You may have heard that the FHA is now requiring any borrowers with a credit score below 580 to have a minimum 10 percent down payment. Borrowers with credit scores above 580 can get away with the standard FHA minimum of 3.5 percent.
There has been lots written about this lately but after talking with some trusted lenders, it really is a moot point. Try and find a lender to give any loan to someone with a credit score under 600 and drinks are on me!
While in theory the new requirements are good, banks seem to have imposed scricter rules by not giving loans to those with credit scores under 600. This may sound unfair but if you are in this boat have patience. Credit scores are not hard to repair. Minimize your expenses and make monthly payments. Contact me and I can put you in touch with people who can help you.
You may wonder what good FHA loans are if banks are not giving loans to people with poor credit scores. Well, the fact is FHA loans are available to most of us, even people with impeccable credit.
Why would someone with great credit opt for an FHA loan? Well --the downpayment requirement is still only 3.5 percent! And the interest rates are very comparable to conventional loans. In addition, debt to income ratios are looser with FHA.
I can write a book on this but will save you. If you want more information, contact me today!