FHA Mortgage Loan Programs
There are various FHA mortgage loan programs that caters to first time home buyers and borrowers with lower credit scores. FHA mortgage loan programs have generous debt to income limits of up to 56.9%. FHA mortgage loan programs also allows for up to a 6% seller’s concession towards closing costs and prepaid escrows where the buyer does not have to come up with any closing costs. FHA mortgage loan programs also allow for the buyers to have a non-occupied co-borrower to qualify for their debt to income ratio. FHA mortgage loan programs also allows the borrower to accept a gift from a family member towards the down payment of their home.
FHA Mortgage Loan Programs For Buyers With Unpaid Collection Accounts
FHA mortgage loan programs allows buyers with open collections to get mortgage loan approvals. There are restrictions with FHA mortgage loan programs such waiting period restrictions for prior bankruptcy and foreclosure. There is a mandatory waiting period of 2 years from the date of the bankruptcy discharge for a home buyer to qualify for a FHA loan. There is a 3 year mandatory waiting period from the date of the recorded date of a foreclosure for a home buyer to qualify for a mortgage loan. However, just passing the waiting period does not guarantee a mortgage loan approval. Mortgage lenders want to see re-established credit and no lates after a bankruptcy and/or foreclosure. You can qualify for FHA mortgage loan programs with a credit score of 530 FICO. For those that have credit scores between 530 FICO and 580 FICO, the minimum down payment required is 10%. For those who have credit scores between 580 FICO and 620 FICO can qualify for a FHA mortgage loan but the debt to income ratio limits are set at 45% DTI. For credit scores of greater than 620 FICO, the debt to income ratio limits are 56.9%.
Overdrafts and bounced checks is a definite red flag if you intend on applying for FHA mortgage loan programs. FHA mortgage lenders do not want to see you have any bank overdrafts in the past 12 months of you applying for a mortgage loan. Even a $5.00 overdraft will raise a red flag. If you have bank overdrafts, the chances are that you will get a mortgage loan denial if the mortgage underwriter finds out. To avoid the underwriter not using the bank overdrafts, you need to go to your bank and get a 60 day printout of your bank statements, signed, dated, and stamped by the bank teller. There are no year to date overdraft fee history on printouts. However, if you supply 60 days actual bank statements, the year to date overdraft fees will show up on bank statements. All that is required is 60 days of bank statements and the printouts should be sufficient. Your mortgage broker should screen and scrutinize your bank statements before he submits it to underwriting and his job is to catch this prior to landing on the underwriter’s desk.