| Scenario: | | | | disabled veteran, you can take help of SAH (Specially |
| I am a disabled veteran and live in Texas. My credit | | | | Adapted Housing) program. In October 2009, VA Loan |
| score is somewhere between 720-740 and I earn only | | | | Guaranty Service has increased the maximum grant |
| 18,000. My husband's middle credit score is about 594, | | | | amount (by about 6.3%) available to the eligible |
| highest being 660. He earns about 50,000 in a year. | | | | individuals. |
| We want to take out an FHA mortgage worth 82,000 | | | | If your husband wants to take out the mortgage loan |
| by making a down amount of 3.5%. Can you help me | | | | in his name, then he should raise his score before |
| out regarding how can we take out a suitable | | | | applying for a home loan. Check out the following tips |
| mortgage loan? | | | | to know how he can increase his credit score before |
| Solution: | | | | applying for a mortgage. |
| Going through your query, I feel that it would be best if | | | | • Do not purchase big price items with your |
| you take out the mortgage loan in your name. With | | | | credit card before applying for a mortgage and closing |
| your score, you can easily qualify for a conventional | | | | on the loan. |
| home loan apart from taking out an FHA mortgage. | | | | • Request your credit card company |
| You can obtain an FHA mortgage as your required | | | | companies to increase your credit limits so that it |
| loan amount is within the FHA lending limits in Texas. | | | | raises the percentage of your credit utilization ratio. |
| The advantages of taking out an FHA mortgage in | | | | • Use your old credit cards at least once in 6 |
| comparison to a conventional home loan are that you'll | | | | months in order to keep them active. However, pay |
| have to pay comparatively low closing costs and | | | | your outstanding balance every month. |
| lower down payment. The qualifying criteria for | | | | • Order and monitor your credit reports to |
| obtaining an FHA loan are also less stringent as | | | | check for any mistakes. Dispute inaccurate entries if |
| compared to a conventional mortgage. In the present | | | | any. |
| times, you can qualify for an FHA loan if your score is | | | | • Don't close your oldest credit account as it |
| more than 620. However, you'll have to pay an upfront | | | | can reduce your credit limit instantly. |
| mortgage insurance premium while closing on an FHA | | | | • Avoid opening new account till you have |
| loan. If you take out a conventional mortgage, then you | | | | closed on a mortgage loan. |
| don't have to pay any insurance premium when you | | | | If you want to take out the mortgage loan immediately, |
| make a down payment of 20%. So, if possible, try to | | | | then my suggestion would be to obtain the loan in your |
| arrange for the required amount if you want to take | | | | name for the time being till your husband's credit score |
| out a conventional mortgage. | | | | increases to 620. Then, if required, you can refinance |
| Since you're a disabled veteran, you can also take out | | | | the home loan and include both your names on the |
| a VA loan to buy a home of your choice. However, | | | | new mortgage loan. |
| you should obtain a Certificate of Eligibility to apply for | | | | At any point of time, you can take help of mortgage |
| such a loan. The Certificate states an entitlement | | | | community forums to get answers to your queries. |
| amount, which is a portion of your mortgage loan that | | | | You simply need to ask mortgage questions in such a |
| the VA (Department of Veterans Affairs) would | | | | forum and the experts in the field will answer them |
| guarantee for any service person. As you're a | | | | thus helping you to select a suitable home loan. |