Your FHA Fact of the Day!
DID YOU KNOW:
The guidelines we will use are the following:
We require a minimum of three pieces of credit that have a perfect 12 month history.
At least two of the three must be traditional credit – ie: rent, mortgage, auto loan, credit card, etc
(Note, if rent is to an individual, we will require canceled checks or bank statements for a minimum of 6 months)
One piece of credit can be from the following – Utilities, Auto insurance, rent to own, school tuition, cell phones, department stores, personal loan (with repayment terms in writing and canceled checks) This type of credit reference is not acceptable if it is payroll deducted.
IF A TRADELINE CLOSED OR WAS LAST USED WITHIN THE PAST 12 MONTHS BUT HAD A 12 MONTH HISTORY, IT IS ACCEPTABLE AS PART OF THE THREE TRADELINES.
NOTE: Accounts shown as “authorized user” do not count in building the borrower’s credit history.
REMINDER – if a borrower does not meet the above credit guidelines, the following guidelines come into play.
• Qualifying ratios are to be computed only on those occupying the property and obligated on the loan, and may not exceed 31 percent for the payment-to-income ratio and 43 percent for the total debt-to-income ratio. Compensating factors are not applicable for borrowers with insufficient credit references.
AND
• Borrowers (with or without non occupying co-borrowers) should have two months of cash reserves following mortgage loan settlement from their own funds (no cash gifts from any source should be counted in the cash reserves for borrowers in this category).
Acceptable Types of non-traditional credit references:
Utilities if not included in rent
-gas
-electricity
-water
-land line home telephone service
-cable TV
School Tuition
Retail Stores
Rent to Own stores
Internet/Cell phone services
Payment to child care providers – made to a business providing such services
A personal loan from an individual with repayment terms in writing and supported by cancelled checks for 12 months
No comments:
Post a Comment