Is my credit good enough for an FHA loan?

[sungoddess]

Hi - I want to find out what I need to take care of on my credit report in order to qualify for an FHA home loan. I'm wondering if my credit is good enough right now for an FHA loan? Or do I need to take care of my old credit issues. I have several old collection accounts, they total about $4000. My problem is, if I use my money to pay these off, then I won't have enough for the down payment. What do you suggest?

[Mangie]

Hello Sungoddess,

Getting an FHA loan in you situation shouldn't be hard. What you will want to do is have you credit looked at first and make sure there is nothing that will hinder your loan. YFHA can be obtained with a 58 credit score; however, some lenders have their own requirements - they can range between 580 - 640. Fha recently changed the down payment as well, which is at 3.5% percent instead of 3%.

The following is basic FHA requirements:

* 2 Years of steady employment, preferably with same employer.

* Last 2 years Income basically the same or increasing.

* Credit report should have less than two thirty day late payments in the last two years with a minimum credit score of 620 or higher or in some cases no credit score at all.

* Bankruptcy's must be at least two years old, with perfect credit since discharge.

* Foreclosure's must be at least three years old, with perfect credit thereafter.

* Your new mortgage payment should be approximately 30% of your gross (before taxes) income.

Please give us a call to discuss with one of our loan specialists.