FHA allows buyers with credit scores below 700 to purchase homes. In the current mortgage credit crunch, FHA may be the best bet for first-time home buyers. First-time home buyers are defined as anyone who has not owned a personal residence in the last three years.
Another factor making FHA a viable choice in mortgage loans is that FHA has temporarily raised its loan limits. (FHA Raises Loan Limits).
IndyMac, one of the home lending giants for non-perfect credit borrowers, has gone out of the mortgage lending business, limiting mortgage borrowers’ options.
Your credit score is more important than ever when applying for a mortgage loan. Lenders look at your credit score as an indicator of your creditworthiness. Based on your credit score, lenders determine the risk of you becoming a foreclosure statistic.
Your credit score is based on your history in repaying your bills in a consistent and timely manner. Your income level, age, martial status, etc. do not influence how your score is determined. The only factor is your repayment history.
Prime borrowers have credit scores of 700 or higher and normally will have no trouble securing a mortgage loan. Sub-Prime borrowers are those that have scores below 660.
FHA’s goal is to help Americans achieve homeownership. They are not in the business of making risky loans but will not deny a loan strictly because the borrower does not have A-1 credit.
Never assume you cannot qualify for a mortgage loan. There are still many loan programs available but, in terms of interest rates, most come with a price tag. FHA loan interest rates are some of the lowest a borrower can obtain.
If you are considering purchasing a home in Anchorage, FHA may be your best bet. However, to really know what your purchasing power is and which loan program is best for you, contact a good mortgage broker.
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July 15, 2008 at 7:42 pm
FHA Best Bet · Real-Estate.ExplainedOnline.Net
[…] Original post by Top Preconstruction Market […]
July 18, 2008 at 2:45 pm
Brad Clemons
Great posting about FHA loans. One of the key options of an FHA mortagage that most people have forgotten is that the loan is assumable. In the current environment if someone needs to sell their home but has little or no equity this a a great option for both buyer and seller. In many cases the buyer would not need a down payment and would just have to credit qualify with the current lender. Both parties could save thousands of dollars.
The seller then would be released of liability for the loan and could use their real estate agent to find another property.