Did You Know?

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.

Get an FHA Refinance Loan
Get an FHA Purchase Loan
FHALoan.com
Get an FHA Refinance Loan
Get an FHA Purchase Loan
Click to Start Your Refinance or Purchase Loan

FHA Loans, New Borrowers, And Credit


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 below.

FHA Loans And Credit Scores

What follows is not financial advice. Always consult a finance or tax professional for the most current information.

While FHA loans offer more lenient credit score requirements, establishing a positive credit history is still vital in loan approval. You’ll need to know what your lender will see in your credit report long before you submit that information to them. How many credit mistakes are too many for your lender? 

There is no set metric, but to understand how the lender thinks, remember that they have to justify approving your loan based on the information in your reports. Does the data in them make it easier or harder for the lender to say yes?

Lenders use credit reports to assess borrowers' creditworthiness and history of managing debt. Managing your financial obligations is a big part of loan approval. If you need to work on your credit, there are several ways to do so before a home loan application. Start working on these issues a year in advance at a minimum.

Building Credit

Several strategies exist for building credit. Secured credit cards, which require a security deposit, can help, but you will need time to build up your credit patterns with the new card.

Responsible use of a secured card can help build credit over time, as can credit-builder loans, which involve borrowing a small amount of money held in a savings account until the loan is repaid. 

The activity on these loans is typically reported to credit bureaus, helping establish a credit history. 
Consider becoming an authorized user on a responsible family member or friend's credit card. This, too, can help build credit since the account's payment history may be reported to credit bureaus. 

Making consistent and on-time student loan payments demonstrates responsible debt management and contributes to a positive credit history. Some services allow renters to report their rent payments to credit bureaus, which can help establish a credit history.

Read Your Credit Reports

Request a free credit report from Equifax, Experian, and TransUnion. You are entitled to a free report annually to review for accuracy and identify problems. 

Did you find errors or inaccuracies on your credit report? Dispute them immediately and set up credit monitoring services to track your credit score and stay informed of any changes.
See Your Credit Scores From All 3 Bureaus
See Your Credit Scores From All 3 Bureaus

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.

SecureRights Advertiser Contact Information