Financing in Cherryvale>Question Details

Lisa85, Renter in Cherryvale, KS

My Credit is 578 and my annual income is $30000. I was wondering if I would qualify for a home loan?

Asked by Lisa85, Cherryvale, KS Wed Sep 28, 2011

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I agree with Anna's explanation that there is a whole lot more to consider in qualifying someone for a mortgage other than the credit score. Every mortgage has restrictions associated with credit outside of credit scores. The question that needs to be discussed is WHY your credit score is 578. Do you have a past bankruptcy, foreclosure, collections, late payments, etc? If so, when? I am asking these questions not because I expect a response publicly on the site but because I want you to know what a lender should be asking you.

FHA's minimum credit score for their 3.5% down payment program is a 580. You are just slightly below that so it is likely that with a little work you could improve that score to the minimum 580. With that being said each lender has overlays that restrict the mortgage loans they are willing to do even further. Some require a 620 or 640 credit score. Beyond the credit score is also the credit guidelines. Here is an example:

I worked with a customer who had a 710 credit score. At first glance this looks to be a well qualified buyer based on score alone. When I looked further at the credit they had a short sale (pre-foreclosure sale) just less than 2 years ago. This particular customer was looking at a 20% down payment using conventional financing. Conventional guidelines state that with a 20% down payment a customer with a pre-foreclosure sale can purchase again after 2 years since the sale of the home. They were very close to the 2 year mark so we waited for that date and got them approved to purchase.

The key is finding a qualified mortgage lender who understands how to review your situation and find solutions for you (if not immediately at least provide a plan for you).
Web Reference:
1 vote Thank Flag Link Wed Sep 28, 2011
There are other factors besides credit that determine qualification; therefore visit with any loan officer, after reviewing your financial information, income, credit, debt, etc. a determination can be made. If you don't yet qualify, at the very least, you'll know what needs to be done in order to be eligible in the near future; for better rates, consider improving your score...
0 votes Thank Flag Link Wed Sep 28, 2011
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