thedaley3, Home Buyer in Sophia, NC

Can I get a mortgage with no down payment and a credit score around 550?

Asked by thedaley3, Sophia, NC Thu Dec 6, 2012

I changed jobs and ended up beingn behind on my credit card payments for 3 months September, October and November 2012. For the past 6 years I have not been late at all. My current status on all my accounts are now current. I am looking into USDA since I live in the country. All the mortgage lenders I have found are 620 and higher. I would like to buy within the next 6 months. Is there anything I can do. Also I do have a great job with great pay. Thanks so much.

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Hello thedaley3,

That is great you have taken steps to repair your credit, you are on the right path, keep it up!. Although you have all accounts current and been paying on time, lenders look at debt to income ratio, in addition, to having at least two to three times the amount of income to the mortgage payment. To ramp up your credit I would like to suggest paying off as much debt as possible, and keep making timely payments.

Word of caution; if you are approved for a loan. Research the lender and make sure the interest rate is within reason and preferably fixed in your situation before signing any document.

Good luck!
0 votes Thank Flag Link Thu Dec 27, 2012
Good morning thedayley3,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services
0 votes Thank Flag Link Thu Dec 27, 2012
It's unlikely that you will be able to qualify for a loan, but you should talk to a loan officer. If you don't know one, I would be happy to recommend a couple of different people to you. A good loan officer will be able to tell you if you qualify for a loan, and if you don't, he or she will be able to guide you to know what you should do to shore your credit up.
Best wishes,
Michael Martinez
(602) 432-0066
0 votes Thank Flag Link Thu Dec 6, 2012
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