Did you know that credit scores affect more than the approval or denial of your FHA mortgage application? Your overall costs for the mortgage over the long term will depend in part on your FICO scores, as we’ll explore below. The better your credit scores, the more competitive the rates and terms may be for the FHA loan. FICO Scores And Your Down Payment You have not one, but TWO FICO score standards to meet when you want to apply for a large loan such as a mortgage. The first standard is from the FHA itself (these are the FHA minimum requirements for the Single Family home loan program), and the second is your lender’s standards. These will vary from lender to lender. And your lender’s standards may or may not be higher than the FHA minimum. FHA FICO score minimums begin at 580 or better for maximum financing and the lowest down payment requirement which is 3.5%. FHA loans technically permit borrowers with FICO scores between 500 and 579 to apply for a loan with a higher down payment–you will be required to make a 10% down payment in such cases. This is how your credit scores affect your […]
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