By Stacy Williams
Tips to understanding credit score qualification for an FHA home mortgage loan .
FHA home mortgage loans are government backed loans created to help first time home buyers and home buyers looking to purchase a home with little to no money down. FHA qualification guidelines are less stringent that those required with conventional mortgage loans. This makes it easier and more affordable for you to own a home.
Credit score requirements for a FHA Home Mortgage Loan
Typically, your credit report should show less than two 30 day late payments in the last two years. Your credit score should be no less than 620 in some cases. However, FHA offers many programs for borrowers with less than a 620 credit score. If you have a low credit score, or no credit history. your lender can find a program for you.
FHA is most concerned with the last two years of your credit history. Job loss, serious injury, illness, or a job transfer may affect your
credit. If you suffered credit issues, you can overcome these obstacles with sufficient explanations and documents supporting your plea when applying for your FHA home mortgage loan.
Bankruptcy and foreclosures
A bankruptcy must be at least two years discharged, and your credit history must prove that you are creditworthy since your claim.
A foreclosure must be at least three years discharged, and your credit history should be flawless since.
Collections and charge offs
FHA will require you to pay all collections, judgments, and charge offs before closing your loan. FHA home mortgage loan approval is possible, and you may even be able to pay off your bad debts at the closing table.
FHA guidelines require that you prove a two-year work history. If you have gaps in employment, you must state why they occurred. Your previous two years of income should show that your pay is stable, or increasing. If you work on a commissioned based salary, you have to prove that your bonus are consistent.