The fact that the housing bubble has long since collapsed is no secret to anyone. Very many homeowners have faced the foreclosure nightmare, and many more are thinking about evaluating their refinancing options. The situation has also created a renewed interest in the FHA loans. Here are a few things you need to know about the FHA Home Loan.
What is the FHA loan?
This loan is issued by the federal housing association. FHA is an agency of the country’s government under the housing and urban planning department. The great thing about these mortgages is that they offer better interest rates and do not have the stringent measures that need to be met for one to qualify for other mortgages. However, it is important to note that to get an FHA loan, the borrower must be willing to pay a mortgage insurance to compensate the lender, in case they default on the payments.
Eligibility for the loan
As of September 2010, the eligibility criteria for the FHA loans were adjusted as follows:
1. To get a full mortgage, one must have a credit score of more than 580.
2. In case one has a credit score of 500-579, they will only qualify for 90 percent mortgage.
3. If you have a credit score of less than 500, you are not eligible to apply for a loan.
There are certain circumstances under which the FHA can make an exception for you if you have an unusual credit score. However, you will have to consult your mortgage lender about this.
Improving your credit score
If you really need an FHA mortgage but aren’t eligible, you can start rebuilding your credit score. This can be achieved through:
1. Paying off any car loans and other consumer debt that you owe.
2. Repaying all active bank loans.
3. Paying credit card debts and canceling unused credit cards.
4. Creating a culture of saving money.
All these are measures that can be taken to get the FHA Home Loan. To learn more about these loans, you should contact Village Mortgage through their website. They will give you information and guidance on how to sign up for FHA mortgage and other products.
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Village Mortgage Company, NMLS #6331 CT #6331, RI #6331, ME #6331, Licensed Mortgage Lender NH #6331, Mortgage licensed lender in MA ML6331.
