Credit Score Below 620

Why does a credit score below 620 often not qualify for an FHA loan? Traditionally a 620 credit score was the standard for qualifying for a conforming mortgage. However, today, most FHA lenders seem to have adopted this 620 score requirement into their FHA guidelines.

There is a common misconception about how the financing of an FHA loan actually works. Most people think that the government is actually lending them the money. Although the lender must be approved by the federal government to make FHA loans, the government is actually only insuring the loan. It is the lender that must provide the funds for the loan.

As such, most lenders are subject to the guidelines that are placed on them by the investor source providing the money. Investor guidelines are not likely to loosen up in the near future.

The solution - try to keep your credit payments on time and limit the amount of credit you are using. Please talk to us a Equity Loans, LLC. You can get our contact information by visiting our web site at www.equityloansoregon.com.