In addition to your ability to pay (as indicated by your debts and income), FHA will look
at your willingness to pay. Your willingness will be judged by your credit record -- that
is, how well you've paid your loans and other debts in the past.
Good credit is very important in qualifying for a loan, although FHA will
allow for minor past credit issues. They will look specifically at the last two years of
your credit history. If there are some credit issues, we may be able to overcome them with
sufficient explanations and supporting documents of why the issues occurred. Never rule
yourself out of qualifying for FHA loan because of credit, apply
and allow a mortgage professional review your credit.
There are some credit issues that we must allow for a certain time
to past before you can qualify for a FHA loan. They are follows:
- Two years from the date of discharge for a Bankruptcy
- Three years from the date of Foreclosure
Also FHA would require that any outstanding collection accounts,
judgements, charge off's be paid off in full before closing.
Another advantage of FHA loans is that FHA does not require a credit
scoring item call a FICO (Fair Issac Company) score. This allows more home buyers to
qualify to purchase or refinance a home.
When you apply for a loan, the we
will order a credit report for you. The credit report will show your record of payments on
loans, charge cards and other similar debts. If you have never had a loan or a charge
card, you can show that you have a good record of payment on your utility bills and rent.
We will review your credit report with you. Should you have some credit issues that
prohibit you from qualifying for a FHA loan now, we will show you how to correct the
issues so that you we can help you qualify in the future.