If you are an individual with poor credit in search of a mortgage, an FHA mortgage could be your answer. The Federal Housing Administration will guarantee your mortgage if you qualify; this guarantee could get you a competitive interest rate. Here is what you need to know about FHA mortgage loans. If you are struggling with less than desirable credit you can still qualify for a good mortgage through the Federal Housing Administration. Many homeowners with poor credit are limited to subprime or bad credit lenders for their mortgages. While it is possible to qualify for a mortgage with bad credit you will pay a much higher interest rate for the loan. Because an FHA mortgage is guaranteed by the government you will receive a much better interest rate then you would from a bad credit lender. The Federal Housing Administration is not a mortgage lender; they simply guarantee the mortgage loans. If you are accepted into an FHA mortgage program, the mortgage lender will not consider your past credit history to give you a loan. If you are applying for an FHA loan with a poor credit rating you will need to explain your credit difficulties in writing when you apply. The FHA will require that your last year of credit meet minimum guidelines for on-time payments. They will also consider your debts and assets when evaluating your application. If you are approved for an FHA program this is your first step in rebuilding your credit. FHA mortgage are an excellent opportunity for homeowners with credit problems to get back on track. To learn more about your mortgage options and how to avoid common mortgage mistakes, register for a free mortgage guidebook using the links below. |
