Friday, March 23, 2012
Bad Credit Score Mortgage - No Problem With FHA
If your FICO credit score has tanked due to temporary cash flow issues in the past, the good news is you may still be able to qualify for a mortgage - and at a decent interest rate.
FHA has been making it affordable for millions of "less than perfect credit" borrowers qualify for a bad credit score mortgage since 1934.
The reason you'll get a mortgage loan is FHA doesn't require a strict FICO score to qualify for the program. There are guidelines however, but the whole process is a bit more subjective than qualifying for a conventional loan, taking into account any offsetting factors that tend equalize bad credit.
For example, say your income has gone up and your ability to pay monthly obligations has improved. FHA likes that. You can't erase bad credit, but you can present yourself as less of a risk to the lender.
An FHA lender will look at your increased income as an offsetting factor that decreases your risk as a borrower. This is a good thing for you.
Also, these loans are insured by the Federal Government, so once you are approved, the lender is covered in case you default on the loan.
The Federal Housing Administration also requires you only put 3% down payment toward the loan. This holds true for a purchase or if you are refinancing your home. You can even get the cash from a relative or in the case of a refinance, use the equity built up in your home as the down payment.
So, If you're looking for a bad credit score mortgage or refinance, strongly consider an FHA loan, you'll benefit by being able to afford a home that you otherwise could not afford.
Hard working families that may have damaged credit and very little down payment can still experience the joy of home ownership with an FHA loan. Qualifying is much easier than you may think - visit: FHA qualifications
Article Source: http://EzineArticles.com/1163158
Posted by 203konline