Credit score needed to buy a house 2016

FHA World - Credit score needed to buy a house 2016

The mortgage industry has changed dramatically in the last few years. In the old days obtaining an FHA loan was easy. Today, most lenders require a minimum credit score of 640 to qualify for a FHA loan.

It is important to understand that just because one lender will not qualify you for an FHA loan, it does not mean that another lender will not approve you.

After the financial crisis of 2008 all the major banks raised their standards for approving an FHA loan. Because the banks make the rules for loans they will approve they may require a minimum credit score of 640 for their loans. These guidelines are the bank's guidelines.

FHA World - Credit score needed to buy a house 2016

Borrowers with a prior bankruptcy, foreclosure, deed-in-lieu, or short sale may be eligible for an FHA insured loan if the bankruptcy, foreclosure, deed-in-lieu, short sale was the result of a documented extenuating circumstance.

Borrowers may also be eligible for an FHA insured loan on a purchase transaction after 12 months from the completion, discharge, trustee's sale if the borrower meets the requirements for extenuating circumstances Economic Event.

FHA World - Credit score needed to buy a house 2016

FHA announced a policy change to address risk and strengthen finances. FHA changed the minimum credit scores for new borrowers:

• New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program
• New borrowers with less than a 580 credit score will be required to put down at least 10%
• FHA allows the seller to pay up to 6% for your closing cost
• FHA minimum credit score is 500

Mortgage World Home Loans is an online mortgage company specializing in FHA loans for first time home buyers. To buy a home with 3.5% down payment and a minimum credit score of 580 using an FHA loan.

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