FHA pre-approval no longer qualified?

FHA pre approval no longer qualifiedYou have an FHA pre-approval but may not be qualified as of October 4th, 2010.

Changes to FHA guidelines may leave many home buyers unable to qualify.

Could you imagine?  What an horrible surprise if you get your offer accepted and you are no longer qualified for an FHA loan?

Why you may no long be qualified? FHA approvals require a case number before the terms of the approval can be locked in.

You must have a property address (aka accepted purchase offer) before a FHA loan can be approved and guaranteed.

This approval is specific to the property. If your lender has given you an approval and you’re still out looking for homes – you MUST get re-approved now.

Starting October 4th, new case numbers will issued under considerably different qualifying guidelines.

FHA changes that will affect your pre-approval

There are a couple of major changes could result in your current pre-approval not being worth the paper it’s written on.

First, we’ve written extensively about the changes in the monthly mortgage insurance premium change.

This will absolutely result in your monthly payment increasing.

If you are currently looking for a home in the range of the MAXIMUM you are qualified for – you now qualify for a little less home.

Second, credit score requirements for most buyers have increased from 620 to 640.

The credit score requirement isn’t a hard and fast rule set by FHA, but the big investors and banks have made the decision that they will only accept the higher score on Governement loans.

Good news is that there are no penalties or increase in costs if your credit score is at the minimum range.

Non-government loan programs have Fannie Mae risk based pricing (higher closing costs)  if your credit score is below 720.

You are now empowered

Unexpected surprises and misinformation strip you of your ability to make informed decisions.

Now that you know about these changes, you are empowered.

If you are pre-approved, go back to your lender and have them update your information based on the new guidelines.

If your lender has not already contacted you….call me 🙂

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4 Responses to FHA pre-approval no longer qualified?

  1. Lizzy Almendares November 11, 2010 at 9:53 pm #

    How can I buy home with a low credit score?

    • Legacy Content November 12, 2010 at 11:19 am #

      Hi Lizzy,

      Low credit scores are only temporary – I have actually found that most low credit scores are the result of not knowing how to build good credit, not necessarily because of bad credit.

      We help people all the time get their credit on track to purchase in the future. If you’re interested, email you contact info and we can talk more.

  2. Anna Rice October 5, 2010 at 11:03 am #

    Hi [Broadview],

    I wanted to let you know that what you do by informing people is a wonderful thing! I purchased a home 11 months ago and thanks to your knowledge, research and articles I was very informed during the process. Buying a home is very rewarding but it can be very overwhelming if you do not know your options.

    Thank you for doing what you do and for caring so much!!

    • Legacy Content October 5, 2010 at 11:10 am #

      Anna, thank you so much for your kind words, I really appreciate it! Thank you for sharing 🙂