Having a certain amount of credit history is important to being able to qualify for an FHA mortgage. The credit history can be traditional (such as credit cards, student loans, mortgages, car loans, etc.) or non-traditional (such as utilities, cell phone, non-payroll deducted insurance, etc.).
With most lenders FHA loan programs they are looking to see 3 trade lines of 12 months each, but I've read as little as 1 traditional trade line with 12 months of recent credit history can be acceptable (that is our guideline in order for a score to be able to be used - a minimum of 1 trade line either installment and/or revolving that has been active for at least the previous 12 months).
Does the bank you are going with accept non-traditional credit? I have outlined a lot of information about non-traditional credit in the web reference, including examples of non-traditional credit that can be used (perhaps some you haven't already thought of), how much of it is usually needed, and how someone can verify their non-traditional credit in order to qualify for a mortgage. If he cannot document enough non-traditional credit, then he may not be able to be deemed credit-worthy for a mortgage. It's a shame this lender wasn't able to make this determination earlier in the process - as in WHEN YOU APPLIED FOR THE MORTGAGE AND CREDIT WAS IMMEDIATELY CHECKED (that is me yelling at your bank for you).
http://www.fhaoutreach.gov/FHAHandbook/prod/infomap.asp?address=4155-1.4.C are the official FHA guidelines on "Borrower Credit Analysis"
Is your bank M&T Bank?... more
I am providing FHA guidelines from the government web site. I am cetainly not a loan officer or an underwriter however you might check with othermortgage lenders in your area. The guildlines below sound as though 12 months or non-traditonal credit may be acceptable. It sounds as though the boss referred to is FHA and that FHA will not insure the loan. You might try finding a mortgage broker as oposed to a Bank, as mortgage brokers have more resources and can shop a multitude of banks.
FHA stipulates that you the borrower must have 3 credit references from 2 groups of non-traditional credit sources.
Group 1 - The first group of references is weighted more heavily than the second because it is considered a more accurate predictor of your credit worthiness.
Group 1 consists of rental housing payments, utility payments (gas, electric, water). Also included are telephone, and cable TV bills.
Group 2 - FHA qualifications are possible by including payment references such as: insurance payments (medical, auto, life, renters ins), payment to day care, internet cell phone, a 12 month bank documented history of deposits resulting in increased balance. Group 2 also accepts individual loans where the repayment terms are written out and signed by both parties.
FHA Rules for Non-Traditional Credit
To qualify for an FHA loan with non-traditional credit you should have 3 positive credit references and at least one being a group 1-credit reference. To be accepted under FHA qualifications you must display - in summary:
- No late payments on rental housing (group1)
- No more than 1- 30 day late on other payments (group1)
- No collection accounts (other than medical) in the last 12 months.
Good luck to you.... more
Before doing any renovations at all, you should have a local real estate come in and do a comparative market analysis on the home to see how much it is worth as is and what it would be worth with the upgrades. If the difference in your area between an immaculate home versus a fixer upper is not enough to cover the renovations, just sell it the way it is. No one can accurately predict what real estate values will do but all the "experts" seem to believe that prices are either at rock bottom or will drop another 10% or so. If you're going to rent and wait it out, I would leave it and do the renovations when you're ready to sell. If you do it now, you may have to do it again later. If you need a referral in your area or have any other questions, please feel free to contact me. Good luck!
Certified Buyer Representative
Senior Real Estate Specialist
Century 21 Princeton Properties
Top 2% of Century 21 Agents Nationwide... more
Hi Uticalemissa. You can try looking up the phone number and calling, calling and calling. Try asking for REO or Loss Mitigation department. Be forewarned; it will be difficult (if not impossible) to get the correct person and make a deal. Perhaps they will be able to advise of a local real estate agent who will be getting the listing.
Keller Williams... more