FHA loan

Scores really don't factor much in an FHA loan. When we applied they said that our house payment including interest, taxes and insurance + our other debt monthky payments couldn't be more than 37% of our income but I have heard that some lenders go up to 42%. Good luck. A lender will tell you your best course of action so start looking for a good one.

Kim

 

I've purchased 2 homes fha and refinanced about 4 different times. From what I've seen they have guidelines, its just a matter of who you can get to step far enough past the guidelines to get you financed. Also my scores didn't play that big of a difference with fha either. One thing I do know is that you have to be 2 years post bk and I think they stick to that one quite stringently. Otherwise than that you will have to shop around for someone who can help in your particular situation. Remember, what one person can't do another can. I never took no for an answer. If someone told me that they couldn't do it I just found someone who could. Trust me, with my credit if I found someone to finance me surely you will too. Good LucK!!

 

Thanks for the great info guys. Did you go with a broker or how did you find your lender eventually? You don't let them all pull credit do you?

Newstdt

 

My wife and I just bought a house via FHA in May of this year. We only used my credit, and my median score was around 590. I had quite a few unpaid collections, but was told the loan would not be a problem as long as I paid them off. I believe the important factors with FHA are:

1) Time on the job (at least 1 year)
2) No unpaid collections
3) Good credit history for the past 12 months ( no recent late pays or collections)
4) Debt to Income Ratio (should be under 35% ideally)

There is a loan cap of around $145K, depending on where you live in the country, but as long as you don't need more, FHA is a great way to go.

We actually applied with a broker, who originally offered 7.5%, then applied again with a local bank. I kept playing them off of each other until I got the rate as low as anyone was willing to go: 7.0%. Not the best rate since prime is around 6% but far better than I could have done with any conventional loan.

I would suggest talking to at least 2 or 3 different lenders and get them to write an offer so you can use it as leverage to negotiate the best rate. Try to get as close to 6% as possible; I've read several stories of people getting that low through FHA and I feel I may have given in a little early.

Good luck and don't look back. Buying a house is one of the best things you can do financially and it feels great!

 

DownNout

FHA does not take scores into account. The only thing they look at is debt ratio with front end being 28% (house payment) and backend being 38% (total monthly debt). You can not have any unpaid collections or chargeoffs and must be current on rent/mortgage for last 12 months. Any recent late pays must have an acceptable explaination as to why. There are programs for downpayment assistance for the 3% down for FHA. Also the seller is allowed to pay up to about 5% (if memory serves me) of the closing costs. Most any major lender or broker can assist you.

Caution though, ask questions and expect a good broker to ask you alot of questions as well. There are many good programs out there and you don't want to get pushed into a program just because that is what the lender or broker knows.

If you wish, I can go into further details as to what type of questions to ask and what a good broker should ask as well.


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