What are the chances we would qualify for a FHA Loan?
My husband and I are trying to clean up our credit as it is not very good. I have been browsing houses online and found one that I have absolutely fell in love with from what I have seen. It is listed for 69,000 we do not have good credit, when I pulled a credit report on us I got a score of like 592 for each of us. When I spoke with a Mortgage company he told me we did not have credit, after he pulled a credit report on us. We do not have any credit cards, just a dept. of ed loan from my husband back in 1998 and then some med bills and a few other things. No car payments as we own our car. We have less than a combined total of 5000 in debt.We are meeting with a real estate agent Weds night who said he may be able to help us find programs either for our debt or to help us get a house, I do not remember which he said. I have read a little bit about the FHA Loans and am not sure about them. My husband does not make much money he makes 400 a week before taxes.So approx 19,200 a year I know it's not much. I do not work as we have 2 children ages 2 and 5 months. I have been trying to sell avon but it isn't working so far. Can anyone give me any info on the FHA loan or what the chances of us getting one are? I have applied for a secured credit card through our bank and we were both denied.
- loanmasteroneLv 71 decade agoFavorite Answer
In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.
Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.
He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.
The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.
When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.
#1 One month of pay stubs for each person that will be on the mortgage.
#2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.
#3 Two years of federal income tax along with the W-2 that match.
Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.
Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.
Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.
If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.
You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.
Make sure your mortgage broker explain all your options so you may make an intelligent decision.
What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.
So select the best option for you and your financial situation.
You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.
Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.
Your mortgage broker will now order an appraisal to show proof of the property value.
The mortgage broker might ask for additional information or documentation, don't get all up tight this is normal, just supply the information or find the documents needed.
After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.
Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.
I hope this has been of some benefit to you, good luck
- ?Lv 51 decade ago
FHA does not have minimum credit score requirements. But most lenders don't do loans below 620.
FHA insures mortgages made by approved lenders to individuals and non-profit and government agencies that are approved to participate in HUD's programs; HUD does not loan money to homebuyers.
Generally, to be eligible for an FHA loan, you must have a valid social security number and have lawful residency in the United States and be of a legal age to sign on a mortgage in your state.
Lenders will verify income, assets, liabilities, and credit history for all parties on the loan. With an FHA loan, you cannot take an ownership interest in a property without qualifying for the loan.
FHA's mortgage programs do not typically have maximum income limits for qualifying, although you must have sufficient income to qualify for the mortgage payment and other debts.
Income limits may be present when qualifying for down payment assistance or other secondary financing programs (including those funded by HUD) that may be used in conjunction with an FHA loan. FHA does not have minimum credit score requirements, although past credit performance serves as the most useful guide in determining a borrower's attitude toward credit obligations and predicting a borrower's future actions.
Using FHA's guidelines, lenders will make a credit determination based on the merits of each case. To find out if you qualify, and how much you can borrow based on your income and debts, you should contact a HUD-approved lender.
HUD's internet site can provide additional information on FHA mortgages by going to: http://www.hud.gov/buying/index.cfm
You can also find an FHA approved lender in your area by going to: http://www.hud.gov/ll/code/llplcrit.html You may also wish to contact a HUD approved housing counseling agency in your area for unbiased and free counseling on your particular situation.
You can find a list of these agencies at http://www.hud.gov/offices/hsg/sfh/hcc/hccprof14.c... There are also many local and State government programs available that use HUD and/or non-HUD funds to provide grants for the downpayment or to help pay closing costs. To find out what programs are available in your area visit http://www.hud.gov/buying/localbuying.cfm
Mortgagee Letter 05-27
- Anonymous1 decade ago
no i dont think you will be able too..... if your credit score is low, you have to have good income, open lines of credit that are current, and, for your score, 5% down.
btw, you can get an FHA loan with a score lower than 620. my husband got one with a score of 594. but he makes about 50,000 a year, has 4 open lines of credit that are current, and all his collections are old/medical. but because of his score, we needed 5% down instead of the typical 3.5%
- spalmerLv 71 decade ago
Here's the FHA loan site - requirements: http://www.fha-home-loans.com/loan_qualifying_fha_...
Credit score needs to be 620; two years of steady income with the same or increasing pay; mortgage payment should be no more than 30% of gross monthly income, etc.
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- 1 decade ago
You have to have at least a 620 for an FHA loan. At least that's what my lender told us when we applied.
- David ZLv 71 decade ago
new fha guidelines require FICO to be 640.