Credit Score in San Jose>Question Details

Anxiously Wa…, Home Buyer in San Jose, CA

Is there anywhere to get a loan on a 133k house with 40k down and a 580 credit score? Without paying PMI? Ready to buy ASAP!

Asked by Anxiously Waiting, San Jose, CA Sun Apr 3, 2011

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Jessica Bateman’s answer
I work with a lot of people who have less than perfect credit. I tell all my clients that need a pre approval to visit The Lenders Network, I have seen loan approvals from them even with scores under a 600. So if anyone can get you a loan they can.

Good luck to you!
1 vote Thank Flag Link Wed Jul 31, 2013
If I were you, I would apply for a FHA Loan. Since your putting down such a large down payment (more than 10%) I would do a 15 year loan. FHA will only charge 1% upfront Mortgage Insurance Premium ($930.00) but you will have NO monthly Mortgage Insurance. We go down to 560 on our FHAs, so don't be too concerned. The average FHA buyer puts only 3.5% down, so at 30% a lender's level of risk is really low. As far as interest rates go, there's a little hit to the rate with those credit scores, but even somewhere in the high 4's would be a good low payment for you and better yet you will payoff your home in half the time. Believe me, that's your best move! Let me know if you have any questions.

Best of Luck!
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1 vote Thank Flag Link Tue Apr 5, 2011
Greetings Anxiously!

If you are purchasing in our area, our in house lenders have a program to review your credit score. It's possible they may be able assist you in bringing that number up relatively easy.

Don't give up yet.
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1 vote Thank Flag Link Tue Apr 5, 2011
The "without paying PMI" is the tough part.
I assume you are saying this because as pointed out already, your down payment is fine to avoid PMI, but Fannie Mae has a minimum credit score so you will not be eligible for conventional financing with that score. This means that FHA would be your only option and with FHA you will pay mortgage insurance regardless of your down payment.

Either consider paying the MIP (as it's called with FHA) or work on a plan to raise your scores. If you need assistance with either, feel free to contact me.
Web Reference: http://TripointMortgage.Net
1 vote Thank Flag Link Mon Apr 4, 2011
I agree with my colleagues, your down payment is fine it's your credit that may hold you back. Wells Fargo recently lowered their scoring models and may worth a shot for a conventional loan.
Your other options would be to do some credit repair, there are options which can go fairly quickly through legitimate sources or find a hard money lender.
Hard money loans are more expensive, higher rates and generally for short terms, a few months to a couple years. Only consider this source if you fully examine all the costs and can be certain you can get conventional financing soon and are getting an exceptional deal on the house.
1 vote Thank Flag Link Sun Apr 3, 2011
Thank you all for your help. I took some of the advice and went to Wells Fargo. I am on my way to getting my pre-approval to submit my offer. Thanks again!!
0 votes Thank Flag Link Tue Apr 5, 2011
Hi Anxiously waiting!

40K down on a 133K house is more than 20 percent down so you should have no problem avoiding the PMI problem. Contact a local lender for lending options with a 580 credit score. Trulia has many loan professionals that I'm sure are willing to help!

Good Luck!
Chris Blasic
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0 votes Thank Flag Link Sun Apr 3, 2011
If you're putting 40K down on a 133k house PMI should be simple to avoid, but getting approval entails more than just the credit score. You'll need to contact a lender, and they are going to factor in debt to income, job history, etc. If you don't qualify yet at least they can let you know what needs to be done in order to get there. Best Wishes, Kevin
0 votes Thank Flag Link Sun Apr 3, 2011
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