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FHA loans are one of the best options for young, first-time home buyers who have not had as much time to save for a large down payment or establish a high credit score.

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What You Need To Know About FHA Loans And Preapproval


What You Need To Know About FHA Loans And Preapproval
Thinking about buying a home? One of the first things you'll want to consider doing is filling out forms to be pre-approved for your FHA mortgage. This means a lender looks at your finances to determine how much they will loan you and how much interest to charge.

Preapproval for a home loan means a credit check, so be prepared to fill out basic credit information as part of the process.

Some at this stage might wonder: "Will applying for pre-approval hurt my credit score?"

What's a FICO Score and Why Should I Care?

Your FICO score is a three-digit number that sums up your risk as a borrower. It's based on your credit history, and FHA lenders use this score to decide if they want to give you a loan and what interest rate they'll charge. The higher your score (the best is 850), the better your chances of getting a good deal.

Good News About Pre-Approval

Applying for pre-approval typically results in a temporary change to your FICO score. Why? Because lenders perform a "soft inquiry" on your credit. It's like a quick background check, not a full-blown credit application. They can look at your credit history, but it doesn't affect your score.

Shop Around For An FHA Lender Without Worry

You know how you compare prices before you buy something big? Well, FICO knows you do that with mortgages, too. They have a "rate shopping window," usually 45 days long, and during this time, you can apply with multiple FHA lenders, which only counts as one inquiry on your credit report.

Things That Can Affect Your Score

If you apply with FHA lenders over a long period (past the 45-day window), it can look like you're desperate for credit.

Also, make sure your credit report is accurate. Credit report mistakes are more common than you might think. They can lower your score, so check your credit before you apply and fix any errors.

Keep Your FICO Scores Safe

Want to minimize any impact on your credit score? Here's one plan to consider:
  • Apply within the 45-day window: Get those pre-approvals done quickly to take advantage of the rate shopping feature.
  • Don't go overboard: It's good to compare offers, but don't apply with every lender under the sun. Pick a few that seem like a good fit.
  • Check your credit report: Before applying, get a copy of your credit report and make sure everything is correct.
Pre-Approval is Just the Beginning

Keep in mind that pre-approval doesn't guarantee you'll get the loan. It's a good estimate, but the lender will examine your finances more thoroughly before they give you final approval.

Getting pre-approved is a smart step when you're buying a home. Be smart about how you apply, and keep your credit report clean.

 
See Your Credit Scores From All 3 Bureaus
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FHA Loan Articles

FHA Loans, New Borrowers, And Credit

If you are new to the home loan process, you may wonder how your loan officer will interpret your application data. How lenient is the lender with issues related to debt, credit utilization, and related factors? We examine some key points, but remember that what follows is not financial advice. Always consult a finance or tax professional for the most current information.
 

What You Need To Know About FHA Loans And Preapproval


Thinking about buying a home? One of the first things you'll want to consider doing is filling out forms to be pre-approved for your FHA mortgage. This means a lender takes a look at your finances to figure out how much they're willing to loan you. It's a smart move, but you might be wondering: "Will applying for pre-approval hurt my credit score?"
 

Take Equity Out Of Your Home In Cash With An FHA Refi Loan

FHA mortgages include a refinance option that allows you to pull equity from your home in cash. The FHA cash-out refinance loan allows the borrower to take the difference between what remains to be paid on the home and the amount of equity built up. 

The FHA loan program has some competition in this area, but how do your other government-backed refinance loan options measure up?

When Deciding To Rent Or Own Your Own Home

The dream of homeownership is with some from a young age. But in an uncertain housing market, some grapple with the question: Is buying a home the right move for me?

While renting offers relocation flexibility and lower upfront costs, homeownership provides a wealth of financial and personal benefits.

FHA Refinance Versus Conventional Loan Refinance

Refinancing your mortgage offers a way to cash in on your home equity, potentially reduce your interest rate, or modify your loan term. Borrowers ready to consider have options including FHA loans and conventional loans. 

While both provide avenues for refinancing, each loan type may be best for specific needs and financial circumstances. What are the differences between FHA and conventional refinance options?

FHALoan.com is not a government agency. We do not offer or have any affiliation with loan modification, foreclosure prevention, payday loan, or short term loan services. Neither FHALoan.com nor its advertisers charge a fee or require anything other than a submission of qualifying information for comparison shopping ads. We do not ask users to surrender or transfer title. We do not ask users to bypass their lender. We encourage users to contact their lawyers, credit counselors, lenders, and housing counselors.

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