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FHA Compensating FactorsCompensating Factors for FHA Home Loans When your payment or combined monthly debt payments is higher than the limits prescribe by FHA, the FHA mortgage may still be approved with FHA compensating factors. Here are several FHA compensating factors to support borderline loan applications: Energy efficient dwelling Less than 10% increase from old rent/house payment to the new housing expense Your excellent savings ability (as shown by savings accounts, IRA's, etc.) 3 or months cash reserves (house payments after closing) that are not part of a gift Limited use of credit Borrower has potential for increased earnings Borrower has income that cannot be used as qualifying income Larger than minimum down payment Please understand that good credit, steady income and residual income are not compensating factors but are certainly part of the overall credit evaluation. I have included a page on how to calculate your qualification ratios. I have included a page on documentation requirements. Learn more about improving your credit scores I have an article "Buying your home in 2008" by email explaining negotiating strategy in today's market. If you have had credit issues in the past, it is absolutely critical in today's market that they be addressed before you try to get a mortgage. I have referred my clients to CreditFX for the past 5 years. Exceptional customer service and I am often stunned at what they have been able to have removed from people's reports, allowing my clients to qualify. Their charge of $199 is one of life's true bargains. As a Certified Mortgage Planning Specialist, I offer an analysis of your situation today can make suggestions on how small changes in how your consumer and mortgage debt is structured today can have a life changing effect in the years to come. Read more about this free, no obligation service.
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