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Mortgage Financing made to look easy - FHA loans Have NO Min Credit Score for Florida Homebuyers - Really???

This makes FHA loans sound to EASY. This is extremely misleading...

losing my mind

I must digress... this post was just sent to me. FHA loans have no minimum credit score for Florida Homeowners -

From reading this post, the author makes it sound very easy to obtain FHA loans with less than perfect credit. The author states this - "At the same time FHA loans to (do) not penalize Florida buyers with a higher interest rate because of having less then perfect credit."

Much of the information above and in the post is extremely misleading. I would consider this as a FHA mortgage myth per se. Let me break it down for you.

Fha loans - FHA home loans - FHA mortgages

Misleading info about FHA Loans :

FHA mortgages don't have minimum credit score requirements. Okay, this is actually true, there is no minimum credit score from FHA. But many lenders have minimum credit scores. Here are some changes that FHA is trying to implement before the end of this year. I wrote about it here. FHA mortgage changes with down payment and credit scores. .

Let me take this one step further. Many lenders won't go below a credit score of 620. Yes, there are a few lenders that will do credit scores from 580 to 619, but you need to be very very careful when promised this kind of loan. First off, they are much more difficult, that the guidelines are much tougher. Secondly, the interest rates and fees are usually much higher, sometimes up to 1 percent more in interest rate with points. And I have come across many borrowers in the last 6 months that were promised a FHA loan with less than a 620 score and many of them never closed. Again, not saying that it can't be done, but it's not easy.

Summary : Overall, this kind of post with the information is very misleading. Here is another statement from that article.

Easier to qualify: Because FHA insures private Florida mortgage lenders, FHA lenders are more willing to give you loan terms that make it easier for you to qualify.

More willing? Okay, getting an FHA loan can be easier sometimes than getting a conventional loan. But this statement makes it seem like it's easy. Each borrower is different, not one borrower being the same. You need to work with a very good professional loan officer. I currently have a borrower with a 637 credit score who was first pre-approved in the first week of May 2010. She just received this from the lender.

"I'm sorry I was out of my office all day today. The reason a commitment hasn't been given is because your credit score does not meet the required score needed to get the loan"

Wow.. rut row... this lender knew about this same credit score back in May, and now she is just saying this? I told the client that I can help. It's not an easy deal, but I have been helping her get all her ducks in a row in the last 10 days. We are ready to proceed.

My point? Just because someone promises you a loan, gives you a pre-approval letter, or even a commitment letter, it does not guarantee you a FHA loan. Yes, FHA loans with less than perfect credit and lower scores (620 or higher) can happen, but not everyone can handle these types of loans. Mortgage Myths or misleading mortgage information is out there, just be careful. Do your research carefully.

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For more information on FHA loans, please go to this link. The FHA Expert

For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags!

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For information about FHA myths & FHA rumors, please read : FHA Myths & Rumors

Posted by Jeff Belonger-The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans on 07/13/2010 11:47 PM

Comments (34)

Fha Loans With Low Credit Scores in the Mortgage / Finance Channel

fha loans, fha home loans, fha mortgages, fha loans florida, fha loans new jersey, fha credit scores, less than perfect credit, mortgage myths

Originally posted at: FHA Mortgage Expert - Tri-State Area - New Jersey/PA/Delaware: Mortgage Financing made to look easy - FHA loans Have NO Min Credit Score for Florida Homebuyers - Really???

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34 Comments on Mortgage Financing made to look easy - FHA loans Have NO Min Credit Score for Florida Homebuyers - Really???

JUL

2010

I hate garbage like this. Let's call it like it is. Even if FHA didn't care about FICO scores....investors and banks won't buy loans below 620 credit scores. The people who perpetrate this dis information need to be shot. You need to call these shoddy people so that we get them out of the industry, or at least exposed for what they are.

JUL

2010

Hi Jeff good to see you here in the Rain, its been a while (for me anyway)

Glad to see great content posts, like this one.

Katrina Madewell, Tampa FL

LARRY.... . yes, we need to call these kinds of posts and people out, without slamming them. But just showing this as a real live example of what is out there on the internet. thanks for your support.

KATRINA... . hey stranger, it has been a while. What, 1 1/2 years?... thanks for the kind words and for the polite compliment.

"Just because someone promises you a loan, gives you a pre-approval letter, or even a commitment letter, it does not guarantee you a FHA loan. Yes, FHA loans with less than perfect credit and lower scores (620 or higher) can happen, but not everyone can handle these types of loans. Mortgage Myths or misleading mortgage information is out there, just be careful. Do your research carefully."

