I see people talking about FHA mortgages and assume they require excellent credit history. I have on CC charge-off that I am currently negotiating with the CC company. I have a GMAC charge-off that is not mine and I have been fighting for two years. I just sent them an "intent to sue letter" and I have 5 30-day lates in the last two years. So...is this something I could possibly work out with an FHA loan? I need a low down payment. I have excellent rental history for 7 years now. I pay a large rent amount also. Will they work with me if I am trying to get these negatives handled? Oh, yeah, I have one medical charge-off for $90 - which I will pay if I have to. I have written that collection company a validation letter. Any advice on where to see if an FHA is applicable for me?
My husband and I have an FHA morgage and when we 1st got it they made us pay everything still owed on our report. I don't think they really care too much what is reported as long as it shows PAID. Not an expert though, just my experience.
You mean as far as collections? We have a car loan with a 14K balance and a couple of small balance, current credit cards. Did they make you pay off everything or just charge-off and collections?
FHA mortgages are not score based. You must have 12 mths of good history on 4 tradelines (can be CC's, rent, utilities, car insurance, even gym memberships). You have to provide payment histories. You must also satisfy outstanding debt that is not being reported in good standing. It does not matter if it is not removed from your credit reports, as long as it is older than 24 months. That is what I have experienced in Florida. Contact a mortgage broker that deals with many lenders, and most will be able to find a reasonable loan for you.
I got an FHA mortgage (for my first house) in May of 2000. My credit report looked very bad, but I had no real "debt". My mortgage banker told me I had to pay off all outstanding bills and provide proof. Luckily, I had letters from all creditors that I had paid off and the mortgage banker helped me get in touch with the others and make suitable arrangements to 1)pay and 2)get the documentation quickly. Needless to say, my initial rate was high (9.5% at the time), but the beauty of an FHA mortgage is a program called a streamline refinance. You can basically refi your FHA loan anytime the rates go down. The good part is that it doesn't cost you anything out of your pocket (no closing, points, etc). I did a refi in Jan 2001 down to 7.5% -- if I had waited a couple of more weeks, could have got it to 7%. I'm planning on selling my house in about 7 years, so my main motive is to get my payments as low as possible. I'll probably do another refi if the rates go down to 6.5%... BTW, my FICO score is terrible (mid 500s) again no debt, but a lot of inaccuracies on my report -- Junum should be fixing that for me though! Hope this helps.
Thanks Hurrican for the above post. It definately placed some HOPE into my heart. One more question though, how much house (max loan amount) will FHA give you? Is it based on your income?
Here's a link I think it has the max amounts per state, if not it does have some useful info. http://www.fhalibrary.com/
Re: state limits here is a great site that has all sorts of calculators for figuring out loan amounts and what you might qualify for. For FHA change the end/back ratio to 42%. http://nt.mortgage101.com/partner-scripts/calculators.asp?p=forsalebyowner Sorry I don't know how to make it link here. Just copy and paste. judy
Re: state limits http://nt.mortgage101.com/partner-scripts/calculators.asp?p=forsalebyowner Judy just put < before and > after the link
Re: state limits How much does bad credit effect your interest rate with a FHA Mortgage....the same as conventional?
Re: state limits ss2744...what they really look for is that you have no outstanding debt...you WILL get charged a higher rate initially, because what you have to remember is that FHA is just guaranteeing the loan, the broker still has to place the loan somewhere. The good news is that once you get the loan, you can refi as often as you want with no out of pocket expenses, no credit checks, etc. I was actually scared to do it the first time, because I thought that there was a catch to it, but it was very straightforward and easy...fill out an app and in about 3 weeks, you close on your new mortgage (with a new lender of course). Bad news is that you will constantly get deluged with offers to refi -- but small price to pay for me (rate dropped from 9.5% to 7.5% and I save about $250 a month...
