FHA Loans – Low Down Payment Mortgages for those with Poor or Bad Credit #free #credit #score #wiki

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According to Ellie Mae’s April 2013 Origination Insight Report, 20 percent of all new mortgage loans in the first quarter of 2013 were FHA loans.

Qualifying for an FHA loan:

FHA lenders will review your credit history, your income and assets, your job history and the value of your home (or the home you want to buy) before approving a loan. In addition to documentation that proves you have some assets in the bank and a steady job, lenders will look closely at these two factors:

Credit score – While the official FHA guidelines say that you need a credit score of 580 or above. very few lenders qualify anyone for an FHA loan unless their score is 620 or 640 or above. In fact, according to Ellie Mae, the average credit score for an approved FHA loan in the first quarter of 2013 was 713 for a refinance and 698 for a purchase loan. The average credit score of borrowers who were denied an FHA loan was 671 for a refinance and 669 for a purchase loan.

Debtto-income ratio – If you have debt problems, your minimum payments on all your debt may be too high compared to your gross monthly income. FHA lenders typically require an overall debt-to-income ratio at a maximum of 43 percent. In the first quarter of 2013, the average debt-to-income ratio for refinance loans was 38 percent and 41 percent for purchase loans. The average debt-to-income ratio for loans that were turned down was 44 percent for an FHA refinance and 45 for a purchase loan.

Enter your information on the form on this page to get the lowest mortgage rates and to find out if you qualify for an FHA mortgage. Consult with a lender even if you don’t qualify right now, because a good lender can show you ways to improve your credit for a future FHA loan qualification.

About the Author

Michele Lerner, author of “HOMEBUYING: Tough Times, First Time, Any Time”, has been writing about personal finance and real estate for more than two decades for a variety of publications and websites including The Washington Post, The Motley Fool, Investopedia, Insurance.com, HSH.com, SavingsAccount.com, National Real Estate Investor magazine, The Washington Times, Urban Land magazine, NAREIT’s REIT magazine and numerous Realtor associations.

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If you’ve had credit problems in the past you may be concerned about qualifying for a mortgage loan. Depending on your current financial position, an FHA loan may be the best option for a home purchase or refinancing.

If you are a homeowner with an FHA loan or conventional loan and want to refinance, a new FHA mortgage may be an option. Even homeowners with low equity may be able to refinance with an FHA loan.

If you hope to rebuild your credit rating and buy a home, one option to help you get started is an FHA loan. One type of FHA home mortgage, called a 203(k) loan, can even let you wrap renovation costs into the financing.

While FHA (Federal Housing Administration) home loans still may be the best mortgage program for homebuyers with little cash and lower credit scores, changes in recent years to FHA loan requirements mean they are harder to qualify for and a little more costly.





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