Who does FHA use to check credit reports? Let's clear up a few things...(Just to make sure I am correct) 1. They will allow some damaged credit as long as all debts are paid? 2. It is only 3% down? I just am not sure what score they want.
I went to prequalify for a FHA loan and the mortgage guy told me that all outstanding debts (collections and/or charge-offs) must be show $0 balance. They will pull from all 3 CRAs. I don't know what the score should be. Yes, 3% down. The actual amount will depend on how much loan your qualify for. Also your debt to income ratio will play a big part. You must have re-established credit after major credit issues and have been current for at least 1 yr....no lates.
When I received my FHA loan in December, I had a score of 550; however, I had 2 major inaccuracies on my account. I notice the score of other people in my development when I spoke with the people and they were all low 600's. I also had some lates within the last year; however, I was able to explain it (the date I was paid, and date payment was due conflicted on car loan, so I called ford to extend a payment). Yes, 3% down, but do not forget the closing costs. Mike G.
I didn't quite understand the closing costs part. If the seller agrees to pay all closing costs then would I still have to pay a small portion of the closing cost? Also, my back-end percent is high. Do you see a problem with them denying me because of it. It's due to my student loans but they are in forbearance until next year.
They do pull all three CRAs into a consolidated report...Your mortgage lender should be able to tell you EXACTLY what has to be done to get you qualified (mine did) -- and I closed in about 30 days...regarding the 3% downpayment - the way it was explained to me was that it has to come from the buyer. In fact, my lender had to give me a second closing amount, because the first number did not add up to 3%...this is probably the best time to go for a FHA loan because the prime rates are low, and your lender can only charge you a certain percentage over that prime number, good part is that in a month from closing, you can refi down to the lowest amount (latest number I saw was 7%APR) without paying closing costs, doing credit checks, etc. again...hope this helps...
