FHA Appraisal 5 Pain Points
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FHA Income Hack
FHA Home Loans
FHA home loans are mortgage loans that are insured against default by the Federal Housing Administration (FHA). FHA loans are available for single family and multifamily homes. These home loans allow banks to continuously issue loans without much risk or capital requirements. The FHA doesn't issue loans or set interest rates, it just guarantees against default.
FHA loans allow individuals who may not qualify for a conventional mortgage obtain a loan, especially first time home buyers. These loans offer low minimum down payments, reasonable credit expectations, and flexible income requirements.
What is a FHA Loan?
In 1934, the Federal Housing Administration (FHA) was established to improve housing standards and to provide an adequate home financing system with mortgage insurance. Now families that may have otherwise been excluded from the housing market could finally buy their dream home.
FHA does not make home loans, it insures a loan; should a homebuyer default, the lender is paid from the insurance fund.
Buy a house with as little as 3.5% down.
Ideal for the first-time homebuyers unable to make larger down payments.
The right mortgage solution for those who may not qualify for a conventional loan.
Down payment assistance programs can be added to a FHA Loan for additional down payment and/or closing cost savings.
FHA Streamline Refinance
An FHA Streamline simply means that you currently have an FHA loan and you want to refinance into a new FHA loan. This type of loan is mainly used for lowering your current interest rate. Although, the borrower is not able to take cash out for consolidating debt or home improvement. The benefits of a streamline refinance are reduced documentation requirements and potentially lower MIP. A client may qualify for reduced income and credit documentation, reduced appraisal requirements or both.
If an FHA streamline mortgage is for you, at Loan Pronto, the process is quite simple. Unlike your first mortgage, income verification is not required, and an appraisal is unnecessary. Additionally, we only need a copy of your driver’s license, current mortgage statement and your home owner’s insurance agent contact information. With that, you are on your way to an FHA Streamline mortgage loan!
FHA Versus Conventional Loans
The main difference between a FHA Loan and a Conventional Home Loan is that a FHA loan requires a lower down payment, and the credit qualifying criteria for a borrower is not as strict. This allows those without a credit history, or with minor credit problems to buy a home. FHA requires a reasonable explanation of any derogatory items, but will use common sense credit underwriting. Some borrowers, with extenuating circumstances surrounding bankruptcy discharged 3-years ago, can work around past credit problems. However, conventional financing relies heavily upon credit scoring, a rating given by a credit bureau such as Experian, Trans-Union or Equifax. If your score is below the minimum standard, you may not qualify.
Bankrupcty and FHA Loans
Yes, generally a bankruptcy won’t preclude a borrower from obtaining a FHA Loan. Ideally, a borrower should have re-established their credit with a minimum of two credit accounts such as a car loan, or credit card. Then wait two years since the discharge of a Chapter 7 bankruptcy, or have a minimum of one year of repayment for a Chapter 13 (the borrower must seek the permission of the courts). Also, the borrower should not have any credit issues like late payments, collections, or credit charge-offs since the bankruptcy. Special exceptions can be made if a borrower has suffered through extenuating circumstances like surviving a serious medical condition, and had to declare bankruptcy because the high medical bills couldn't be paid.
How to get an 850 Credit Score
A flawless 850 FICO® score unlocks the lowest interest rates, elite credit card offers, and top-tier negotiating power on loans. At BlueWater Credit, we’ve guided thousands to exceptional scores. Follow this step-by-step roadmap to elevate your credit profile and lean on our experts whenever you need help.
1. Assess Your Starting Line: Pull Your Credit Reports
Start with a clear picture of your credit history. Order your free reports from Experian, Equifax, and TransUnion at AnnualCreditReport.com. For full FICO® score monitoring, you can also check your scores through this MyScoreIQ link.
Review your reports for:
- Accounts you don’t recognize (possible fraud)
- Late payments or delinquencies
- Recent hard inquiries
- Public records like liens or bankruptcies
Keep copies of each report so you can track progress and catch any surprises early.
2. Build an Unbreakable On-Time Payment Streak
Your payment history makes up 35% of your score—the single most important factor. To keep it spotless:
- Automate all bills, from mortgage to utilities
- Set reminders at least two days before due dates
- Maintain a buffer in your bank account to avoid accidentally missing payments
A consistent record of on-time payments signals that you’re a low-risk borrower.
3. Crush Credit Utilization: Keep Balances Low
Credit utilization makes up 30% of your score. Aim to keep balances under 10% of your credit limits:
- Make multiple payments throughout the month
- Request credit limit increases periodically (but don’t spend more)
- Spread purchases across cards to avoid any single high balance
Low utilization shows lenders you use credit wisely—not excessively.
4. Cultivate a Healthy Credit Mix
Your credit mix accounts for 10% of your score. A balanced profile may include:
- Revolving credit (credit cards, lines of credit)
- Installment loans (auto, mortgage, student)
- Secured cards or retail accounts
Only open new accounts when they serve a purpose—too many new accounts can hurt more than help. If you’re looking to diversify your mix, explore current credit card offers here.
5. Preserve Account Age: Honor Your Oldest Accounts
Length of credit history makes up 15% of your score. Here’s how to maximize it:
- Keep old accounts open, even if unused
- Downgrade fee-based cards instead of closing them
- Avoid opening too many new accounts at once
Long-standing credit relationships show stability and reliability.
6. Minimize Hard Inquiries When Applying
Hard pulls can temporarily lower your score. Reduce their impact by:
- Bundling mortgage or auto loan rate-shopping into a 14-day window (FICO treats them as one)
- Using prequalification tools that rely on soft inquiries
Strategic planning keeps your credit momentum strong.
7. Monitor Regularly & Dispute Issues with BlueWater Credit
Even a small error can hold back your score. Stay proactive by:
- Signing up for credit monitoring to catch new accounts, inquiries, or delinquencies
- Contacting BlueWater Credit immediately if you spot anything inaccurate or suspicious
Our experts will handle disputes with the bureaus so you can stay focused on your goals.
8. Use Credit-Builder Tools Wisely
If you’re building or repairing credit, the right tools can speed up progress:
- Secured credit cards (backed by a deposit, but report like regular cards)
- Credit-builder loans (payments are held in savings and reported monthly)
- Authorized user status on a trusted person’s account
Use these products strategically and manage them responsibly to build trust with lenders.
9. Make 850 a Lifestyle, Not Just a Goal
Achieving a perfect score is impressive—but maintaining it is where the real power lies. Stick with your good habits: make on-time payments, keep utilization low, monitor your reports, and stay informed.
Barrett Financial Group, LLC NMLS #181106
© 2024 All Rights Reserved. Kurt Kessler NMLS# 365130 | Barrett Financial Group, L.L.C. | NMLS #181106 | 3207 Grey Hawk Court, Suite 110, Carlsbad, CA 92010 | CA 60DBO-46052 & 41DBO-148702 Licensed by Dept. of Financial Protection & Innovation under the California Residential Mortgage Lending Act. Loans made or arranged pursuant to a California Financing Law License | Equal Housing Opportunity | This is not a commitment to lend. All loans are subject to credit approval. nmlsconsumeraccess.org/EntityDetails.aspx/COMPANY/181106 -NMLS Consumer Access /Legal Disclaimer - This information is not intended to be an indication of loan qualification, loan approval or commitment to lend. Other limitations may apply. This site is not authorized by the New York State Department of Financial Services. No mortgage loan applications for properties located in the state of New York will be accepted through this site.