subject: FHA Loan Qualifications - What is the Requirements [print this page] Author: Jackie Juarez
Being credit-free is great but it has its disadvantages. Without a record of credit, it'll be difficult to make an application for a loan from standard lending companies. And without a record of credit, the bank has no credit score to review and check whether you are fit for credit or not.
The good news is, you can still keep that clean credit report and be able to sign up for a loan. The FHA enables you to apply for credit with non-conventional credit institutions. In the FHA loan qualifications, it indicates that signing up for a loan is possible even if you do not have trade lines with the 3 major credit bureaus.
As a potential borrower, you are needed by the FHA to submit 3 credit references from the two groups of non-conventional credit resources. The first group is made of utility payments including electricity, gas ; and rental payments. This group is given more weight and is a good indicator of your creditworthiness. The second group, on the other hand, is consists of payment to day care, bank records showing increased savings over time and insurance payments.
The FHA will also look into your work. You have to have a stable job during the past 2 years and show the agency that you can manage your payments. To begin your request, you have got to submit the following requisite documents : evidence of residence including all your addresses during the past two years ; employment history ; and income tax returns or W2 for the previous two years. Also, if you're a former veteran, you've got to include your discharge papers in the documents to be submitted to the FHA. These documents will indicate your fiscal position in the past 2 years. The FHA will appraise and measure your credit standing based mostly on these credit references.
in summing up, the FHA can grant you a loan even if you don't have a credit history to support your creditworthiness. Having mentioned that, you must pay your bills on time, prove that you've a stable employment and you are responsible enough to meet your financial obligations. So you see, you still have credit options even if you do not own a Visa card or an automobile actually. Making an application for credit with the FHA is easy but you've got to take note that you have to take care of your financial reputation otherwise, you can lose this advantage altogether.
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