FHA Insured Loans Mortgages with Low Credit Score; Low Down Payment; FHA, Fannie May, Freddie Mac Majority Providers
Posted on | July 20, 2010 | No Comments
Applications for the mortgage loan process for all major processing companies require a personal credit report. One’s credit report score is a variable that is considered when a mortgage company grants mortgage loan approval to an individual. There is currently action being taken by companies and loan providers to reduce the risk of loan default by the borrower. Part of that action is to more stringently review an individuals credit scores and to put new contingencies in place for loan approval based on one’s average credit score. Low scores will find it more difficult to attain a loan now that new regulations have been put into place. During the second quarter of 2010, no FHA insured loans were issued to borrowers with credit scores below 500.
Most loans that were approved went to individuals with scores above 620. HUD commissioner said “By protecting FHA’s capital reserves, we can continue providing affordable, responsible mortgage products and will remain the nation’s largest source of home purchasing financing for underserved communities.” The credit score regulation is just one of several tactics being used to reduce the risk of default. Low down payment loans are still available and in business play. Also, congress recently raised the max that people could borrow. The FHA, Fannie May and Freddie Mac still account for the majority of lending providers in the market today.
Author: Camillo Zucari