Lenders are very careful in approving loans to borrowers. They review a borrower’s ability to pay and financial responsibility by looking at their credit history, credit score, employment, and debt-to-income ratio. Borrowers who have had some financial issues in the past from unpaid debts or bankruptcies often have difficulties securing a mortgage or finding favorable terms even if they are currently financially secure and capable.
Since FHA loans* are federally insured, such borrowers will have a much easier time being approved. Younger borrowers who may have secure employment but lack a substantial credit history can take advantage of FHA loans*. An FHA loan* can also be a good option for borrowers who don’t have the funds for a large down payment.