January 5, 2014

FHA Loan Credit Requirements

The Federal Housing Administration, or FHA, provides insurance for mortgage loans that are offered to lenders as a form of protection. Without this insurance, lenders can only recoup losses from a foreclosure by selling the property and hopefully turning a profit. But with the insurance, they are protected from any loss - they are reimbursed by the insurance, which is included in the borrower's monthly mortgage payment. These mortgages are great for lenders because of the decreased risk, and great for borrowers because they generally have better interest rates and less rigid approval requirements.

However, in order to qualify for an FHA loan, you should know the credit requirements for fha loan. Generally, you must have a credit score of at least a 580, but preferably over 600. If you've lost a home to foreclosure, you must wait at least two years before applying for an FHA loan. And, you must make sure that you do not have any existing debts that are considered to be past due or in default. If you're considering an FHA loan, discuss your credit history and concerns with a qualified loan officer. And keep in mind that even if you are initially denied for an FHA loan due to credit issues, you can always take a few months to fix the problems, and then re-apply.

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1 comment :

  1. Hi Jo! I was wondering if you would be willing to answer my question regarding your blog! I'm Heather and my email is Lifesabanquet1(at)gmail(dot)com :-)

    ReplyDelete

Thanks for sharing your thoughts!