Low FICO Scores Allowed On FHA buy Loans With A 5% Down Payment
There is a new program designed to get more folks into homes who would otherwise not be approved for a mortgage loan. This is a breath of fresh air in a world of lending where buy buyers recently must have a 640 score to get underwritten. Now, a threshold score as low as 580 is allowed for home buy loans. There is a minimum of 5% down payment required for borrowers with scores of 580 -599 and the down payment may not be gifted.
The relaxed threshold FICO scores will help home buyers nationwide. The approach with lower FICO thresholds is blazing a trail back to shared sense underwriting and will help thousands of home buyers. It seems shared sense underwriting has taken a interruption for over a decade when lenders began substituting credit scoring for credit grading. Now, with this throw back approach to underwriting, more credit worthy borrowers will be able to call themselves “Happy Homeowners.”
First Time Home Buyers are those who have been most impacted by credit tightening which has occurred during the housing slump. Ironically, it may be the First Time Home Buyers who will be instrumental in pulling us out of the housing slump. Now, there is a superb mortgage loan program that will foster home ownership for first time home buyers and others.
Buyers today may not relate to what shared sense underwriting is all about because they have been indoctrinated into the false belief that a credit score is a correct assessment of credit worthiness. Lenders began relying on scores to determine whether a borrower is qualified. There is so much more that goes into what quality underwriting should be. There are many borrowers who have misreporting on their credit bureau report and their score is a low subprime score due to the misreporting. Borrowers who may have had their file locked out of underwriting before, now can have their file looked at and possibly closed.
A buyer’s first step to home ownership should be preapproved for a mortgage loan. This should happen before they look at any homes and before they start working with any realtors. Good realtors won’t show a house unless a buyer is preapproved. *This program is not obtainable by most FHA lenders.
Bill Burress, Nationwide Mortgage Expert can help you with your mortgage needs. Bill has been originating mortgages since 1980 and is one of the most knowledgeable mortgage loan originators today. For more information on this mortgage program or any of your mortgage needs, contact Bill Burress today with the fast inquiry form.