Hi all, I'm attempting to get an FHA loan in the near future. I've heard that the FHA is more flexible when it comes to past credit issues. I have been attempting to settle and cleanup my report for several months now, but was curious if anyone else had applied for an FHA loan with past credit issues and succeeded. I was planning on waiting 1 year until all of my credit issues were corrected, (However, just split with hubby and need a new place for myself and my child, buying a house in TX. is cheaper than renting an apartment), now my need has become more pressing. I currently have 1 charge-off(Zero balance scheduled to drop off in 2004), 2 open collection accounts that I am trying to dispute/settle (2002 and 2005), repo - 4 years ago, zero balance and (2) 30 day lates. I currently have no credit cards. I have received multiple offers from Providian, etc. but I and am afraid that if I start applying it will look bad that I have new accounts. (However, it may look worse that I have no credit cards at all right now?) If anyone has any helpful information, please post away. Thanks.
RE: Roni, Mom or anyone with F By the way, does anyone know which credit bureau the FHA pulls? Or do they pull all 3? Thanks.
RE: Roni, Mom or anyone with F Hi Trisha, I know a little about FHA. First and foremost all mortgage programs including FHA require any unpaid collections/chargeoffs to be paid prior to getting your loan. Yes FHA is more flexible than other programs. They basically look at your credit history for the last 24 months , they want to see a good payment history for the last 2 years. When any lender pulls your reports, they pull what is called a merged report, these come from all three agencies. Along with these reports come the infamous scores, they take your middle score and use that to determine your credit worthiness, they toss the high and the low one. I had friends who receently got an FHA loan 3 years after filing for BK, after the BK they kept their credit clean. I am sure others may help you more, I know some posters have gone through FHA and some posters also are in the mortgage profesional.
RE: Roni, Mom or anyone with F Hey Trisha, FHA is more lenient about credit, but guidelines require at least two years of positive credit. Continue to clean up your credit report, and if you think you can afford it, applying for the Providian card may not be such a bad idea. Pay on time and keep your balances reasonable--this will show lenders that you have developed good payment habits. It sounds like you may need to continue to rent for a little while longer. Make sure you keep all of your checks from when you've paid rent--lenders may ask to see 12 months of on-time rent payment. Also, check out programs offered by your State and local government--there may be downpayment and closing cost assistance available for you. See if there are any homebuyer education classes available; in Virginia you can get discounts on your mortgage interest rate for attending these programs and Texas may offer something similar. Best of luck!
RE: Roni, Mom or anyone with F It depends on the lender. FHA is just a type of loan where the government guarantees the loan in the event of default.
RE: Roni, Mom or anyone with F Thanks Carrot for your thoughts. We do have down payment/closing assistance programs in Texas and I have looked into them already. I forgot to mention that I do have a couple of open credit card accounts that are in good standing (paid as agreed, never late), but have not used them in a couple of years so they may be inactive. This may not be helpful to my cause either. You may be correct in that I should rent ahile longer. All of the negative info. on my file is from 96-97. Since then, have been clean. I will keep weighing my options though. Thanks.
Trisha. If all your negatives are from 96-97, you may want to find a good lender, he will pull your reports and let you know how you stand and if you need to wait or not. Atleast you would know what your next step would be, I did this myself and even though it cost me an inquiry it was well worth it to find out. Mom
RE: Roni, Mom or anyone with F I was told that as long as your record is clean for 2 years prior to looking for the loan, you are ok for approval. I am counting on it. roni
RE: Trisha. Mom - Just curious, when you had the lender look at your situation, did they approve you with negative info on your report? If not, did they at least guide you as to what information you would need correct to get approved. Also, did they provide you with your FICO score? If you don't mind answering these questions I would appreciate some insight. Thanks.
RE: Trisha. Yes they gave me my scores, actually I said I wouldn't go through it if they didn't LOL. They told me to pay the collection and get my debts down some and if I did that I would have NO problem getting the mortgage, this was through Freddie Mac though. They sent me a good faith estimate and I talked with somebody about this and they said how they read report that I would get the mortgage as long as I paid collection. So it was well worth it to me to get this info. I of course deciided to wait for mortgage until next year.
