Why FHA- with your Credit Score
Why FHA- with your Credit Score
Did you know FHA loans has been around since 1935? That is
pretty amazing if you think about it, this type of loan has
been around since right after the "Great Depression." Also
a added benefit of FHA is that it does not have credit
score requirements. With the current lending market and
tighten up on credit scores it makes perfect since to look
at a FHA loan. Depending on where you are going to buy will
determine the max loan amount you can get with FHA. Yes,
FHA loans have loan limits. Here is a link where you can
look up loan limits by state and city.
Secondary Market Credit Score Requirements
With all the foreclosures going on, banking has made
changes as to what type of loans they will buy. FHA does
not have a credit score requirement to insure a FHA loan,
but the banks that buy the loans do. For example, most
lenders underwrite their loans, and then sell them on what
is called the secondary market. This is a market where
banks buy and sell mortgage loans. The current credit score
requirement with this market is a 580 credit score. So if
you have this type of credit score, you might qualify for
This type of score is not considered the best of scores,
but could get you in a 30 year fixed mortgage. Your
interest rate will be higher because of you credit score,
but it's better than renting. Typically credit scores above
a 680 is considered good credit, so if you were wondering,
that is the where you should be.
Here is a credit score breakdown per "My FICO."
* Excellent: over 750
* Very Good: 720 or more
* Acceptable: 660 to 720
* Uncertain: 620 to 660
* Risky: less than 620
Advantages of FHA
Obviously FHA's biggest advantage is you can get financed
with fairly low credit scores. You don't need great credit
history that is required with Conventional loans. Here are
some highlights to secure a FHA loan
- 3 lines of credit reporting on your credit report in good
standing for the last 12 months
- If you don't have any credit, FHA requires 2 months
mortgage payment in bank after closing
- Good 12 month rental history
- 2 years work history.
- You can count college as work history, underwriters like
to see that you graduated, and are working in profession
- Only 3% down payment, you can use Down Payment Assistance
in place of this.
- No credit score requirements
- 30 year fixed mortgage
- Competitive rates
FHA is not only for individuals with bad credit. This loan
is for people with good credit as well. If you have a 720
credit score, and don't want to put down a bunch of money,
it makes perfect since to go FHA, as long as you are trying
to buy within the FHA loan limits.
If you are in the market to buy, and you are not sure where
your credit score stands, find out. Pull a copy of your
credit report with credit scores. A educated consumers
saves on interest rates and terms.
About the Author:
About the Author: Mike Clover is the owner of
www.creditscorequick.com/ . CreditScoreQuick.com is
the one of the most unique on-line resources for free
credit score report, fico score, Internet identity theft
software, secure credit cards, and a BlOG with a wealth of
personal credit information. The information within this
website is written by professionals that know about credit,
and what determines ones credit worthiness.
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