Jeff,

This could be said about any type of loan! It's true of all!

Bill

Consumers believe that mortgage loans are easy because there is no much misleading advertising by loan officers about how how THEY can finance "bad credit" folks.

Jeff - thanks for this post and I'm glad you here to keep it real and get the word truth out.

Jeff...

Are there any easy loans these days? Thanks for setting the record straight!

i'm here, in florida that is. let me point out that some lenders actually have a 640 minimum.

i'm looking for someone to come up with some numbers that show how many loans below 620 close. is it 1 out of 10? 1 out of 20? 1 out of 100? also how long do they take; 60 days? 90 days? whatever?

i'm in southwest florida; easy loans don't exist.

Great post so I reblogged it. Just don't steal too many Michigan deals:)

That article is a "made for adsense" article. Did you notice all of the Google ads and all of the key words being used? Did you see any link to any lender site other than the Google ads? It's just boiler plate stuff that they scraped together from other sites, probably most of it from the FHA site itself and they just want to make money off of people clicking on those ads.

Geat post jeff. Thanks for setting the record straight on this one. Worth re-blogging.

I'm not sure since they keep changing the laws...the criteria but we have a mortgage company in our office and I'm going to ask the head person if its true or not.

WILLIAM... . yes, I know that any kind of loan can be tough at times. But I just wanted to make a point on how this person went on to make it look like FHA loans are soooo much easier... ;o) Thanks

LENN... . exactly, hence why I wanted to get this message out there... I am starting to see more posts like this or advertisements and it's scaring me. .. besides ticking me off.

PETRA.... . my pleasure... I just like getting correct info out there,... thanks for the compliment.

RICHARD.... . all over the place, right? lol No, many are difficult, even the ones that seem easy at times. thanks

JAY... . yea, there are some lenders that don't want to go below 640 either. I could have mentioned a few other things in this post, but I wanted to keep it short and to the point. And I am with you, I would love to find out what loans close that have scores under 620. But I am sure we will never find that kind of info out. Do you think a lender or loan officer that has the program for credit scores of 580-619 would want to advertise that? Because I know the ratio or percentage can't be that high. thanks

DREW.... . nah, I won't steal any Michigan deals... especially with the new licensing laws.. and thanks for reblogging this.

TIM..... . I will call you Mr. Detective. ;o) Seriously, I had realized about the Google Ads all over. And if you can see how this person flooded the post with a few key words, making the post jump around and not sound smooth. It read like an ad. If you take it a step further, you can contact this person. He leaves his name below and a web site. Florida loans by Thomas Martin - Here is that web site, which is still loaded with key words. And it's oput dated, because it says that you can get FHA financing to 97%. This was changed January 1, 2010 and went to 96.5%. And look at the company that did this web site... SEO King... lol And they have 100% financing, which would only be USDA loans, but they use the key term 100%. In any case, thanks for pointing that out.

GABE.... . my pleasure and thanks for reblogging this and for your support.

NEAL... . please so this to your mortgage person. Would love to get their take on this. But one thing for certain, most lenders won't go below 620 and if they can, it's much harder than what many lead on to believe. I get those calls all the time. thanks and please let me know.

It seems that in times of misery there are people always looking to take advantage of them. I talked to a potential client yesterday who was 5 months behind on an FHA loan, the credit score had dropped to 500, and they had a "loan Officer" tell them they could refinance them. The public is desparate to believe sometimes, and it I take no pleasure in delivering bad news, but we have to do it and keep the intgrity of the business on a higher standard.

Jeff - I reblogged this one! It is great information! Too many misleading articles are circulating again!

Good information here. I can't believe lenders/brokers would be misleading anyone..still. I am going to link back here on my outside blog. Good info! Thanks

Two deals went south this past month because two loan officers from the same company gave pre-approval letters to buyers who couldn't get a mortgage. I'll wager they were told that getting a loan was easy, too. Thanks for bringing this up.

I couldn't agree more with your response. It is completely irresponsible for the author of the other post to make those claims. It continues to put our profession in a bad light when he won't be able to deliver on what he wrote.

I agree that the title of the post can be very misleading. It gives borrowers with less than perfect credit a hope that even with not so great credit they can buy a home. As I have mentioned on another post, and I would love your comment on:

Why should we be segregated into "molds" of perfect and less than perfect credit?

