the basis of factors that have nothing to do with your financial qualifications, employment, income, being an owner/occupier, etc. A home may not be suitable for an FHA loan, a borrower may be denied the loan because he or she doesn't intend to live in the property as the primary residence, or because of factors that affect the economic life of the property.
Credit Requirements for FHA Loans
FHA loans provide great assistance to many first-time homebuyers by offering mortgage loans with lower down payments. While this is a benefit for many people, recent changes in FHA Loan credit requirements may have put the loans just out of reach for some would-be homeowners with questionable credit history.
- The Facts About FHA Credit Requirements and FICO® Scores
- What FICO® Score Do I Need Buy A Home?
- Questions About Credit and Buying a Home
Benefits of Having Good Credit
Homebuyers looking to take advantage of great FHA loan benefits should already know they need to establish the best possible credit rating. FHA loan applicants with a better credit rating increase their options for mortgage or refinance loans.
In order to qualify for the low 3.5% FHA loan down payment, applicants will need a FICO® score of at least 580. Those that don't meet that criteria will have to put a down payment of 10% on the mortgage they want.
- Qualifying for a Mortgage: 5 Things to Know
- Facts About Your Credit Scores
- How to Prepare Your Credit for an FHA Home Loan
Improving Your Credit
If your credit is less than solid, consider delaying your home purchase and work on improving their credit scores. Applicants who have a minimum credit score of less than 500 are not eligible for FHA mortgages.
While FHA loans are a great option for people buying a house, applicants can make the process even easier if they take steps toward ensuring their credit history is in tip-top shape. FHA advises prospective homebuyers to approach the loan process with their best possible credit history to eliminate any potential risk of not qualifying.
- FHA Loans, Missed Payments, and My Credit Report
- Minimum Credit Scores for FHA Loans
- Ways to Improve Your Credit Ahead of Your Home Loan
Fixing Credit Report Errors
Some borrowers who want to apply for an FHA loan find their applications held up by problems with what is on their credit report. Take proper steps to check the accuracy of your credit report with Experian®, TransUnion® and Equifax®.
Once you've gotten your report from the three bureaus, carefully examine your credit history for anything out of the ordinary, such as unauthorized loans taken out in your name, incorrect late payment records or anything that seems questionable, no matter how minor you think it is.
- Credit Monitoring, Data Security Breaches, and Your FHA Loan
- The Facts About FHA Credit Requirements and FICO Scores
- FHA Home Loan Applications and Credit Freeze Issues
Identity Theft and Fraud in the News
Now more than ever, it is crucial to pay close attention to your credit reports due to elevated security breaches, hacks, and security compromises. No major corporation is immune to these attacks-including the credit reporting agencies themselves.
We've listed a timeline of some of the most headline-grabbing hacks reported in recent years. Remember, these are only SOME of the incidents you may have heard about; each one is a good example of why it pays to continuously monitor your credit.
- FHA Home Loan Applications and Credit Freeze Issues
- Credit Monitoring, Data Security Breaches, and Your FHA Loan
- Credit Advice for Home Loan Applicants
SEE YOUR CREDIT SCORES From All 3 Bureaus
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FHA Loan Articles and Mortgage News
June 9, 2023 - If you are interested in building or buying a home, there is an FHA loan that can help. But if you have never done so, you may worry about your ability to be approved for the mortgage. What can help a borrower’s chances when it’s time for the lender to decide whether to approve or deny their loan?
June 3, 2023 - If you’re thinking about buying a home this year and you need to save more money upfront on your down payment, an FHA mortgage is an option to consider thanks to its minimum 3.5% down payment. There are other perks to FHA loans, as we’ll discover in this article.
May 30, 2023 - Knowing the down payment rules before you start saving for your home loan may make the entire process more efficient, especially if you know you’re required to give the lender the sources of your down payment money and document it accordingly.
May 27, 2023 - The reasons range from the obvious (low FICO scores) to the not-obvious-at-all (already having one FHA mortgage) and beyond. FHA loan rules say FICO scores between 500 and 579 technically qualify (with a higher down payment), but lender standards also apply.
May 23, 2023 - What kind of FHA home loan do you need to buy a home? Do you want to build a home on your own lot from the ground up? That’s the job of an FHA One-Time Close construction loan, which differs from the type of FHA mortgage you need to buy an existing property.
