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Can we Qualify for an FHA loan?

I have been been technically self employed for a little over a year now, but this January will be my second tax return while being self employed. My credit score is roughly 680 at this moment. My fiance on the other hand has been a full time teacher for 6 years now but her credit score is roughly 540. We have recently both signed up for Lexington law services and she has recently signed up for a secured credit card  because we would like to buy a home in January. We would have over 20% to put down on a new home because we currently own a pretty nice condo free and clear. I am just wondering if we would qualify for an FHA loan and would and lenders even give us a mortgage? or do we have any other options?
  • August 11 2013 - Newton Falls
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Answers (5)

Profile picture for jdust
Hi,
I can generate loans in 50 states.  Please contact me and I can help you.

The FHA guidelines for self employed borrowers is as follows:
if the period of self employment is between one and two years, then to be eeligible for a mortgage loan, the individual must have at least two years of documented previous successful employment in the line of work in which he/she is self-employed, or in a related occupation. 

I have credit rescoring contacts I can provide you with and they will be able to consult you about restoring your wife's credit. 
But here are some of the things to do to improve your credit score:
1.) Don't use more than 50% of credit cards
2.) Don't use/have balance on credit card/department store card that doesn't have limit 
3.)  collections
4.) pay off debt or negotiate with creditor
...

I would be happy to help.

Ayad
NMLS#  879728
phone: 703-871-1362
  • August 13 2013
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Are are some tricks of trade regarding increasing your credit scores quicker. Try to find a local Loan Officer who can guide you through this tricky process.

Best of Luck!
  • August 12 2013
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Profile picture for cassandraevers
Talk with a lender NOW and have them pull credit and go over it with you. If you have lines of credit-be sure to add your fiancé as an authorized user so she can benefit from your on time payments and low balances (hopefully you have these 2 things solidified as those factors are approx. 65% of your credit score). A good lender will help you get ready and stick with you until January! 580 to 640 is not impossible
  • August 12 2013
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Make sure that you talk to a knowledgeable mortgage lender up front.  I have had too many buyers call me after credit repair or during it and they were never advised of the steps they needed to do on their credit.  For instance, 1 card may not be enough and you should make sure that the balance stays under 10% of the credit limit for maximum credit score points.  Having 20% down helps a lot of situations.  FHA loans will average your self-employed income as long as the income is increasing from 2012 to 2013.  But make sure you definitely talk to a lender as well because I find that some of the credit repair companies just don't give the best advice.

I hope this works out for you
  • August 11 2013
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Profile picture for wetdawgs
Maybe on your income alone, but with a credit score of 540 your fiance's income will not be considered.    If she sticks with an action plan to increase her credit score it is possible she'll make great progress in the next six months.   Lexington law may be able to give her guidance, but she's got to take the actions herself.

  • August 11 2013
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