Credit Score in Detroit>Question Details

Melissa Jack…, Home Buyer in 48227

What is the lowest credit score that is acceptable to purchase a home?

Asked by Melissa Jackson, 48227 Thu Aug 7, 2008

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Answers

7
Technically, you can have no credit score and buy a home. However, a 500 score is probably going to be the lowest allowed score by a lender - for FHA loans. If you need help, you are welcome to call me and go over your credit profile.
Luke Allison
Flagstar Bank
828-777-8828
Luke.Allison@flagstar.com
2 votes Thank Flag Link Thu Aug 7, 2008
Hi, I am interested in talking to you. I thought a 625 wwas the lowest score I had to file A BK11 in 2008 and it will be dismissed in 2014 November
I have no foreclosures what are my chances?
Flag Sun Dec 29, 2013
You will have a very difficult time locating a loan with very bad credit. The best solution is to review your credit report and try to improve the scores to levels of 620 plus. If you have investors or family that can co-invest or loan monies to purchase cash, you can find some great buys in a lot of cities.

Once you get your financing together, you may qualify for Federal Home Administration (FHA), Section 203(k) loans that can incorporate your mortgage and rehabilitation expenses in one loan.

Homebuyers who purchase a property with cash can refinance the property using 203(k) within six (6) months of purchase, the same as if the buyer purchased the property with a 203(k) insured loan to begin with.

So, to take advantage of some of the great mortgage programs, you have to start by improving your credit score.
1 vote Thank Flag Link Wed Mar 27, 2013
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. http://consumer-action.org/

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. http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm


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
0 votes Thank Flag Link Sat Apr 28, 2012
Most of these answers are correct, except that even if you have 30% or more, it is still difficult to get a loan from any lender even if your credit score is above 500, don't let any lending co. talk you into helping you get your credit score up, it's a scam, they will want a large sum of $$, and it's something you can do yourself. good luck!
0 votes Thank Flag Link Sun Sep 14, 2008
Melissa,
I think that Tony makes some great points about working with a quality mortgage planner. If my team was working with you we would first want to know why you want to buy a home and why now? Then we would review your credit to discover why it is so low. At the same time we would review your employment, debts and assets to develop a good understanding of who you are both emotionally and financially. Once we review everything we will then discuss your short terms goals and long term planning strategies and set a plan in place to improve your credit scores preferably in the 720 range with a target date to buy a home. Hopefully this helps and please seek out a local person to work with and don’t make snap decisions through an online broker.
Rgds,
Dave Muti
0 votes Thank Flag Link Wed Sep 10, 2008
Hi Melissa, in today's market your lowest score is going to be 500 to even get concidered a loan. But if you have money there are a lot of investors out there including myself that will get you a home with seller financing with no qualifying from any bank. Not even a credit check. e-mail me at hagopa@comcast.net and I will be happy to answer any questions that you might have.
0 votes Thank Flag Link Wed Sep 10, 2008
Melissa,
When you get below a 620 credit score, it is not so much the score itself that can hurt your chances of getting a mortgage, but rather the REASONS your score is that low. Like Luke said, technically you could get a loan with as low as about a 500 score, however if you have a lot of late payments and collection accounts you will likely be denied. Think about it this way: Why would a bank lend you $100,000 for a house if you can't even pay a cell phone or utility bill?

If you have a low credit score then you have to show some strengths to offset the score, such as a large down payment (30% or more) or a long time on your job combined with a strong pattern of savings.

You should strive to have at least a 720 credit score because that will qualify you for the most programs and the best rates. If you've spoken with a lender already and all they've said is,"your credit score is too low to qualify" then do yourself a favor and talk to a good lender who, even if they can't qualify you, is going to tell you WHY your credit is too low to qualify and who will advise you on what to do to get in shape to buy a home. Feel free to call me and I can take a look at your situation and point you in the right direction.
Tony
734-528-5511
0 votes Thank Flag Link Thu Aug 7, 2008
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