Minimum 2015 FHA FICO Score Required
There is a great confusion concerning the question “what is the minimum FHA credit score requirements”, the main confusion occurs when a borrower is approved for a FHA home loan, with his credit score of 570, and then gets rejected by the lender because they request a credit score higher than 640. This gets very common now at 2015, as FICO score approved by FHA is turned down by the local bank or lender.
Minimum FHA Score For 2015
The HUD (U.S. Department of Housing and Urban Development) has set clear figures about the minimum requirements for the FHA backed loans. The minimum FICO score was decided by to opposite interests. On one side the need to help Americans reach their dream for owning a home. The second interest is to protect the federal funds from backing loans which will not be paid back.
The minimum FICO score can vary from the different FHA loan programs and the type of mortgage needed, so the best advice would be to find a FHA underwriter or councilor to help you learn the exact score needed for a specific case..
Minimum FHA Score Requirement – No Down Payment Mortgages
The most common FHA home loan usually referred to by borrowers interested in FHA mortgages, is the no money down mortgages. There are no zero down mortgages for the FHA any more, but the closest to 100% mortgage, is the 96.5% mortgage financing.
This means that unlike the regular mortgage borrower who needs to come to the closing meeting with 20% of the mortgage in cash down payment, the FHA borrower needs to come with only 3.5% down payments. The difference is huge! For a $150,000 mortgage, is $5,250 minimum downpayment for the FHA borrower compared to $30,000 minimum down payment for the regular borrower.
Since the risk for the FHA is high too as the federal administration, they set a minimum FICO score for these types of mortgages as 580. The borrower will need to prove their credit as 580 (minimum) or higher to be eligible for the FHA no down payment mortgages.
FHA Mortgage Programs For Less Than Minimum Score
Unfortunately many people do not even have the minimum score of 580 for the 96.5% mortgage finance program. For people like these there is another program with a different minimum FHA score requirement. People with credit score of 500-579 will be able to be approved for a FHA home mortgage, but in the following condition.
They will be allowed a mortgage with 10% down payment. Their score is so low, that insuring their mortgage is a greater risk on the federal tax payers money, so their FHA minimum down payment is higher than the FHA no money down options. They still get 50% off from the regular down payment of regular mortgage.
But FHA Minimum Score Are Irrelevant
It is important to remember that it is not the FHA that is lending the money, it is the bank! The FHA is insuring the bank (or lender) that the payments and mortgage returned will be completed on time and without delays. Because it is the banks who actually lend the money, it is up to them to decide which minimum credit score they approve.
As far as minimum score the banks and lenders request for FHA loan approvals is 620 or even at some cases 640. So having a clear 590 FICO score may be fine for passing the FHA approval but will end in a total rejection by the banks. In this case the borrower will need to raise their FICO score, by paying back debts and clearing negative items from all three credit bureau agencies.
Though it might be done alone, many choose to get some guided ebook help to follow all the insides tips and tricks. These ebooks are not expensive (less than $50) and can raise the credit score by 30-60 points which can be the difference between “yes” and “no”. A higher score will save them definitely thousands more with better rates and lower interest.
So What Is Your Next Step?
If you do nothing, don’t expect anything to happen..
Every week you are wasting money.. sending dozens of dollars to the rich credit companies, who relay on you to keep doing NOTHING.
If your score is below 700, you might want to do something about it – get this ‘Credit Repair University’ which will save you money and time.
Yes, you might need to invest a small sum to get a grip of things.. But if you think education is expensive.. try ignorance..
You are probably paying thousands of dollars per year in fees and interests to credit companies which could be going straight to your pocket.
So do your math… and take action NOW.