Identify and Fix Credit Report Errors
Things to Do Before Applying for an FHA Loan
When the Federal Housing Administration announced rule changes to help strengthen finances and protect against risk, one of the biggest changes was requiring a minimum FICO score of 580 to qualify for the attractive 3.5 percent down payment on mortgage loans.
Know Your FICO Score
Applicants who fall below the 580 score will have to put down a 10 percent down payment in order to qualify for an FHA mortgage loan. For many applicants hovering just below that threshold, this policy change may serve as a great opportunity to take close look at their credit report and improve it.
The FICO score is actually comprised of your credit scores from the three national credit bureaus--Experian, TransUnion and Equifax. If your FICO score is just below the FHA limit, you should take the proper steps to check your credit report with the three agencies.
How to Check Your Credit Report
There are many ways people can check their credit scores. There are many online resources for people wishing to identify where they stand with lenders. 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.
While your credit reports and credit score are what lenders use to judge your reliability in paying back loans, errors in your reports can happen. Make sure they aren't hindering you and your life's plans.
Correct Errors as Soon as Possible
The longer you wait to correct your credit history, the more potential damage errors can do. Prevention is key, so if you don't use a credit monitoring service, you should consider one. If you do find any errors, send a letter to the bureau that reported it and clarify with them why you think it is incorrect. Be sure to provide proof and any other documentation that will help your claim.
If you're already in the process of applying for an FHA loan, notify your lender of your dispute with your credit report as well because your credit score indicates your creditworthiness. It never makes sense to suffer at disadvantages that were the result of something you didn't do.
Helpful Advice - Credit Scores and Loans
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FHA Loan Articles and Mortgage News
January 16, 2019 - Are FHA home loans, which are government-backed mortgages offered by participating commercial lenders, still available during a government shutdown or partial shutdown? This is an important question and borrowers or potential borrowers should know the facts.
January 11, 2019 - FHA One-Time Close construction loans are available in 2019 at higher FHA loan limits than in 2018. This is good news for anyone who wants a low-down payment construction loan that features only ONE application and closing date.
January 8, 2019 - The sharing economy has made entrepreneurs out of many who never thought of earning income by being an Uber driver or acting as an Airbnb host. Some are tempted to buy a multi-unit home and begin offering it for rent to Airbnb users. Is this possible with an FHA mortgage?
January 4, 2019 - FHA loan limits are going up for the second year in a row. In 2019 your ability to buy a 1-4 unit home gets a boost thanks to the higher limits. FHA loan FICO score requirements and other credit rules of the program will NOT change in 2019.
January 2, 2019 - If you’re looking at home loan options, especially for the first time, you might wonder why some buyers choose to pay more out of pocket up front on their mortgage loans rather than making the bare minimum down payment and financing closing costs.
FHA.com Reviews
FHA.com is a one-stop resource for homebuyers who want to make the best decisions when it comes to their mortgage. With our detailed, mobile-friendly site, individuals can access information about different FHA products, the latest loan limits, and numerous other resources to make their homebuying experience easier. Take a look at some of the reviews from other FHA.com visitors!
