Facts about the FHA credit requirements
In the recent year, the FHA authority has undergone a lot of changes to its body. These changes are meant to eliminate unnecessary credit risk and also to assure people of the strong credit premium revenue flow than any other credit administration in the history of mortgage loans. This was of course done in accordance to the rules and regulation stipulated by the government.
One of the many changes made to the FHA loans in El Paso by the administration is the new standards set that a borrower is required to adhere to. These requirements are mostly about the payment of down payments and interest rates. They body mitigated that new borrowers will now be able to acess home loans for as low as 580 FICO score and will be only needed to put down a down payment of less that 12 percent. This has gone around to allow the FHA body to balance its risks as well as continuing to provide their services to the borrowers who have a great credit score.
Individuals who have good performance in their credit history and have a credit score of 580 or near it may find it a challenge to get approved for a loan even if they have reached the credit score needed for this loan. This is because a lot of FHA lenders insist of going for a 620 FICO score so as to qualify an individual for a loan. You should know that just because the credit score stated in the books say a minimum of 580, this do not necessarily mean a bank will grant you the loan. This type of loan program is a voluntary program. The lenders are not needed to participate in it and the Federal Housing Administration cannot enforce any of the banks to lower their FICO credit requirements.
If your FICO score is less than 620, the first thing you do is to call for the FHA assistance at their call center. Then from there, ask the FHA loan program representative to refer you to an FHA- approved councilor. This councilor will help you raise your credit score and also make yourself a better credit risk in the eyes of the lender. You may have to pay a few dollars but the session is worth it. You will walk away with a FHA loan in your hands or at least with enough knowledge on how to get a good credit score.
This councilor will suggest the right measure to take towards becoming a home owner. It is very important to know that it will take some time to raise your credit worthiness so be patient and follow the advice of the housing advisor.