Re: Mortgage Questions :)[ Edited ]
11-29-2012 11:32 AM - edited 11-29-2012 11:34 AM
The lenders have their own overlays for credit requirements. When you are approved for an FHA loan, the FHA criteria is what is minimally acceptable in order for the lender to insure the loan. However, the minimum requirements that the lender has are usually higher for them to actually issue the loan.
For example, WF has the reputation of doing the loan at 580; however, if that is your score you will have to put down substantially more than the typical 3.5% down payment because you represent a much higher risk. BTW, it is very rare for Wells to actually issue those loans as the rest of the criteria is made more restrictive to account for the higher risk with a low score. Those ads are more of a marketing tactic. (
I am new to this board spend a good deal of time on the rebuilding board
but I am getting closer on my scores for a FHA loan, I have a couple questions
1) I have always heard 580 but what score is needed for a FHA loan
2) late pays? my last late was in 2009
3) how much income do I need to finance 35,000? I am doing this on my own without my hubby
I have some time to get things straightned out the house I want won't be out of the summer rental program until the end of 2014 but
I want to know what I am looking at
KWIM, throw it up against the wall and see what sticks type of philosophy).
So, if you get your score up to the 620 or 640 range you are much, much more likely to get the loan with the 3.5% down payment.
As to answering specifically what you need to have, it depends upon your lender. You would have a much better chance of getting the loan with a higher score (more than 640) and steady employment in the past two years in the same industry. Make sure your tax returns are filed ontime as all lenders will require your W-2's, tax returns, paystubs, bank statements and credit report at a minimum. DTI is very important for a mortgage so make sure your cc's are at zero except for one less than 9% of your cr line when you make mortgage application. You can read details in the stickies in this mortgage forum.
You are in the right spot to begin your journey. Good luck!