It is hard to imagine that paying all of your bills on time, paying cash for cars and not using credit cards could be a bad thing. What is this world coming to? But the reality is that not showing a lender your ability to use credit wisely is a bad thing in their eyes. You will want to talk to a lender to see exactly what your credit looks like and I can reccomend a good one. If they say you do not have any credit they might suggest opening a credit card in your name, using it and paying it off each month.
Good job on using debt wisely and good luck in your home purchase. If I can help you with that, It would be my pleasure to do so.
Mary Beth Harrison
The Harrison Group
Keller Williams Realty
The good thing about FHA is that they focus more on income to debt ratios and payment history than they do on credit scores. FHA has been able to help those Buyers that were previously considered "sub-prime" because of credit scrore and is continually adding and enhancing their programs. And they have recently raised the maximum loan amount to $271,050. So this really opens up a lot of the market. The previous maximum loan amount was just over $200,000.
Now, that being said, one of the key issues is to find a lender that is well versed in the FHA guidelines. These loans are not simple and the guidelines are continually changing based on new underwriting requirements. Before the sub-prime collapse last year, there were a number of lenders that did not even have an FHA progarm in their products because they did not want to bother with them. Times have changed and now most of these lenders are scrambling to bring FHA products into their offerings. But the training is extensive.
The only way to answer the last part of your question..."Can they get a FHA loan?"...is for them to go through the pre-approval process. I have a form online that they can fill out and I can send that to one of my FHA lenders for review. They will be able to tell them with 24 hours what they can qualify for. The form is at http://GetPreApprovedFREE.com.
No obligation, no charge, no pressure...but at least this way they will know.
Hope this helps. Please feel free to call or email if I can answer any other questions.
Alan Wynn - Realtor
Like NO ONE Else!