FHA Loan Tips for Improving Credit
Track Your Credit Score and Stay on Top of Problems
While FHA loans are known as a great service for people looking for help buying a house, applicants can make the process even easier if they take steps toward ensuring their credit history is in tip-top shape. The agency advises prospective home buyers to approach FHA loans with their best possible credit history to eliminate any potential risk of not qualifying.
Whether you're looking for a loan to mortgage a new house or to refinance a house you already own, it makes the most sense open up all your options with an optimal credit rating. The FHA recommends having a satisfactory payment history of at least one year before applying for a loan.
Credit Tips for Your FHA Loan
Here are some tips to help you on your way:
- Take a Close Look at Your Credit Reports
You don't know what could be hurting your credit score unless you actually check. Get your credit reports from the three national credit bureaus--Experian, Equifax and TransUnion--at no cost and comb them over for anything suspicious or questionable. - Dispute Inaccuracies
If you find errors on your credit report, notify the reporting bureau in writing so you have a record. Provide any additional records or evidence you have to support your dispute. - Find Professional Help
The FHA recommends applicants with credit problems get help from a Consumer Credit Counseling program. A credit counselor can help you get back on track. - Bankruptcy / Foreclosure
If you've suffered from a bankruptcy or foreclosure in the past few years, you might still be able to qualify for an FHA loan. Develop a satisfactory payment history, re-establish good credit and meet the other FHA requirements.
While your credit history is just one of the many factors that make up your eligibility for an FHA loan, it is no doubt one of the most important. Having a higher score not only helps you qualify, you can also benefit from the low 3.5 percent down payment on mortgage loans available to applicants with a FICO score over 580. FHA approved lenders don't take your credit history lightly, and neither should you.
Helpful Advice - Credit Scores and Loans
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FHA Loan Articles and Mortgage News
January 15, 2020 - If you've already started saving for your down payment, your appraisal, compliance inspections, and other costs, you’re well ahead of the game. Those who haven’t started truly planning and saving may feel a bit lost when trying to get ready for the loan.
January 12, 2020 - FHA loan rules include the ability for borrowers who intend to be owner-occupiers to buy multi-unit properties. For an FHA loan on a multi-unit home to be approved, the borrower must occupy at least one unit. FHA home loans are for primary residences only.
January 9, 2020 - FHA One-Time Close construction loans are intended to help those who want to own and occupy a home to build from the ground up on their own land. There is also a VA loan equivalent to the FHA construction loan that, starting in 2020, features no down payment.
January 7, 2020 - FHA loan guaranty limits are higher again in 2020. This comes after last year’s increase in loan limits and a fairly good year for mortgage interest rates. FHA loans have loan guaranty limits that help establish the maximum loan possible for a given market.
January 6, 2020 - One mistake about house hunting that’s easy to make is assuming that property values are similar no matter where you look. If you did house hunting upstate, your results downstate may be different. One area may be experiencing a plateau in values while another may not.
