Announced in January, all three amigos of requirement changes for FHA loans should actually be in effect soon:
New FHA borrowers must have a minimum credit score of 580 to qualify for the FHA’s most favorable down payment plan, currently at 3.5%. Borrowers with credit scores of less than a 580 FICO score will be required to put at least 10% down.
Up Front Mortgage Insurance premiums have increased to 2.25% for all FHA case numbers assigned after April 5th, 2010 for purchase money mortgages, plus the FHA’s Streamline Refinance program and full-credit qualifying refinances.
Seller concessions have also changed. The FHA has lowered seller concessions from 6% to 3% in a move FHA officials say is designed to eliminate the temptation to inflate the appraised value of a home for sale.
For individuals with poor credit ratings, or a credit rating less than 580, learning how to remove derogatory accounts from a credit report can only improve their scores and make it easier to qualify. If someone was to have a score of 550, being able to remove some of the negatives markings could push their score up to 590 and then they wouldn’t have to put down a minimum of 10%.
On top of this, some people don’t even have any credit due to the fact they haven’t taken out a credit card. They will struggle to get any loans or a mortgage without proof that they are reliable with their money. If you want a credit score that could benefit your financial situation then check out this article on Credit Cards for No Credit. It may help you later in life when you want to make a big purchase that requires external assistance. However, even with a bad credit score, there are still ways to get a good deal on your mortgage. By looking at these bad credit mortgage options, there should be a way for everyone to purchase a home. A good credit score will definitely help, but don’t worry if yours isn’t perfect!
Credit cards, phone bills, and car payments are just a few payments that could affect a credit score. Paying them on time and efficiently will help create a better credit rating, which in turn leads to better interest rates and more financial benefits.
And once again, the reason why.
? FHA Policy Changes You Should Know About [fha.com]
? FHA To Tighten Its Belt, But With Its Fly Wide Open? [SocketSite]
? OMG For The FHA [SocketSite]