FHA credit scores have changed for the most part. I just had a client tell me the other day that her loan officer, who she knows and trusts, is trying really hard to make the loan work. Okay, so what are your credit scores? "512/530/548"... rut row. And they are trying what? Trying hard? At this moment, there are only a few investors that will go below 580. But from what I know, it's really tough under 580. Most lenders are at 620 or above. There are a few at 600 and just a few that will go down to 580 credit scores for FHA loans.
So, borrower beware. If your loan officer isn't telling you the straight scoop or warning you now, if you are on the bubble, you might want to find a mortgage professional. The easiest excuse to deny you is, "well, credit scores, aka fico scores, just changed, sorry."
I have three major pet peeves !!!!!
- Good faith estimates (this link tells you what to look for and how to read a Good Faith Estimate)- If a loan officer qualifies you and you don't get a good faith estimate soon or within 24 hours, that should be a read flag. Once they give you a payment and closing costs, they already have it in the system. Which means that they can e-mail that to you at that exact moment. Please read how important this is. Good Faith Estimates - Did you get one?
- Closing time frame - It doesn't take 30 to 45 days to close a FHA loan. I just closed one in 5 business days, from start to finish. Do we like 30 days from start to finish to close a FHA loan? Yes, many of us do. But they can usually be done in 15 to 25 days. If a loan officer or a realtor tells you that FHA loans take way to long, then they either don't know what they are talking about or aren't experienced.
- Credit score changes - I have read several blogs stating that credit scores will change across the board on a certain date. This can only be done by HUD or Congress. Lenders/Investors change them when they want to, but not together. It just doesn't work this way. And HUD or congress hasn't announced any changes.
Summary : You really need to listed to the person that you are speaking to, listening for key words or phrases that could be red flags. I had a potential client the other day who spoke to another loan officer before myself, in which he was very close in going with him. I asked him what rate he was getting and he said that the loan officer was giving him 5.0%, but he'll try for 4.875%. Huh? Try, it's either there or not... it's literally 5/8 of a point worse to get 4.875% as of that day. On a $200,000 loan, just that extra 1/8 of a percent would cost you an extra $1,250. It sounds great when your loan officer says that they will try, you believe them. But this is the reality of it.....I told the client that he was told what he wanted to hear, because he doesn't know any better and that it sounded good.
When a loan officer doesn't take the time to explain things in detail or to educate you, I have a problem with that. When we educate you, you can become dangerous with accurate information. You know how to shop better. But why would you want to then shop someone that was upfront with you and explained everything in detail. Lastly, if the loan officer quotes you rates and fees, but never goes over the lock-in procedure at that time, those quotes and or good faith estimates don't really mean anything. Just think about that. Good luck..
Tomorrow's blog is going to be about FHA credit and the updated versions of what is happening and what isn't.
- FHA Loans - USDA Loans - VA Loans -
- Energy Efficient Mortgages -
- Conventional Loans - 203 k loans -
- Mortgages -
Experience & Knowledge at its BEST !!!
For more information on FHA loans, please go to this link. The FHA Expert
For more information about the 2008-2009 Tax Credit for First Time Homebuyers : 2008 Tax Credit
For important mortgage insight to watch for, please read : Consumers need to be aware of these Red Flags !!!!
Copyright © 2009 by Jeff Belonger