Qualifying For FHA Loans
Advice On Qualifying For FHA Loans:
FHA loans are mortgage loans that is granted by private mortgage lenders but is guaranteed by the Federal Housing Administration in the event the mortgage loan borrower defaults on the loan. FHA loans are more popular now than ever and is an excellent way of making the dream of home ownership available to first time home buyers and those who have had prior bad credit. Qualifying For FHA Loans have much more lenient qualifying standards than conventional loans and home buyers with high debt to income ratio can qualify for FHA loans where otherwise they could not have qualified for conventional loans.
Qualifying For FHA Loans: Not All FHA Lenders Have Same Guidelines
Every mortgage lender have different mortgage lending guidelines for FHA loans. One mortgage lender might require a minimum credit score of 640 FICO for their FHA Loans mortgage borrowers while others might have a 620 FICO requirement. There are FHA loans mortgage lenders that will even take a mortgage loan borrower with FICO scores as low as 530 FICO. If you get denied by a mortgage lender for a FHA insured mortgage loan, there are other mortgage lenders that will approve you. Every mortgage lender has different overlays when it comes to approving FHA loans.
Qualifying For FHA Loans With Outstanding Collections And Judgments
There are mortgage lenders that will approve mortgage loan borrowers who have open and unpaid collections. Most mortgage lenders will not approve anyone who has an unsatisfied civil judgment. However, there are mortgage lenders who will approve a mortgage loan borrower for FHA loans if the judgment debtor has a payment arrangement with the judgment creditor for at least three months. A payment agreement will be required and copies of cancelled checks will be required as well.
Qualifying For FHA Loans With High Debt To income Ratio
There are many folks who have great credit and have great income but a lot of debts. I have seen mortgage loan borrowers with credit scores of over 800 FICO and long job longevity but could not qualify for a conventional mortgage loan but qualify for FHA loans. Most conventional loans have a debt to income back end ratio requirement of 40%. However, there are a few FHA insured mortgage lenders that will approve debt to income ratios as high as 56.9%. On cases like these, conventional loan borrowers need to turn to FHA loans.
Qualifying For FHA Loans Update
Many changes has happened with FHA Loan Programs from the time this mortgage blog article was written and published. When this mortgage blog article post was published, the maximum FHA Loan Limit was $410,000. Now the FHA Loan Limit has gotten reduced to $271,050 in most areas in the United States except for high cost areas. Many areas in California are deemed high cost areas and the loan limits in most counties in California is $625,500 for FHA Loans. In Chicago and its surrounding suburbs, FHA Loan Limits are at $365,700. Areas of Chicago that have FHA Loan Limits of $365,700 are Cook County, Will County, McHenry County, Lake County, and DuPage County.