Jeff: As a loan officer with one of the larger mortgage banks in the nation, what they are saying is for the most part untrue. In fact, none of our investors will buy a loan with less than a 620 credit score. US Bank may go to 600 although I hardly ever use them. And we work with all the big ones. Once again, advertising has told an untruth. This lender is lucky they don't do business in Washington State. There was a lender up here who used to advertise low rates, etc. The attorney general went after them, fined them $500,000 for deceptive advertising and the advertiser subsequently left the state. The good news is mortgage volume is down. What that means is advertisers don't spend as much trying to jilt the public. They can't afford it! Thanks for the post!

Misinformation is rampart these days with the internet and the media in general. You really have to be aware of the facts. Thanks for posting the info.

Solid post Jeff. That article is so misleading. anyone that comes across it will feel they can get a loan as long as they have a down payment. FICO is a huge factor for investors.

Just re-blogged this, Jeff. Nothing like a little accuracy, even if it doesn't make for a good headline.

Jeff this is the kind of stuff that give us lenders a bad name. When one of these borrowers gets all the way through the loan process only to find out they did not qualify the bororwer now has a bad taste when it comes to lenders which just perpetuatues the stereotypes we battle already. I thought these guys would have been out of the business by now but I guess not.

Hi Jeff -- No loan is 'easy' as far as I'm concerned. However, many a consumer does get sucked in by all the misinfo out there...and there's plenty of it!

Jeff, Great post. Full some great facts. I work with several Realtors in the Dallas area and I hear it off and on why we can't offer what FHA is offering. I would if the client meets those guidelines and the lenders are buying it.... The internet is a great tool where we can get some much information quickly but it also has caused some problems with the bad and misleading information out there.

Oh, oh here we go again. Someone's got the smoke and mirrors bandwagon cranked up.

Jeff. once again you educate and entertain all at the same time. Bravo. (Loved the tag in the photo!)

The most important thing is to deal with a quality "Mortgage Richer" first. I understand the goal of home ownership for many. It seems sometimes like an impossible mission especially when a client’s credit score is under 580. However it can be done as long as the client is ready to make the proper improvements to their score in order to achieve their plan.

It's not the score that matter’s it's the client’s energy to do what is needed to achieve their home. I disagree with b/s loan programs as well but I always will coach a client that does qualify until they do. Plus I will stick with them for 1 month to 1 year. If they want a home then I want to guide them to qualification. Not all are the same

JOE... . that is just sad... and actually pathetic. Borrowers aren't suppose to know the whole process, hence why they seek out like-minded professionals. The problem is, not everyone is a true professional and or upfront. thanks

BARBARA... . the question is why are there so many articles with misleading information floating around now more than before. My guess.. because business is slow for many and the old sales theory is stick 10 up on the wall and maybe one will still be up there after 30 days... sad, but some have been taught this. And thanks for reblogging this.

GARY.... ,. not sure if you know Ken Cook from AR, but he did this post a few weeks ago from a mailer that a client of his received from another lender... OMG... it was beyond misleading and it looked like it came directly from HUD... companies and individuals will do this. Desperate times will bring desperate measures... and thanks for posting this on your outside blog.

DON... . that's even worse when 2 people do the same thing from the same company and both fail... rut row.. just like when I had 1 borrower a year ago get the same answer from 4 different loan officers from Wells Fargo, yet it was the wrong answer. Bad enough when the wrong info comes from 4 different companies, but 4 from the same company? thanks

DARRELL... . irresponsible? nah, they don't care... they have one thing in mind... to make the phone ring and hope that they can get people in the door, stick them on the wall, and hope at least one is still sticking by the end,... sad, but it's reality.

LOREENA... . it wasn't even the title, but everything that was mentioned in the article.. so much misleading and misinformation.... and consumers will fall for it because they don't know the difference. I will take a look at your post shortly.. thanks

PAUL... . we need more AG's in other states to get serious about this crap. That is a good idea.. I should forward that post to some people in Florida... thanks.. overall, we need to keep getting this info out there so more people realize. thanks

ERIC... . I have found that it is worse now than it was 2 years ago, because I think business is harder for so many... so in order to try and make a living... they put out false hope to so many in hopes of getting a good client and then make some money. thanks

JUL

2010

Jeff, great information for our consumers. Loans are difficult these days and people need to know it.

JUL

2010

I had a client a few months ago that was being sent "pre-approval" letters for a loan, all the way up to his current mortgage file being sent to attorneys for collections. I had a buyer. It was not a short sale.. we did manage to get his home sold and closed before he incurred any additional charges... but there is no way he could have qualified for what they were offering him.. He had not made a payment in 6 months, had no job... etc etc.. SHARKS out there.

JUL

2010

Thanks for the info. Great post!

AUG

This could not possbliy have been more helpful!

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