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 homebuyers 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.
Credit Scores for FHA Loans
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FHA Loan Articles and Mortgage News
June 8, 2022 - If you apply for an FHA home loan, you may be required to use an escrow account for certain aspects of the transaction including a place to deposit earnest money before the deal closes. You may also be required to use escrow to pay your property taxes each year.
June 4, 2022 - Why can’t a home buyer put their trust in the appraisal alone? Why should you budget and pay for the optional home inspection? Inspections are only as optional as taking a used car for a test drive before agreeing to buy it.
June 3, 2022 - There are important things to remember about your credit and credit checks going into the application process for any major line of credit including a mortgage. If you know these things ahead of time you can avoid some common first-time borrower mistakes.
June 2, 2022 - There are many mortgages to choose from. There are conventional loans, plus government-backed home loan programs such as VA mortgages, and even USDA home loans. All options to consider. So why choose an FHA mortgage instead?
June 1, 2022 - You can build on your own lot using an FHA mortgage, even as a first-time home buyer. You will get the same 3.5% down payment minimum on an FHA construction loan as you would buying existing construction real estate.
