Saturday, May 19, 2012 - Article by: Larry Gray - Mason-Mcduffie Mortgage Corp -
The category is probably not quite what I would prefer but I thought people who question their
credit would look to this category in determining whether there might even be mortgage loans available
to them. The mortgage bank I represent, in their qualifying criteria based on credit scores below
the FHA minimum required by most lenders, does list as low as 500 FICO mid score to 639
fico mid score. However, your individual situation is looked at carefully and the Underwriters apply
points for certain strengths you show. Conversely, you get deductions for other certain negatives
found. We view the credit score about number 5 on the list of important details on borrowers.
However, everything about you as a borrower will be scrutinized more than it would have been
with an automated fannie mae or freddie mac FHA approval. You should not have any late payments
on your credit report in the past 12 months. You need it to be at least two years from a bk discharge
and 3 years from a foreclosure. Short sales wherein there were many multiple missed payments often
get treated "like a foreclosure" and it would be a three year wait also. Otherwise, it is generally a two
year wait with having had late mortgage payments. FHA does allow, in the event of no late mortgage
payments but having had a short sale, for doing a purchase mortgage loan almost immediately
after the short sale. However, you may find there are many banks who require a waiting period
anyway. Usually, when FHA allows for something there will be some lenders willing to lend
based on FHA acceptance.
You do have to put down at least 10% with FICO credit scores below 580, but are eligible for 3.5% down
with 580 or higher. Down payment assistance programs have different minimum credit FICO score
requirements. Owning a home is still a dream of most...to cast aside life with landlords...and enjoy
being able to make your home the special secure place you desire. With rates at record lows
and still a buyer's market in some areas, don't delay seeking your own home if you do not have to!
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