FHA lowers credit standards to qualify for loans.

Standard credit scores for FHA loans are at 580.  With a score at this level, the down payment is 3.5%.  However, FHA will now accept even lower scores, but will require a down payment of 10%.  While this will definitely open the door for more people to become eligible for a loan, we encourage you to take a step back and really look at the larger implications.

If you have less than a 580 credit score- you have really bad credit  But the score is not what is important- it’s the behaviors that has led to that score that’s important.  If you have a lender willing to push through a loan for you at that low of a score, what that loan officer is saying to you is that they are prepared to give you a loan that you should not get and eventually your loan will contribute to the next national financial crisis you and this country face.

Did we mention that FHA is a for profit company that will not take a hit if you default on your loan?  Also, any lender that is willing to underwrite that kind of loan will not be as willing to service that loan.  In other words, as soon as they get it done, they are going to sell it to eliminate their risk of loss.

When we have  clients go through our credit repair course, we have a repetitive motto- do not skip steps.  The most important part in credit repair is not cleaning your credit, rather fixing the behaviors that lead to and maintain good credit.  Do not skip this step.

Don’t be a victim of predatory lenders.  Get your loan the right way.

Make a Choice.  Make a Change.  Delta.