Problem Credit Can Be Helped By Some FHA Loans
In the recent news is a lot of information about the subprime markets, the worries about foreclosure, but if you are current on your mortgage or have less than perfect credit and want to buy a home, where does that leave you?
I admit, the news of late especially with Congress trying to pass a bill to help move the housing market along is interesting and it has consumed some of the headlines. However, let us not forget that we are moving into the largest house buying time of the year: spring and summer. People move much more often in the summer months mainly because the weather is nice and the kids are out of school. If you are considering it, you may be consumed with worry about your less than perfect credit.
The housing market “crash” and the “credit crunch” are worrying plenty of people who want to be in a home. Some are staying in rental opportunities longer now than they would have just a few years ago. That may not be necessary. In fact, there are some outstanding opportunities for people to get into homes right now.
Avoid Subprime
With the fall of the subprime lenders, you will find it more difficult than ever to find a lender willing to loan to someone that has a low credit score. Rightly, so some people with credit scores that are too low will not be able to find any type of lending opportunity even from the FHA. Yet others, who will fall somewhere in the middle may find a lender.
FHA is able to help those with spotty credit scores to get into a home. They offer loans that do help consumers working on improving their credit, with proven income and employment. There is no doubt that you may pay a bit more for a loan this way through some lenders, yet the FHA programs do offer help to those looking for a way to prove themselves.
You will need to prove yourself to the Federal Housing Administration, though. To have approval for an FHA loan, you will need to provide details of your income, back records, paycheck stubs and anything else that can prove that you are a viable applicant. The FHA is not in the business to secure too risky loans, and these checks help to insure that is the case.
Is This New?
You may believe that this is something new that the FHA programs are doing. That is not the case. In fact, the FHA has a strong history of stepping up to the plate whenever there is a housing scare in which lenders are no longer willing to provide as flexible of loans as they used to.
An example of this happened in a recession during the 1980’s when many of the Texan housing markets fell drastically because of the oil situations there. While lenders reigned in their lending abilities or willingness, the FHA stepped right in to help stabilize the industry. In fact, the very foundation of the FHA is that of helping to establish home ownership in the United States (it was created during the Great Depression to help people buy homes.)
I highly recommend if you are in a situation where you have a good income history and can afford a mortgage, but are worried about shaky lenders, to use the FHA to help you get the home you want. You do not have to wait for a better market, especially when a number of opportunities like low priced homes are available. While the FHA cannot help everyone searching for a home with bad credit, it is able to help many that need and deserve an opportunity.
