Loan More Flexible for Your Needs
For borrowers with a poor credit history, low credit score, a filed bankruptcy, a past foreclosure, or a combination of all of the aforementioned, take note: all is not hopeless when it comes to qualifying for a home loan. Thanks to the Federal Housing Administration, you may qualify for a special loan that is overseen by them in conjunction with specific lenders. With this type of loan, the FHA provides insurance on the loan, which means that if you should default, the lender (your mortgage company) will not lose out financially – the insurance on the loan that has been provided by the FHA will cover them. However, even though an FHA loan is a possibility, there are still requirements to consider.
First, your existing credit must not have any delinquencies or defaults. Second, it must have been at least two years since a foreclosure, and if you filed bankruptcy, that must be in good standing. Finally, and perhaps most importantly, there’s the credit score: in most cases, a credit score required for fha loan must be in the 500s, but preferably in the 600s. If your credit isn’t quite there, don’t be disheartened: FHA lenders can be flexible, and depending on the circumstances, they will be willing to work with you.